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HomeMy WebLinkAboutAgenda Statement 1987/06/16 Item 22 COUNCIL AGENDA STATEMENT Item 2.2 Meeting Date 6/16/87 ITEM TITLE: Public hearing on proposed increase in the sewer service charge Ordinance 2212 To the Chula Vista Municipal Code to establish the Sewerage Replacement Fee fund SECOND READING AN PTION Resolution Modifying the Master Fee relative to sewer service charge ' SUBMITTED BY: Director of Public Works/City Engineer REVIEWED BY: City Manager{ 1 (4/5ths Vote: Yes No X ) On March 24, 1987, Council received a report proposing the establishment of a Sewerage Facility Replacement Fee. Council , on that date, deferred action on the matter until staff presented Council with a recommendation on the anticipated sewer service charge increase. A proposal to increase the sewer service charge is before Council tonight. The proposed increase includes the previously recommended replacement fee. placement/refurbishment of the existing sewerage system, which is the ,.durpose of the replacement fee, is in fact a part of the cost of providing sewer service. Therefore, it is considered appropriate to include it as part of the sewer service charge which is collected through the water companies. However, the amount collected for sewer replacement will be designated by ordinance and placed in a separate revenue fund. RECOMMENDATION: That Council : 1 . Place the ordinance on the first reading. 2. Adopt a resolution amending Resolution No. 10495 to modify the Master Fee Schedule to increase the monthly sewer service charge from $5.40/EDU to $8.70/EDU for single-family dwellings and from $0.43/100 cu. ft. of water consumption to $0.70/100 cu. ft. of water consumption for multi-family dwellings and commercial/industrial properties. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Sewer Service Charge A status report of the "City" Sewer Service Charge Fund submitted by staff to the City Manager on April 3, 1987, indicates an increase in the current sewer ,ervice charge is required to cover projected expenditures for FY 1987-88. Page 2, Item 2 Meeting Date 6)11/87 Revenue from the monthly sewer service charges is deposited into the sewer revenue fund. This fund was established to: 1 ) pay for Metro System annual maintenance and operation (M&0) charges, 2) pay for Metro System annual charges for reserve capacity rights, and 3) pay for City staff costs for maintenance and operation of the City sewer system. A recent analysis of the status of the fund indicates a projected deficit by the end of the 1987-88 fiscal year. To offset this deficit, an increase in the current monthly sewer service charge is proposed. This proposed increase would also be sufficient to generate enough reserve funds to cover cash flow requirements during the lapse time between collection of fees and the payment of Metro charges and unforeseen expenses. Justification for the increase is set forth in the sewer service status report forwarded by staff to the City Manager. A copy of the report is attached. The Master Fee Schedule as amended by Resolution No. 10495 on June 24, 1981 , established the monthly sewer service charge for single-family dwellings at $5.40. The sewer service charge per month for multi-family dwellings and commercial /industrial properties was set at $0.43/100 cu. ft. not to be less than $5.40 per month. This proposal would increase the single-family rate by $2.60. A similar increase would be applied to the multi-family and commercial/industrial rates. These rates would be increased $0.21/hundred cu. ft. to $0.64/hundred cu. ft. of water consumption. ,notice of a public hearing on the proposed increase in sewer service charge has been published in the May 28, 1987, edition of the "Star News" and a copy of the analysis of the sewer service fund made available for public review at the City Engineer's office. Sewer Replacement The existing sewerage system in the City of Chula Vista is increasing in age and will subsequently require refurbishment and/or replacement. Revenue generated by the proposed Sewerage Replacement Fee will permit facility replacement prior to failure rather than in reaction to a failure within the system. It is estimated that $6,644,000 or $273,000/year will be required to meet the refurbishment/replacement needs of the City through the year 2011 . A monthly fee of $.70 per dwelling unit will generate the required amount. A detailed justification of and the basis for the proposed $.70 per dwelling unit per month and $.06/100 cubic foot of water consumption for commercial/industrial sewer connections are set forth in the attached "Report Concerning a Sewerage Facility Replacement Fee. " Authorization to establish the replacement fee, which is legally classified as a capacity fee, is contained in Section 54991 of the Government Code. Notice of a public hearing and availability of data as to how the fee was determined was published in the May 28, 1987, issue of the "Star News. " Page 3, Item 22 Meeting Date 6/16/87 Any change in the Sewer Service Charge and addition of a Sewerage Facility Replacement Fee necessitates considerable work with the water-serving agencies to actually implement the change through their billing procedures. Because of the time and the cost involved in making changes, it is advantageous to minimize the number of changes to be made. The proposed Sewerage Facility Replacement Fee will be collected with the Sewer Service Charge. Its implementation will involve the same process and cost as will a change in the Sewer Service Charge. Staff has met with the Sweetwater Authority staff and contacted the Otay Municipal Water District requesting that the increase to the sewer service charge and addition of a sewerage facilities replacement fee become effective on the first billing cycle after July 1 , 1987. The water district's staff has submitted the City's request to their respective Board of Directors. A response regarding the implementation schedule and any additional charges is anticipated by June 12, 1987. The implementation of the Sewerage Replacement Fee and increase in the Sewer Service Charge may necessitate a re-negotiation of the City's agreements with Sweetwater Authority and the Otay Water District. It most probably will also require an increase in the collection fee charged to the City by these agencies and payment of computer reprogramming costs. . ISCAL IMPACT: The $2.60/EDU increase in monthly sewer service charges will generate approximately $1 ,000,000 needed to offset a projected deficit in sewer funds for FY 1987-88 and establish a reserve of 20% of the FY 87-88 sewer budget. The proposed Sewerage Facility Replacement Fee is anticipated to generate initial income of approximately $273,000 per year. Payment of increased collection fee and computer reprogramming costs to the water companies may be required. WPC 2859E /ACit ' by the City byte City Council of Chula Vista,Connor is of Chula Vista, California California d / 1 / i Dated 1A42