HomeMy WebLinkAboutAgenda Packet 2005/05/17
I declare under oenaltv of oeriurv that I am
Office ~f th~ City CI~rk and that' posted this
document on the bulletin board according to
Brown ~ requirements. ¡Jj d,
Dated 'it 34 5 Signed,)'1p~J4¡, ~
CITY COUNCIL AGENDA
May 17,2005 6:00 p.m.
Council Chambers
Public Services Building
276 Fourth Avenue, Chula Vista
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CllY OF
CHUlA VISTA
City Council
Patty Davis
John McCann
Jerry R. Rindone
Steve Castaneda
Stephen C. Padilla, Mayor
City Manager
David D. Rowlands, Jr.
City Attorney
Ann Moore
City Clerk
Susan Bigelow
**********
The City Council meets regularly on the first calendar Tuesday at 4:00 p.m.
and on the second, third and fourth calendar Tuesdays at 6:00 p.m.
Regular meetings may be viewed at 7:00 p.m. on Wednesdays on
Cox Cable Channel 24 or Chula Vista Cable Channel 68.
Agendas are available on the City's website at:
www.chulavistaca.gov
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AGENDA
May 17, 2005
6:00 P.M.
CALL TO ORDER
ROLL CALL: Councilmembers Castaneda, Davis, McCann, Rindone, and Mayor Padilla
PLEDGE OF ALLEGIANCE TO THE FLAG, MOMENT OF SILENCE
SPECIAL ORDERS OF THE DAY
· PRESENTATION BY MAYOR PADILLA OF A PROCLAMATION TO PUBLIC
WORKS DIRECTOR, DAVE BYERS, PROCLAIMING THE WEEK OF MAY 15
THROUGH MAY 21, 2005 AS NATIONAL PUBLIC WORKS WEEK
· INTRODUCTION BY POLICE CHIEF EMERSON OF RECENTLY HIRED
LATERAL POLICE OFFICER, NATHAN WALKER
· PRESENTATION BY JAMES SANDOVAL, DIRECTOR OF PLANNING AND
BUILDING, REGARDING THE CODE ENFORCEMENT PROGRAM
CONSENT CALENDAR
(Items 1 through 4)
The Council will enact the Consent Calendar staff recommendations by one
motion, without discussion, unless a Councilmember, a member of the public, or
City staff requests that an item be removed for discussion. If you wish to speak on
one of these items, please fill out a "Request to Speak" form (available in the
lobby) and submit it to the City Clerk prior to the meeting. Items pulled from the
Consent Calendar will be discussed after Action Items.
1. WRITTEN COMMUNICATIONS
A. Letter of resignation from William Tripp, member of the Growth Management
Oversight Commission.
Staff recommendation: Council accept the resignation and direct the City Clerk to
post the vacancy in accordance with Maddy Act requirements.
B. Letter from Ms. Dinah Goodspeed appealing false alarm fees totaling $350.00.
Staff recommendation: Since false alarms are not excusable under the Chula
Vista Security Alarm Ordinance, it is recommended that Finance staff work with
Ms. Goodspeed to establish a suitable payment plan.
Page 1 - Council Agenda
May 17, 2005
2. ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING AN INCREASE OF THE SEWERAGE CAPACITY CHARGE AND
THE MODIFICATION OF THE MASTER FEE SCHEDULE (SECOND READING)
The City of San Diego, as part of the Metropolitan Wastewater District (Metro), provides
sewage treatment services to 14 participating agencies that do not own and operate a
sewage treatment facility. The City of Chula Vista, along with the other participating
agencies, sends sewage generated to San Diego's Point Lorna Wastewater Treatment
Plant for treatment. In 1985, Chula Vista established the sewerage capacity charge to
fund the planning, design and construction of wastewater collection or treatment facilities
needed to facilitate the development of the City. It was also intended to fund either the
construction of treatment facilities or the purchase of additional treatment capacity rights
in the Metro sewer system. Since then, the City has made several adjustments to the
sewerage capacity charge; however, another increase is needed to ensure that there is
adequate revenue necessary to fund the acquisition of additional sewage treatment
capacity rights. Adoption of the ordinance increases the current sewer capacity charge
ITom $3,000 to $3,478 to ensure that there is adequate capacity in the system. This
ordinance was introduced May 10, 2005. (City Engineer)
Staff recommendation: Council adopt the ordinance.
3 A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE CHULA VISTA TRACT NO. 92-02A, ROLLING HILLS RANCH,
SUB-AREA III, NEIGHBORHOOD lOA FINAL MAP; ACCEPTING ON BEHALF OF
THE CITY THE VARIOUS PUBLIC EASEMENTS, ALL AS GRANTED ON SAID
MAP WITHIN SAID SUBDIVISION; APPROVING THE SUBDIVISION
IMPROVEMENT AGREEMENT FOR THE COMPLETION OF IMPROVEMENTS
REQUIRED BY SAID SUBDIVISION; APPROVING THE ASSOCIATED
SUPPLEMENTAL SUBDIVISION IMPROVEMENT AGREEMENT; AND
AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENTS
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING A GRANT OF EASEMENTS, LICENSE AND MAINTENANCE
AGREEMENT BETWEEN MCMMILLIN ROLLING HILLS RANCH, LLC, AND
THE CITY OF CHULA VISTA FOR THE MAINTENANCE OF PUBLIC
RIGHT-OF-WAY WITHIN ROLLING HILLS RANCH SUB-AREA III,
NEIGHBORHOOD lOA, AND AUTHORIZING THE MAYOR TO EXECUTE SAID
AGREEMENT
On October 6, 1992, Council approved a tentative subdivision map for Salt Creek Ranch,
Chula Vista Tract No. 92-02. On May 13, 2003, Council approved an amending tentative
subdivision map for Rolling Hills Ranch (fonnerly known as Salt Creek Ranch) Sub-area
III, Chula Vista Tract No. 92-02A, in which Neighborhoods 9 through 12 of the original
tentative subdivision map were redesigned. Adoption of the resolutions approves the
Neighborhood lOA final map, its associated subdivision and supplemental subdivision
improvement agreements, and a grant of easements and maintenance agreement for
privately maintained public property. (City Engineer)
Staff recommendation: Council adopt the resolutions.
Page 2 - Council Agenda
May 17, 2005
4. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE FIRST AMENDMENT TO THE AGREEMENT WITH
ERICKSON-HALL CONSTRUCTION CO. TO INCORPORATE THE GUARANTEED
MAXIMUM PRICE (GMP) FOR THE DESIGN AND CONSTRUCTION OF
HARBORSIDE PARK (CIP PR249), LOCATED ON OXFORD STREET IN
WESTERN CHULA VISTA; AUTHORIZING THE MAYOR TO EXECUTE SAID
AMENDMENT; AND AUTHORIZING THE TRANSFER OF FUNDS FROM THE
"WESTERN CHULA VISTA INFRASTRUCTURE PROGRAM (GG188)" TO
"HARBORSIDE PARK (PR249)", AS NECESSARY TO COMPLETE THE PROJECT
(4/5THS VOTE REQUIRED)
The City Council previously approved capital improvement program project No. PR249
and the Master Plan for Harborside Park, which conceptually designed and provided for
the construction of a completed and fully functional park. Council approved a design
build agreement with Erickson-Hall Construction Co. for this park. The design build
agreement contained a not-to-exceed price of $1,554,224 with the guaranteed maximum
price to be set upon receipt of ninety percent of the construction drawings. The project is
nearing the end of the design phase and ready to start the construction phase this month.
Adoption of the resolution approves the first amendment, setting the guaranteed
maximum price at $1,987,030. (Director of General Services)
Staff recommendation: Council adopt the resolution.
ORAL COMMUNICATIONS
Persons speaking during Oral Communications may address the Council on any
subject matter within the Council's jurisdiction that is not listed as an item on the
agenda. State law generally prohibits the Council from taking action on any issue
not included on the agenda, but, if appropriate, the Council may schedule the
topic for júture discussion or refer the matter to staff. Comments are limited to
three minutes.
ACTION ITEMS
The items listed in this section of the agenda will be considered individually by
the Council, and are expected to elicit discussion and deliberation. If you wish to
speak on any item, please fill out a "Request to Speak" form (available in the
lobby) and submit it to the City Clerk prior to the meeting.
5. CONSIDERATION OF ADOPTION OF A RESOLUTION DECLARING THE CITY'S
INTENTION TO INCREASE SEWER SERVICE CHARGES AND SETTING A
PUBLIC HEARING TO CONSIDER SAID INCREASE
All users who are connected to the City's wastewater collection system pay the sewer
service charge. Revenues derived ITom this fee are used to fund the cost of wastewater
treatment, system maintenance and operation. Based on the findings of a rate study, it
was detennined that the existing rates would not generate the revenues needed to meet
the obligations of the fund over the long tenn, therefore, the rates need to be adjusted,
and in some cases, increased. (City Engineer)
Staffrecommendation: Council adopt the following resolution:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
DECLARING THE CITY'S INTENTION TO INCREASE SEWER SERVICE
CHARGES AND SETTING A PUBLIC HEARING TO CONSIDER SAID
INCREASE FOR JULY 12,2005 AT 6:00 P.M.
Page 3 - Council Agenda
May 17, 2005
ITEMS PULLED FROM THE CONSENT CALENDAR
OTHER BUSINESS
6. CITY MANAGER'S REPORTS
7. MAYOR'S REPORTS
8. COUNCIL COMMENTS
· Councilmember Rindone: Discussion of problems with alcohol consumption in
Friendship Park and proposal to designate Friendship Park as alcohol-free.
CLOSED SESSION
Announcements of actions taken in Closed Session shall be made available by
noon on Wednesday following the Council Meeting at the City Attorney's office in
accordance with the Ralph M. Brown Act (Government Code 54957.7).
9. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT
CODE 54957.6
· Agency designated representatives: Sharon Marshall, Marcia Raskin, David D.
Rowlands, Jr., Maria Kachadoorian, Ed Van Eenoo
· Employee organizations: Police Officers Association, Chula Vista Employees
Association, International Association of Fire Fighters, Western Council of
Engineers
10. CONFERENCE WITH LEGAL COUNSEL REGARDING ANTICIPATED
LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9
· One case
ADJOURNMENT to the Regular Meeting of May 24, 2005, at 6:00 p.m. in the Council
Chambers.
Page 4 - Council Agenda May 17, 2005
RECEIVED
'Il) MAY -9 P 2 :55
CITY OF CHULA VIS í;.
CITY CLERK'S OFf=¡CF
May 9, 2005
Susan Bigelow, City Clerk
City ofChula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Dear Ms. Bigelow:
Subject: Resignation - Growth Management Oversight Commission
Due to my recent appointment as a member of the City of Chula Vista Planning Commission
please accept this letter as my resignation, effective immediately. I have enjoyed my role as a
Commissioner with the GMOC and look forward to continuing as a citizen volunteer in our
community.
If you should have any questions, please contact me at (619) 446-5273.
1ft
CI1Y OF
(HUlA VISfA
May 10, 2005
TO:
FROM:
The Honorable Mayor a~.pty Council
David D. Rowlands, Jr.~y Manager
SUBJECT: City Council Meeting of May 17, 2005
This will transmit the agenda and related materials for the regular City Council meeting
of Tuesday, May 17, 2005. Comments regarding the Written Communications are as
follows:
1 B. This is a letter from Ms. Dinah Goodspeed requesting a waiver of false alarm fees
totaling $350.00. False alarms are not excusable under the Chula Vista Security
Alarm Ordinance. THEREFORE, IT IS RECOMMENDED THAT FINANCE STAFF
WORK WITH MS. GOODSPEED TO ESTABLISH A SUITABLE PAYMENT PLAN.
113-/
MEMORANDUM
May 10, 2005
TO:
FROM:
Honorable Mayor and Council
Gary Wedge, Captain - Ad~strative Services ~
David D. Rowlands, Jr., C(yManager
VIA:
SUBJECT:
Response to Complaint of False Alarm Fee Assessments by Dinah Goodspeed
BACKGROUND
Ms. Dinah Goodspeed of 2570 Saddle back St, incurred nine false alarms at her residence over
the last 11 months. The table below details the date, times, locations of the false alarms and
penalty fees:
DATE AND TIME OF FALSE LOCATION OF SENSOR ACTIVATED PENALTY FEE
ALARM
June 4, 2004 4:03 AM Unknown $0
July 29, 2004 4:09 PM Panic/Duress Alarm $0
October 14, 2004 2:38 PM Front Door, side door, garage $25.00 (Paid)
Jan 24, 2005 6:06 AM Family Room and Kitchen motion $50.00 (In Dispute)
Mar 25, 2005 5:04 PM Dininn Room and Kitchen motion $50.00 (In Dispute)
Mar 26, 2005 8:41 AM DininaRoom and Kitchen motion $50.00 !In Disnute\
Mar 26, 2005 10:54 AM Dinina Room and Kitchen motion $100.00 (In Dispute)
Mar 26, 2005 5:06 PM Dinino Room and Kitchen motion $100.00 (In Dispute)
Aoril 15, 2005 7:20 PM Front door $100.00 (not vet billed)
Ms. Goodspeed submitted letters to the City of Chula Vista Finance Department dated March 5
and April 18, 2005, disputing the false alarm fees for which she was billed in relation to the false
alarms of January 24th, March 25th and March 26th, 2005. These letters were forwarded to the
Police Department Alarm Program for review.
Ms. Sandy Tucci, Police Data Specialist, followed up with Ms. Goodspeed and left a message
on her phone on April 25, 2005, informing her that the false alarms and associated penalty fees
would not be dismissed. Ms. Tucci then sent a follow up letter indicating this same information
to Ms. Goodspeed dated April 25, 2005.
On April 29, 2005, Ms. Goodspeed contacted Ms. Tucci and requested to speak with a
manager. Ms. Barbara Brookover, the Police Support Services Manager who supervises the
Alarm Program, spoke with Ms. Goodspeed and confirmed that because her alarms were false
and did not meet the criteria as set forth in the municipal code (Section 9.06.030), the false
alarms activations and associated penalty fees would not be dismissed. Ms. Goodspeed then
sent a letter to the City Clerk dated April 30, 2005, requesting an appeal before the City Council.
/ß-¿;L
Ms. GOODSPEED'S APPEAL
Following is a summary of the issues presented by Ms. Goodspeed in her Appeal to the City
Council of false alarm fees of $350.00, and the Police Department's justification for not
dismissing the false alarm activations and associated fees.
Ms. Goodspeed is appealing the following false alarm activations:
DATE AND TIME OF FALSE LOCATION OF SENSOR ACTIVATED per PENALTY FEE
ALARM ALARM COMPANY
Jan 24, 2005 6:06 AM Family Room and Kitchen motion $50.00
Mar 25, 2005 5:04 PM Dinino Room and Kitchen motion $50.00
Mar 26, 2005 8:41AM Dinino Room and Kitchen motion $50.00
Mar 26, 2005 10:54 AM Dinino Room and Kitchen motion $100.00
Mar 26, 2005 5:06 PM Dinino Room and Kitchen motion $100.00
Ms. Goodspeed stated that she was out of town on January 24 and April 12, 2005. Although
she apparently was out of town on the first false alarm activation on January 24, 2005, she
confused the date of the penalty memo of April 12, 2005 as the date of her subsequent false
alarms. In either case, whether or not she was out of town is not relevant to her alarm system
activating.
Ms. Goodspeed states that "any alarm activation would have been triggered by an intruder,
vandal, mischief maker, or other unauthorized person attempting to gain entry to my house."
Information received from Ms. Goodspeed's alarm company specifies that interior sensors were
activated, not perimeter sensors. This information is passed from the alarm company to
dispatchers so that officers have an idea where a potential suspect may have gained entry into
a building.
Ms. Tucci and Ms. Brookover both explained to Ms. Goodspeed that each false alarm was in the
same interior zone: dining room/family room and kitchen. Perimeter sensors (doors, windows,
garage doors) are indicators of attempted entry from the outside. Interior sensors are indicators
of movement within the residence. It is not possible for an intruder to enter a residence without
activating perimeter alarm sensors and then activate an interior sensor, especially when
responding peace officers find no evidence of illegal entry.
As a result of the frequency of the false alarms over the last 11 months, and the consistent
location of the alarms in dispute, the Police Department is denying Ms. Goodspeed's request for
dismissal of the false alarms.
She has since brought forward an appeal to dismiss the false alarm penalties to the City
Council. According to the Chula Vista Security Alarm Ordinance (Municipal Code Section
9.06.030 (B)):
"False alarm" means the activation of an alarm system through mechanical
failure, accident, misoperation, malfunction, misuse or the negligence of either
the owner or lessee of the alarm system or the alarm system or any of their
employees or agents. False alarms shall not include alarms caused by acts of
god, the malfunction of telephone lines, circuits or other causes which are
beyond the control of the owner or lessee of the alarm system.
/6-3
There was no evidence of a crime or an attempted crime, or any other reason mentioned in the
ordinance, which may have resulted in any of the false alarm activations that Ms. Goodspeed
brought forward for dismissal and appeal.
Based on the information Ms. Goodspeed has provided, and information from her alarm
company on the location of the alarm sensor activations, her false alarms are not excusable
under the Chula Vista Security Alarm Ordinance.
Ms. Goodspeed states the assessment of the false alarm fees would create a financial hardship
for her. The City of Chula Vista Finance Department has stated that they would be willing to
work with her to establish a payment plan. Police Department staff also spoke with Ms.
Goodspeed and informed her that she should contact her alarm company to fix the interior
alarms.
/ø~Lf
Dinah Goodspeed
RECË/VED
ï:5 HAY -4 p 2 :52
CITY OF C
CITY CLERH~LA YiSTi~
K S 01 I fCI
April 30, 2005
City of Chula Vista
City Clerk
276 4th Ave
Chula Vista, Ca 91910
619-691-5250
Subject: Appeal to the City Council of false alarm fees of$350.00
Ref: Invoice ARl15595
Invoice ARl15952
City Clerk,
By the City ofChula Vista invoice ARll15952 of 04/12/2005, I was assessed fees
totaling $300.00 for four alarm activations on 04/12/05 and another $50.00 fee was
assessed for alarm activation under invoice ARl15595. I disputed these charges with the
Police Department and my request to dismiss these charges has been denied by letter of
April 25, 2005. Please schedule an appeal before the City Council in accordance with
CVMC 9.06.160
Appeal to City Council by testimonial
I live alone and was visiting family in Phoenix on 04/12/2005, the date the alarm
triggered 4 times ($300.00) and I was traveling on business in Maryland on the prior
occasion where I was assessed the other $50.00. Accordingly, any alarm activation
would have been triggered by an intruder, vandal, mischief maker, or other unauthorized
person attempting to gain entry to my house. The alarm probably scared them away. I
called the Chula Vista police and advised them I was out of town. Since many alarms do
not reset automatically, an intruder may return to the scene after triggering the alarm the
first time.
The assumption by the police is that they responded to a false alarm but I do not
subscribe to that theory. Even a fast response to an alarm is unlikely to result in the
apprehension of a suspect unless it is a silent alarm, which mine is not.
I have been a member of the Chula Vista communi.ty since 1998 and I have never had 'an
instance where the alarm activated itself or any indication that the alarm is
malfunctioning while I was in my home. It only activates when I am away.
/6~S
I am a single woman who works hard for her money and I feel this is a very unjust
assessment. This assessment would also create a fInancial hardship on me.
Based on the infonnation I have provided, please dismiss the $350.00 in false alarm fees.
Thank you.
Sincerely,
#~pr~
Dinah Goodspeed
Co fn'e5 -Iv:
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CITY OF
CHULA VISTA
Police Department
April 25, 2005
Dinah Goodspeed
Subject: Request for dismissal offalse alarm charges .
I have received your request for dismissal of your false.. alarm charges. Unfortunately,
based upon the reasons provided, your false alarms are not excusable under the current,
City ofChula Vista Security Alarm Ordinance 9.06 CVMC
I am returning your invoices for payment due. Please remit payment to the City of Chula
Vista Finance Department for your excessive false alann activations.
Please feel ITee to contact us at (619) 585-5719 if you have any further questions or
concerns.
Thank you,
Alarm Program
16-7
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INVOICE
Customer Number: C004777
0lY OF
CHULA VISTA
Invoice Number: ARl15952
Invoice Date: 04/12/05
Due Date: 05/12/05
Total Amount Due:
300.00
To: DINAH GOODSPEED
Transaction Date Quantity Description Amount
._~~-----
04/12/05 1 #5 ON 03/25/05 @ 1704 ID09667 50.00
04/12/05 1 #6 ON 03/26/05 @ 0841 ID09667 50.00
04/12/05 1 #7 ON 03/26/05 @ 1054 ID09667 100.00
04/12/05 1 #8 ON 03/26/05 @ 1706 ID09667 100.00
TOTAL DUE
THIS BILL IS FOR EXCESSIVE FALSE ALARM ACTIVATIONS.
PER CVMC 9.06.130 EACH FALSE ALARM IN EXCESS OF TWO
WITHIN A 12 MONTH PERIOD IS ASSESSED A PENALTY OF $25
FOR THE 3RD ONE, $50 EACH FOR THE 4TH, 5TH, AND 6TH,
AND $100 FOR EACH THEREAFTER. A PENALTY OF 15% WILL BE
C~~GED ON ALL LATE PAYMENTS.
300.00
UNLESS OTHERWISE SPECIFIED, ALL INVOICES THAT REMAIN UNPAID BY THE DUE DATE ARE SUBJECT TO A PENALTY OF 100/0. (FALSE ALARM ACTIVATIONS
ARE SUBJECT TO A 15% PENALTY) A FINANCE CHARGE OF 1.5% WILL ALSO BE APPLIED MONTHLY TO ANY DELlQUENT ORIGINAL INVOICE BALANCE.
IF YOU HAVE ANY QUESTIONS REGARDING THIS INVOICE, PLEASE CALL (619) 691-5250.
PLEASE RETURN THIS PORTION WITH YOUR PAYMENT
Please mail payment to:
CITY OF CHULA VISTA
Payment Processing Center
P.O. Box 7549
Chula Vista, CA 91912-7549
Customer Number C004777
Invoice Number ARl15952
Invoice Date 04/12/05
Due Date 05/12/05
Total Amount Due $ 3 0 0 . 0 0
Or pay in person at
CITY OF CHULA VISTA
Finance Department
276 4th Ave.
Chula Vista, CA 91910
Monday through Friday 8:00 am to 5:00 pm
I B·- g Total Payment $
·
~f~
~-:
~--.:
r STATEMENT l
CITY OF
CHULA VISTA
STATEMENT OF ACCOUNT
DATE:04/06/05
CUSTOMER:C004777
GOODS?RRD, DINAH
PAST DUE
INVOICE
NUMBER
INVOICE
DATE
INVOICE
AMOUNT
TOTAL
PAYMENTS
BALANCE
DUE
AR1l5595
02/24/05
57.50
0.00
57.50
UNLESS OTHERWISE SPECIFIED, ALL INVOICES THAT REMAIN UNPAID BY THE DUE DATE ARE SUBJECT TO A PENALTY OF 10%. (FALSE
ALARM ACTIVATIONS ARE SUBJECT TO A 15% PENALTY) A FINANCE CHARGE OF 1.5% WILL ALSO BE APPLIED MONTHLY TO ANY
DELINQUENT ORIGINAL INVOICE BALANCE. IF YOU HAVE ANY QUESTIONS REGARDING THIS INVOICE, PLEASE CALL (519) 691-5250.
-----------------------------------------------------------------------------------------
Please mail payment to:
CITY OF CHULA VISTA
Payment Processing Center
P.O. Box 7549
Chula Vista, CA 91912-7549
Or pay in person at
CITY OF CHULA VISTA
Finance Department
276 4TH Avenue
Chula Vista, CA 91910
Monday through Friday 8:00 am to 5:00 pm
PLEASE WRITE YOUR CUSTOMER NUMBER ON YOUR
CHECK AND RETURN THIS PORT/ON WITH YOUR PA YMENT
Amount Due $
57.50
/13·-9
. DRAFT
ORDINANCE NO.
~O~
ORDINANCE OF THE CITY CQ~~~CITY OF
CHULA VISTA APP~ \~J""íNCREASE OF THE
SEWERAGE CAPA~'- CHARGE AND THE
MODIFICATION OF THE MASTER FEE SCHEDULE
WHEREAS, in March of 1985, the Engineering Department prepared a study titled
"Sewerage Facility Participation Fee Study-Modified March 1985", The purpose of this study
was to investigate the feasibility of establishing a c8:pacity fee that would be applicable to all new
sewer connections to the City's sewer collection system; and
WHEREAS, upon completion, this stlldy recommended among other tbiJJ.gs, the
establishment of a Sewerage Capacity ChJIrge that would be adjusted on an aIJIlual basis to
reflect changes in construction costs (sugges1ed basis: Engineering News Record Construction
Index most applicable to July 1 of each year); and
WHEREAS, on April 2, 1985, City Council "by Ordinance 2107, approved the
establishment of the Sewerage Facility Participation Fee, now referred to as the Sewerage
Capacity Charge, to enable the citizenry to be repaid for their initial investment and to facilitate
the development of Chula Vista. At that time, the fee was set to be $300 per Equivalent
Dwelling Unit (EDU); and
WHEREAS, the City of Chula Vista along with fourteen other agencies that belong to the
Metro System sends its flow to the City of San Diego's Point Loma Wastewater Treatment Plant
for handling of the sewage; and
WHEREAS, in anticipation of the signiiicant costs of upgrading the Point Loma
Wastewater Treatment Plant to a secondary trea.tJ:p.ent facility, for which the City of Chula Vista
as well as other participating agencies was liable, Council on May 5, 1987, approved Resolution
No. 13004 and Ordinance No. 2002 increasing the Sewerage Capacity Charge ftom $300 to
$600; and
WHEREAS, in 1989 following the adoption of the Clean Water Act, the Environmental
Protection Agency (EPA) directed the City of San Diego to upgrade the plant to a Secondary
Treatment facility. Since Federal funds were not anticipated to be available for the required
upgrades at that time and the cost of bringing the plant into compliance seemed to be far greater
than what was originally anticipated in 1987, Council on October 17, 1989 approved Resolution
Nos. 15352 and 1 5352A. These resolutions :increased the Sewerage Capacity Charge to $2,000,
pending the completion of various studies being conducted at tha.t time to determine the impact
of upgrading the treatment plant; and
WHEREAS, in October 9, 1990, Council by Resolution 15894 further increased the
Sewer Participation Fee to $2,220 to enable the City meet its obligation to the Metro System for
the upgrade of the treatment plant; and
WHEREAS, in March 18, 2003, City Council by Ordinance 2900 further increased the
Sewer Participation Fee to $3,000 to enable the City acquire additional capacity rights in the
Metro System and cover the costs associated with the significant incremen\ in Metro
expenditures and improvements required to adequately service the City's growth; and
2-1
Ordinance ------
Page 2
DRAFT
WHEREAS, Chula Vista currently has capacity rights in the Metro Sewer System to
cover growth for the next few years. This capacity was acquired with funds generated by the
Sewerage Capacity Charge that existing residents paid when they made their connection to the
City's sewer system. If reserved capacity in the Metro Sewer System had not been purchased,
new residents would either have not been permitted to build, or would have been required to pay
for the acquisition of additional treatment capacity. Instead., new residents are permitted to make
use of the reserved capacity held by the City; and
WHEREAS, the increase in the Sewerage CaPacity Charge, applicable to all new sewer
connections, is proposed as a mean of recuperating the cost ofreserve capacity and also maintain
a fund that will fund the acquisition of additional capacity and subsidize the cost of the necessary
sewer improvèments that will benefit all City residents; and
WHEREAS, the City recently completed the Wastewater Master Plan Update with the
primary goal of evaluating the adequacy of the existing wastewater collection system to sustain
the long-te= growth of the City. The plan will also assist the City in: budgeting for Capital
Improvement Projects (CIP), allocating resources for the acquisition of additional sewage
capacity and determirring the short and long-tenn sewer capacity needs of the City. In the study,
the consultant is advising the City to implement the "Buy-In" method, which is to adjust the
Sewerage Capacity Charge by dividing the total value of the regional wastewater system by the
total wastewater flow. This increase will be needed to keep up with in£la,tion while the
consultant makes its final recommendation; and
WHEREAS, utilizing the "Buy-In" method as the basis of the increase, the Sewerage
Capacity Charge will be increased from $3,000 per Equivalent Dwelling Unit to $3,478 per
Equivalent Dwelling Unit; and
WHEREAS, the. City Council has determined that the amount of the fee levied by this
ordinance does not exceed the estimated cost of providing the public facilities.
NOW, THEREFORE, the City Council of the CÏty of Chula Vista does ordain as follows:
SECTION I: That the Chapter XII Engineering - Sewer, Section 3(80) of part A of the Master
Fee Schedule be, and the same is hereby amended to read as follows:
"3. Sewerage Capacity Charge
a. The owner or person making application for a permit to develop or modify
. use of any residential, commercial, industrial or other property which is projected
by the City Engineer to increase the volumc of flow in the City sewer system by
at least one-half of one Equivalent Dwelling Unit of flow shall pay a sewerage
faci1i!y particjpaiion fee Sewerage Cap2cj!y Charge. The base charge is hereby
established as $3,478 per Equivalent Dwelling Unit of flow."
SECTION II: California Environmental Quality Act (CEQA) Findings for Statutory Exemption.
The City Council does hereby find that the Sewerage Capacity Charge herein imposed is
for the purpose of obtaining funds for capital projects necessary to maintain service within
existing service areas. Therefore, the City finds that the adoption of this ordinance is statutorily
exempt under the provisions of CEQA Guidelines Section 15060(c)(3).
2-2
DRAFT
Ordinance --
Page 3
SECTION ill: Findings.
The City Council finds that the collection of the Sewerage Capacity Charge, established
by Ordinance No, 2107, at the time the buildmg permit is issued is necessary. This will ensure
that funds will be available for the acquisition of capacity rights in the Metro System, the
cODStruction of improvements, and to enhance capacity in the City's sewer system and to pay for
the treatment of sewage; and
The City Council finds that developers of land within the City should be req1.1ired to
mitigate the burden created by development through the payment of a fee to finance a
development's appropriate portion of the total cost of the sewer improvements, sewage treatment
and capacity rights in the Metro System; and
The City Council finds that the legislative findings and determinations set forth in the
ordinance referred to in the above recitals continue to be true and correct; and
The City Council finds, after consideration of the evidence presented to it, that the
increase of the Sewerage Capacity Charge is necessary in order to assure adequate sewer service
to the City; and
The City Council finds, based on the evidence presented at the meeting and the
information received by the City Council in the ordinary course of its business, that the
imposition of the Sewerage Capacity Charge on all future developments in the City for which
building permits have not been issued is necessary in order to protect the public health, safety
and welfare; and
The City Council finds that the amount of the amended fee levied by this ordinance does
not exceed the estimated cost of providing the sewer service to the developments within the City;
and
The City Council finds that it is appropriate to approve an increase to the Sewerage
Capacity Charge to reflect: the acquisition of additional capacity rights; the annual increase in
the Metropolitan Sewerage System Costs; the increase in the need for improvements created by
the demand for more capacity in the sewer system; and
The City Council finds it is necessary to ensure sewer capacity m the Metro system
before the reserved capacity is exhausted and to ensure the timely payment to adequately fund
ongoing and future sewer improvements to enhance capacity in the City's sewer system triggered
by future development.
SECTION IV: Time Limit for Protest and Judicial Action.
A:n.y judicial action or proceeding to attack, review, set aside, void or annul this ordinance
shall be brought within the period as established by law.
In accordance with Government Code Section 66020(d)(1), the ninety-day approval
period in which parties may protest begimring upon the effective date of this ordinance.
SECTION V: Effective Date.
2-3
Ordinance ----
Page 4
DRAFT
This ordinance shall become effective sixty (60) days after its second reading and
adoption.
Presented by
Alex Al-Agha
City Engineer
Approved as to fo= by
/
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2-4
COUNCIL AGENDA STATEMENT
Item: -3
Meeting Date: 5/17/05
ITEM TITLE:
Resolution Approving Chula Vista Tract No. 92-02a, Rolling
Hills Ranch, Subarea ill, Neighborhood lOA Final Map; accepting on
behalf of the City the various public easements, all as granted on said map
within said Subdivision; approving the Subdivision Improvement
Agreement for the completion of improvements required by said
Subdivision; approving the associated Supplemental Subdivision
Improvement Agreement; and authorizing the Mayor to execute said
agreements.
SUBMITTED BY:
Resolution Approving a Grant Of Easements, License And
Maintenance Agreement between McMrnillin Rolling Hills Ranch, LLC,
and The City Of Chula Vista for the maintenance of public right-of-way
within Rolling Hills Ranch Subarea III, Neighborhood lOA, and
authorizing the Mayor to execute said agreement.
City Engineer ~
City Manager ()
(4/5ths Vote: Yes _ No X )
REVIEWED BY:
On October 6, 1992, Council approved a Tentative Subdivision Map for Salt Creek Ranch, Chula
Vista Tract No. 92-02. On May 13,2003, Council approved an Amending Tentative Subdivision
Map for Rolling Hills Ranch (fonnerly known as Salt Creek Ranch) Subarea III, Chula Vista
Tract No. 92-02A, in which Neighborhoods 9 through 12 of the original Tentative Subdivision
Map were redesigned. Staff proposes that Council now consider approval of the Neighborhood
lOA Final Map, its associated Subdivision and Supplemental Subdivision Improvement
Agreements, and a Grant of Easements & Maintenance Agreement for privately maintained
public property.
RECOMMENDATION: That Council adopt the resolutions.
BOARDS AND COMMISSIONS: Not applicable.
DISCUSSION:
Rolling Hills Ranch Neighborhood IDA is a 37.7-acre project generally located north of Proctor
Valley Road and east of Hunte Parkway in the central portion of Rolling Hills Ranch Subarea III.
The project consists of 57 residential lots (see Attachment 1). The Tentative Map was approved
October 6, 1992 (Resolution No. 16834). An Amending Tentative Map was approved May 13,
2003 (Resolution No. 2003-199).
Final Map: The Final Map has been reviewed by the City Engineer and found to be in
substantial confonnance with the approved Tentative Map. The developer, McMillin Rolling
Hills Ranch, LLC, has already paid all applicable fees.
Council approval of the Final Map will constitute:
. Acceptance by the City of the fuel modification open space easements.
3-1
Page 2, Item '6
Meeting Date 5/17/05
·
Acceptance by the City of the sight visibility easements with the rights of ingress and
egress.
Acceptance by the City of the 5.50-foot tree planting and maintenance easements, with
the rights of ingress and egress for the construction and maintenance of street planting
along Adams Ranch Court, Stevenson Ranch Court, Ranch View Court and New Ranch
Court.
Acceptance by the City for public use of Adams Ranch Court, Stevenson Ranch Court,
Ranch View Court and New Ranch Court.
·
·
Associated Agreements: In addition to Final Map approval, staff recommends that Council
approve the following agreements associated with the project:
1. Subdivision Improvement Agreement: Requires the Developer to complete the
improvements required by said Subdivision. Security bonds have been provided,
guaranteeing the completion of all improvements and monumentation required by the
Municipal Code.
2. Supplemental Subdivision Improvement Agreement: Addresses several unfulfilled
conditions of the Tentative Map approved by Resolution No. 16834 and the Amending
Tentative Map approved by Resolution No. 2003-199. These conditions will remain in
effect until completed by the developer and/or their successors(s) in interest.
3. Grant of Easements. License & Maintenance Agreement: Establishes obligations and
responsibilities for the maintenance of certain improvements located within public rights-
of-way by the developer and/or their successor(s) in interest, as required by the Tentative
Map conditions of approval. .
The developer is in compliance with the Agreement for Monitoring Building Permits as
approved by Resolution 2003-166.
The above agreements have been reviewed by staff, and approved as to fonn by the City
Attorney.
FISCAL IMPACT: There is no impact to the General Fund. The developer has paid all fees
and other costs associated with the proposed Final Map and agreements.
Attachments:
Attachment I: Plat of Rolling Hills Ranch Neighborhood lOA, Chu]a Vista Tract No. 92-02A
Attachment 2: Developer's Disclosure Statement
Exhibit A: Subdivision Improvement Agreement
Exhibit B: Supplemental Subdivision Improvement Agreement
Exhibit C: Grant of Easements, License & Maintenance Agreement
TA File No. RH-237F
J :\EngineerlAGENDA \CAS2005\5- I 7 -05\RHR N lOA AI I 3 .doc
(05/10/2005; 3:08 PM)
3-2
CHULA VISTA TRACT NO. 92-02A
ROLLING HILLS RANCH
SUBAREA III NEIGHBORHOOD lOA
H:4'HULA VISTA TRACT NO. 92-02A
ROLLING HILLS RANCH
SUBAREA III "A" MAP
MAP NO. 14756
CHULA VISTA TRACT NO. 92-02A
ROLliNG HILLS RANCH
SUBAREA III "A" MAP
MAP NO. 14756
. HUNSAKER
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PLANNING 1017'1 Huennekens StÆet
ENGINEERING SarI Diego, ú 92121
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City of ChuIa Vista Disclosure Statement
Pursuant to Council Policy 101-01, prior to any action upon matters that will require discretionary action by the
Council, Planning Commission and all other official bodies of the City, a statement of disclosure of certain
ownership or financial interests, payments, or campaign contributions for a City ofChula Vista election must be
filed. The following information must be disclosed:
1. List the names of all persons having a financial interest in the property that is the subject of the
application or the contract, e.g., owner, applicant, contractor, subcontractor, material supplier.
1"f~.¡+1Úfh;,¡ £iI//¡j Æ#$ LN(.I., ¿.t-c.
2. If any person' identified pursuant to (1) above is a corporation or partnership, list the names of all
individuals with a $2000 investment in the business (corporation/partnership) entity.
3. If any person' identified pursuant to (1) above is a non-profit organization or trust, list the names of any
person serving as director of the non-profit organization or as trustee or beneficiary or trustor of the trust.
4. Please identify every person, including any agents, employees, consultants, or independent contractors
you have assigned to represent you before the City in this matter.
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5. Has any person' associated with this contract had any financial dealings with an official" of the City of
Chula Vista as it relates to this contract within the past 12 months. Yes_ N0--X-
3-4
City of Chula Vista Disclosure Statement
If Yes, briefly describe the nature of the financial interest the official" may have in this contract.
6. Have you made a contribution of more than $250 within the past twelve (12) months to a current member
of the Chula Vista City Council? No 1.. Yes _ rfyes, which Council member?
7.
Have you provided more than $340 (or an item of equivalent value) to an official" of the City of Chula
Vista in the past twelve (12) months? (This includes being a source of income, money to retire a legal
debt, gift, loan, etc.) Yes _ No--.X.-
If Yes, which official" and what was the nature of item provided?
Date:
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Signature of Contractor! Applicant I
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Print or type name of Contractor! Applicant
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Person is defmed as: any individual, finn, co-partnership,joint venture, association, social club, fraternal
organization, corporation, estate, trust, receiver, syndicate, any other county, city, municipality, district, or
other political subdivision, -or any other group or combination acting as a unit.
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Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member of a
board, commission, or committee of the City, employee, or staff members.
J:lAttorney\forms\disc1osure statement 3 -6-03
3-5
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DRAFT
RESOLUTION NO. 2005-x'XX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING CHULA VISTA TRACT
NO.92-02A, ROLLING HILLS RANCH, SUBAREA III,
NEIGHBORHOOD lOA FINAL MAP; ACCEPTING ON
BEHALF OF THE CITY THE VARIOUS PUBLIC
EASEMENTS, ALL AS GRANTED ON SAID MAP WITHIN
SAID SUBDIVISION; APPROVING THE SUBDIVISION
IMPROVEMENT AGREEMENT FOR THE COMPLETION OF
IMPROVEMENTS REQUIRED BY SAID SUBDIVISION;
APPROVING THE ASSOCIATED SUPPLEMENTAL
SUBDIVISION IMPROVEMENT AGREEMENT; AND
AUTHORIZING THE MAYOR TO EXECUTE SAID
AGREEMENTS
WHEREAS, MGMillin Rolling Hills Ranch, LLC, ("the developer") has submitted a fmal
map for Rolling Hills Ranch, Subarea III, Neighborhood lOA; and
WHEREAS, the developer has executed a Subdivision Improvement Agreement to install
public facilities associated with the project; and
WHEREAS, the developer has executed a Supplemental Subdivision Improvement
Agreement to satisfy remaining conditions of City Council Resolutions No. 16834 and No. 2003-
199.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista hereby finds that certain map survey eotitled Chula Vista Tract 92-02A, Rolling Hills
Ranch, Subarea III, Neighborhood lOA, and more particularly described as follows:
Lots "8" of Chula Vista Tract No.92-02A Rolling Hills Ranch, Subarea Ill,
according to "A" Map 14756 in the City of Chula Vista, County of San Diego,
State of California, filed in the office of the County Recorder of San Diego
County on March 24, 2004.
Area: 37.745 Acres
Numbered Lots: 57
Open Space Lots: 0.00 Acres
No. of Lots: 57
Lettered Lots: 0
is made in the manner and fonn prescribed by law and confonns to the surrounding surveys; and
that the map and subdivision ofland shown thereon is hereby approved and accepted.
BE IT FURTHER RESOLVED that the City Council hereby accepts on behalf of the
public the following public streets: Adams Ranch Court, Stevenson Ranch Court, Ranch View
Court and New Ranch Court, and these streets are hereby declared to be a public streets and
dedicated to the public use all as shown on the map within the subdivision.
BE IT FURTHER RESOLVED that the City Council hereby accepts on behalf of the
City of Chula Vista the various easements, all as granted on said map within this subdivision,
subj ect to the conditions set forth thereon.
3-7
Resolution 2005-XXX
Page 2
DRAFT
BE IT FURTHER RESOLVED that the City Clerk of the City of Chula Vista is hereby
authorized and directed to endorse upon the map the action of the City Council; that the City
Council has approved the subdivision map, and that the public streets are accepted on behalf of
the pubbc as therefore stated and that those certain easements, as granted thereon and shown on
said map within the subdivision, are accepted on behalf of the City of Chula Vista as herein
above stated.
BE IT FURTHER RESOLVED that that certain Subdivision Improvement Agreement for
the completion of improvements in the subdivision, a copy of which shall be kept on file in the
office of the City Clerk, is hereby approved.
BE IT FURTHER RESOLVED that that certain Supplemental Subdivision Improvement
Agreement for addressing on-going conditions of approval that will remain in effect and run with
the land for the map, a copy of which is on file in the Office of the City Clerk is hereby
approved.
BE IT FURTHER RESOLVED that the City Clerk is hereby directed to transmit said
map to the Clerk of the Board of Supervisors of the County of San Diego.
BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is hereby
authorized to execute said agreements on behalf of the City of Chula Vista.
Presented by
Approved as to form by
Alex Al-Agha
City Engineer
~~
oore
. y Attorney
3-8
DRAFT
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Ann Moore
City Attorney
Dated: ~, 10< 'OS--
Subdivision Improvement Agreement with
McMillin Rolling Hills Ranch, LLC for
Rolling Hills Ranch Subarea III, Neighborhood lOA
CVT 92-02A
3-9
Recording Requested by:
CITY CLERK
When Recorded, Mail to:
CITY OF CHULA VISTA
276 Fourth Avenue
Chula Vista, CA 91910
DRAFT
No transfer tax is due as this is a conveyance
to a public agency of less than a fee interest
for which no cash consideration has been paid or
received.
Declarant
SUBDIVISION IMPROVEMENT AGREEMENT
THIS AGREEMENT, made and entered into this day of ,2005, by and
between THE CITY OF CHULA VISTA, a municipal corporation, hereinafter called "City", and
MCMILLIN ROLLING HILLS RANCH, LLC, A DELAWARE LIMITED LIABILITY
COMPANY, 2727 Hoover Ave., National City, CA, hereinafter called "Subdivider" with
reference to the facts set forth below, which Recitals constitute a part of this Agreement;
RECITALS:
WHEREAS, Subdivider is about to present to the City Council of the City of Chula Vista
[City Council] for approval and recordation, a final subdivision map'of a proposed subdivision,
to be known as ROLLING HILLS RANCH SUBAREA III, NEIGHBORHOOD lOA (CVT 92-
02A) pursuant to the provisions of the Subdivision Map Act of the State of California, and in
compliance with the provisions of Title 18 of the Chula Vista Municipal Code [The Code]
relating to the filing, approval and recordation of subdivision map; and
WHEREAS, The Code provides that before said map is finally approved by the City
Council, Subdivider must have either installed and completed all of the public improv=ents
and/or land development work required by The Code to be installed in subdivisions before fmal
maps of subdivisions are approved by the City Council for purpose of recording in the Office of
the County Recorder of San Diego County, or, as an alternative thereto, Subdivider shall enter
into an agreement with City, secured by an approved improvement security to insure the
perfonnance of said work pursuant to the requirements of Title 18 of the Chula Vista Municipal
The Code, agreeing to install and complete, ftee of liens at Subdivider's own expense, all of the
public improvements and/or land development work required in said subdivision within a
definite period of time prescribed by said City Council; and
WHEREAS, Subdivider is willing in consideration of the approval and recordation of
said map bY'the City Council, to enter into this agreement wherein it is provided that Subdivider
-1-
3-10
DRAFT
will install and complete, at Subdivider's own expense, all the public improvement work required
by City in connection with the proposed subdivision and will deliver to City improvement
securities as approved by the City Attorney; and
WHEREAS, a tentative map of said subdivision has heretofore been approved, subject to
certain requirements and conditions, as contained in Resolution No. 16834, approved on the 6th
day of October, 1992 ("Tentative Map Resolution"); and
WHEREAS, an amending tentative map of said subdivision has heretofore been
approved, subject to certain requirements and conditions, as contained in Resolution No. 2003-
199, approved on the 13th day of May, 2003 ("Amending Tentative Map Resolution"); and
WHEREAS, complete plans and specifications for the construction, installation and
completion of said public improvement work have been prepared and submitted to the City
Engineer, as shown on Drawing No. 04029 on file in the office of the City Engineer; and
WHEREAS, an estimate of the cost of constructing said public improvements according
to said plans and specifications has been submitted and approved by the City in the amount of
EIGHT HUNDRED EIGHTY-TWO THOUSAND FIVE HUNDRED DOLLARS AND NO
CENTS ($882,500.00).
NOW, THEREFORE, IT IS MUTUALLY UNDERSTOOD AND AGREED AS
FOLLOWS:
1. Subdivider, for itself and his successors in interest, an obligation the burden of which
encumbers and runs with the land, agrees to comply with all of the tenns, conditions and
requirements of the Tentative Map Resolution and Amending Tentative Map Resolution; to do
and perform or cause to be done and performed, at its own expense, without cost to City, in a
good and workmanlike manner, under the direction and to the satisfaction and approval of the
City Engineer, all of the public improvement and/or land development work required to be done
in and adjoining said subdivision, including the improvements described in the above Recitals
("Improvement Work"); and will furnish the necessary materials therefore, all in strict
conformity and in accordance with the plans and specifications, which documents have
heretofore been filed in the Office of the City Engineer and as described in the above Recitals
this reference are incorporated herein and made a part hereof.
2. It is expressly understood and agreed that all monuments have been or will be
installed within thirty (30) days after the completion and acceptance of the Improvement Work,
and that Subdivider has installed or will install temporary street name signs if pennanent street
name signs have not been installed.
3. It is expressly understood and agreed that Subdivider will cause all necessary
materials to be furnished and all Improvement Work required under the provisions of this
contract to be done on or before the second anniversary date of City Council approval of the
Subdivision Improvement Agreement.
4. It is understood and agreed that Subdivider will perform said Improvement Work as
-2-
3-11
DRAFT
set forth hereinabove, or that portion of said Improvement Work serving any buildings or
structures ready for occupancy in said subdivision, prior to the issuance of any certificate of
clearance for utility connections for said buildings or structures in said subdivision, and such
certificate shall not be issued until the City Engineer has certified in writing the completion of
said public improvements or the portion thereof serving said building or structures approved by
the City; provided, however, that the improvement security shall not be required to cover the
provisions of this paragraph.
5. It is expressly understood and agreed to by Subdivider that, in the performance of said
Improvement Work, Subdivider will conform to and abide by all of the provisions of the
ordinances of the City of Chula Vista, and the laws of the State of California applicable to said
work.
6. Subdivider further agrees to furnish and deliver to the City of Chula Vista,
simultaneously with the execution of this agreement, an approved improvement security rrom a
sufficient surety, whose sufficiency has been approved by the City in the sum of FOUR
HUNDRED FOURTY-ONE THOUSAND TWO HUNDRED AND FIFTY DOLLARS AND
NO CENTS ($441,250.00) which security shall guarantee the faithful perfonnance of this
contract by Subdivider and is attached hereto, marked Exhibit "A" and made a part hereof.
7. Subdivider further agrees to furnish and deliver to the City of Chula Vista
simultaneously with the execution of this agreement, an approved improvement security rrom a
sufficient surety, whose sufficiency has been approved by the City in the sum of FOUR
HUNDRED FOURTY-ONE THOUSAND TWO HUNDRED AND FIFTY DOLLARS AND
NO CENTS ($441,250.00) to secure the payment of material and labor in connection with the
installation of said public improvements, which security is attached hereto, marked Exhibit "B"
and made a part hereof and the bond amounts as contained in Exhibit "B", and made a part
hereof.
8. Subdivider further agrees to furnish and deliver to the City of Chula Vista,
simultaneously with the execution of this agreement, an approved improvement security rrom a
sufficient surety, whose sufficiency has been approved by the City in the sum of ELEVEN
THOUSAND DOLLARS AND NO CENTS ($11,000.00) to secure the installation of
monuments, which security is attached hereto, marked Exhibit "c" and made a part hereof.
9. It is further agreed that if the Improvement Work is not completed within the time
agreed herein, the sums provided by said improvement securities may be used by City for the
completion of the Improvement Work within said subdivision in accordance with such
specifications herein contained or referred, or at the option of the City, as are approved by the
City Council at the time of engaging the work to be perfonned. Upon certification of completion
by the City Engineer and acceptance of said work by City, and after certification by the Director
of Finance that all costs hereof are fully paid, the whole amount, or any part thereof not required
for payment thereof, may be released to Subdivider or its successors in interest, pursuant to the
terms of the improvement security. Subdivider agrees to pay to the City any difference between
the total costs incurred to perform the work, including design and administration of construction
(including a reasonable allocation of overhead), and any proceeds from the improv=ent
-3-
3-12
security.
DRAFT
10. It is also expressly agreed and understood by the parties hereto that in no case will
the City of Chula Vista, or any department, board or officer thereof, be liable for any portion of
the costs and expenses of the work aforesaid, nor shall any officer, his sureties or bondsmen, be
liable for the payment of any sum or sums for said work or any materials furnished therefore,
except to the limits established by the approved improvement security in accordance with the
requirements of the State Subdivision Map Act and the provisions of Title 18 of The Code.
11. It is further understood and agreed by Subdivider that any engineering costs
(including plan checking, inspection, materials furnished and other incidental expenses) incurred
by City in connection with the approval of the Improvement Work plans and installation of
Improvement Work hereinabove provided for, and the cost of street signs and street trees as
required by City and approved by the City Engineer shall be paid by Subdivider, and that
Subdivider shall deposit, prior to recordation of the Final Map, with City a sum of money
sufficient to cover said cost.
12. It is understood and agreed that until such time as all Improvement Work is fully
completed and accepted by City, Subdivider will be responsible for the care, maintenance of, and
any damage to, the streets, alleys, easements, water and sewer lines within the proposed
subdivision. It is further understood and agreed that Subdivider shall guarantee all public
improvements for a period of one year rrom date of fInal acceptance and correct any and all
defects or deficiencies arising during said period as a result of the acts or omission of Subdivider,
its agents or employees in the perfonnance of this agreement, and that upon acceptance of the
work by City, Subdivider shall grant to City, by appropriate conveyance, the public
improvements constructed pursuant to this agreement; provided, however, that said acceptance
shall not constitute a waiver of defects by City as set forth hereinabove.
13. It is understood and agreed that City, as indemnitee, or any officer or employee
thereof, shall not be liable for any injury to person or property occasioned by reason of the acts
or omissions of Subdivider, its agents or employees, or indemnitee, related to this agreement.
Subdivider further agrees to protect and hold the City, its officers and employees, harmless rrom
any and all claims, demands, causes of action, liability or loss of any sort, because of or arising
out of acts or omissions of Subdivider, its agents or employees, or indemnitee, related to this
agreement; provided, however, that the approved improvement security shall not be required to
cover the provisions of this paragraph. Such indemnifIcation and agreement to hold harmless
shall extend to damages to adjacent or downstream properties or the taking of property rrom
owners of such adjacent or downstream properties as a result of the construction of said
subdivision and the public improvements as provided herein. It shall also extend to damages
resulting rrom diversion of waters, change in the volume of flow, modifIcation of the velocity of
the water, erosion or siltation, or the modification of the point of discharge as the result of the
construction and maintenance of drainage systems. The approval of plans providing for any or
all of these conditions shall not constitute the assumption by City of any responsibility for such
damage or taking, nor shall City, by said approval, be an insurer or surety for the construction of
the subdivision pursuant to said approved improvement plans. The provisions of this paragraph
shall become effective upon the execution of this agreement and shall remain in full force and
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effect for ten (10) years following the acceptance by the City ofthe improvements.
14. Subdivider agrees to defend, indemnify, and hold harmless the City and its agents,
officers, and employees rrom any claim, action, or proceeding against the City or its agents,
officers, or employees to attack, set aside, void, or annul, an approval of the City, advisory
agency, appeal board, or legislative body concerning this subdivision, which action is brought
within the time period provided for in Section 66499.37 of the Government Code of the State of
California.
15. Assignability. Upon request of the Subdivider, any or all on-site duties and
obligations set forth herein may be assigned to Subdivider's successor in interest if the City
Manager in his/her sole discretion detennines that such an assignment will not adversely affect
the City's interest. The City Manager in his/her sole discretion may, if such assignment is
requested, pennit a substitution of securities by the successor in interest in place instead of the
original securities described herein so long as such substituted securities meet the criteria for
security as set forth elsewhere in this Agreement. Such assignment will be in a fo= approved
by the City Attorney.
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SIGNATURE PAGE ONE OF TWO
SUBDIVISION IMPROVEMENT AGREEMENT
ROLLING HILLS RANCH SUBAREA III, NEIGHBORHOOD IDA
(CVT 92-02A)
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
the day and year first hereinabove set forth.
THE CITY OF CHULA VISTA
Stephen C. Padilla
Mayor
ATTEST:
Susan Bigelow
City Clerk
Approved as to form by
Ann Moore
City Attorney
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SIGNATURE PAGE TWO OF TWO
SUBDIVISION IMPROVEMENT AGREEMENT
ROLLING HILLS RANCH SUBAREA III, NEIGHBORHOOD IDA
(CVT 92-02A)
McMillin Rolling Hills Ranch, LLC
A Delaware limited liability company
By: McMillin Management Services, L.P.
A California limited partnership
Its: Manager
By: Corky McMillin Construction Services, Inc.
A California corporation
Its: General Partner ./' .
BY:~~
Its: J¡Zu
(Attach Notary Acknowledgment)
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McMillin Land Development
A Corky McMUlin Company
DRAFT
}
STATE OF CALIFORNIA }ss.
COUNTY OF SAN DIEGO }
On May 2, 2005 , before me, Brenda N. Henderson, Notary Public
personally appeared Tom Tomlinson and Todd Galarneau, personally known to me to be the
persons whose names are subscribed to the within instrument and acknowledged to me that
they executed the same in their authorized capacities, and that by their signatures on the
instrument the persons or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
Signature ðÝ-A~ßcIø---'Jí. 1i:£~Uf-
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C_J':c.·,~~'~~~:~~2:~::,~~~L~~-,,:~.~ :J
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This area foraffidal notarial seal
McMillin Rolling Hills Ranch Subdivision Improvement Agreement for Neighborhood 10A (CVT 92-
02A)
..\\...\\. .A, ..\\. ..\\.
McMillin Realty MçMillin Mortgage McMillin land Development McMillin Homes McMillin Commercial
'1-17
Corporate Office· 2727 Hoover Avenue· National City, CA 9ì~50 It Tel (619) 477-4117 . Fax (619) 336-3112 . www.mcmillin.com
LIST OF EXHIBITS
Exhibit "A"
Improvement Security - Faithful Performance
Fonn: Bond
Amount:
$441,250.00
Exhibit "B"
Improvement Security - Material and Labor:
Fonn: Bond
Amount:
$441,250.00
Exhibit "C"
Improvement Security - Monuments:
Fonn: Bond
Amount:
$11,000.00
Securities approved as to fonn and amount by
DRAFT
City Attorney
Improvement Completion Date: Two (2) years from date of City Council approval of the
Subdivision Improvement Agreement.
J:\Engineer\LANDDEV\Projects\Rolling Hills Ranch\Neighborhood 9A\SlA RHR N9A Map - Final Draft.doc
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THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Ann Moore
City Attorney
Dated: S:-. j O· lJ S
Supplemental Subdivision Improvement Agreement with
McMillin Rolling Hills Ranch, LLC for
Rolling Hills Ranch Subarea III, Neighborhood lOA
CVT 92-02A
3-19
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RECORDING REQUEST BY:
Developer
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City Clerk
WHEN RECORDED MAIL TO:
CITY OF CHULA VISTA
276 Fourth Avenue
Chula Vista, CA 91910
No transfer tax is due as this is a
conveyance to a public agency of
less than a fee interest for which
no cash consideration has been paid
or received.
Above Space for Recorder's Use
SUPPLEMENTAL SUBDIVISION IMPROVEMENT AGREEMENT
FOR CHULA VISTA TRACT NO. 92-02A,
ROLLING HILLS RANCH SUBAREA III NEIGHBORHOOD 10A
(Conditions 2, 3,4,58, 59, 64, 89, 120, 122, 123, 124, 128 of Resolution 16834 for Chula
Vista Tract No. 92-02, Salt Creek Ranch and 29, 55, 88, 92, 133, 137 of Resolution 2003-
199 for Chula Vista Tract No. 92-02A, Rolling Hills Ranch Subarea III)
This Supplemental Subdivision Improvement Agreement ("Agreement") is made this
_day of ,2005, by and between THE CITY OF CHULA VISTA,
California ("City" or "Grantee" for recording purposes only) and MCMILLIN ROLLING
HILLS RANCH, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Developer" or
"Grantor"), with reference to the facts set forth below, which recitals constitute a part of this
Agreement:
RECITALS
A. This Agreement concerns and affects certain real property located in Chula Vista,
California, more particularly described on Exhibit "A" attached hereto and
incorporated herein ("Property"). The Property is referred to as Rolling Hills Ranch
Subarea III Neighborhood 10A, Chula Vista Tract No. 92-02A. For purposes ofthis
Agreement the term "Project" shall mean "Property".
B. Developer is the owner of the Property.
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C. The City has adopted Resolution 16834 ("Resolution") pursuant to which it has
approved the Salt Creek Tentative Subdivision Map subject to certain conditions as
more particularly described in the Resolution.
D. Developer has applied for and the City has approved an Amending Tentative
Subdivision Map commonly referred to as Chula Vista Tract No. 92-02A, Rolling
Hills Ranch Subarea III Neighborhoods 9-12, ("Tentative Subdivision Map") for the
subdivision of the Property.
E. The City has adopted Resolution 2003-199 ("Amending Resolution") pursuant to
which it has approved the Amending Tentative Subdivision Map subject to certain
conditions as more particularly described in the Resolution.
F. City is willing, on the premises, security, terms and conditions herein contained to
approve the Final Map for which Developer has applied as being in substantial
conformance with the Tentative Subdivision Map described in this "B" map
Agreement.
G. The Project has been reviewed for consistency with the following environmental
documents: FEIR-89-03; FSEIR-91-03 (hereinafter referred to as the Project EIRs).
The Project will be developed in accordance with these EIRs and all mitigation
measures set forth in the respective Mitigation Monitoring and Reporting Programs
(MMRPs).
NOW, THEREFORE, in exchange for the mutual covenants, terms and conditions herein
contained, the parties agree as set forth below.
1. Agreement Applicable to Subsequent Owners.
1.1 Agreement Binding Upon Successors. This Agreement shall be binding
upon and inure to the benefit of the successors, assigns and interests of the parties
as to any or all of the Property as described in Exhibit "A" until released by the
mutual consent of the parties.
1.2 Agreement Runs with the Land. The burden of the covenants contained in
this Agreement ("Burden") is for the benefit of the Property and the City, its
successors and assigns and any successor in interest thereto. City is deemed the
beneficiary of such covenants for and in its own right and for the purposes of
protecting the interest of the community and other parties public or private, in whose
favor and for whose benefit of such covenants running with the land have been
provided without regard to whether City has been, remained or are owners of any
particular land or interest therein. If such covenants are breached, the City shall
have the right to exercise all rights and remedies and to maintain any actions or
suits at law or in equity or other proper proceedings to enforce the curing of such
breach to which it or any other beneficiaries of this agreement and the covenants
may be entitled.
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a. Developer Release on Guest Builder Assignments. If Developer
assigns any portion of the Project to a Guest Builder, Developer may request to be
released from Developer's obligations under this Agreement, that are expressly
assumed by the Guest Builder, provided Developer obtains the prior written consent
of the City Manager or his designee to such release. Such assignment to the Guest
Builder shall, however, be subject to this Agreement and the Burden of this
Agreement shall remain a covenant running with the land. The City shall not withhold
its consent to any such request for a release so long as the assignee acknowledges
that the Burden of the Agreement runs with the land, assumes the obligations of the
Developer under this Agreement, and demonstrates, to the satisfaction of the City, its
ability to perform its obligations under this Agreement as it relates to the portion of the
Project which is being acquired by the Assignee.
b. Partial Release of Developer's Assignees. If Developer assigns any
portion of the Project subject to the Burden of this Agreement, upon request by the
Developer or its assignee, the City shall release the assignee of the Burden of this
Agreement as to such assigned portion if such portion has complied with the
requirements of this Agreement to the satisfaction of the City and such partial
release will not, in the opinion of the City, jeopardize the likelihood that the
remainder of the Burden will not be completed.
c. Release of Individual Lots. Upon the occurrence of any of the following
events, the Developer shall, upon receipt of the prior written consent of the City
Manager (or Manager's designee), have the right to release any lot(s) from
Developer's obligation under this Agreement:
i. The execution of a purchase agreement for the sale of a
residential lot to a buyer of an individual housing unit;
Ii. The conveyance of a lot to a Homeowner's Association;
iii. The conveyance of a school site as identified in the SPA
Plan to a school district;
The City shall not withhold its consent to such release so long as the City finds in
good faith that such release will not jeopardize the City's assurance that the
obligations set forth in this Agreement will be performed. At the request of the
Developer, the City Manager (or Manager's designee) shall execute an
instrument drafted by Developer in a recordable form acceptable to the City
Manager (or Manager's designee), which confirms the release of such lot or
parcel from the encumbrance of this Agreement.
Notwithstanding the foregoing, at the close of an individual homeowner's escrow
on any lot or parcel encumbered by this Agreement, such lot or parcel shall be
automatically released from the encumbrance hereof.
2. Condition No.2 of Resolution 16834 (Public Facilities Financing Plan). In
satisfaction of Condition No.2 of Resolution 16834, the Developer agrees to install public
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facilities in accordance with the Public Facilities Financing Plan as amended by Resolution
2000-190 on June 13, 2000 or as required by the City Engineer to meet threshold
standards adopted by. the City. In addition, the sequence that improvements are
constructed shall correspond to any future East Chula Vista Transportation Phasing Plan
as may be amended in accordance with the financing study adopted by the City. The
Developer further acknowledges that the City Engineer and the Planning Director may, at
their discretion, modify the sequence of improvement construction should conditions
change to warrant such a revision.
3. Condition No.3 of Resolution 16834 (General Preliminary). In satisfaction of
Condition NO.3 of Resolution 16834, the Developer agrees that mitigation measures
required before Final Map approval by Final Supplemental Environmental Impact Report
for Salt Creek Ranch (FSEIR) 91-03 are hereby incorporated into this agreement by
reference. Any such measures not satisfied by a specific condition of this agreement or by
the project design shall be implemented to the satisfaction of the Director of Planning.
Mitigation measures shall be monitored via the Mitigation Monitoring Program approved in
conjunction with the FSEIR. Modification of the sequence of mitigation shall be at the
discretion of the Director of Planning should changes in circumstances warrant such
revision.
4. Condition No.4 of Resolution 16834 (General Preliminary). In satisfaction of
Condition NO.4 of Resolution 16834, unless otherwise conditioned, the Developer shall
comply with, remain in compliance with, and implement, the terms, conditions and
provisions of 1) the Salt Creek Ranch General Development Plan (GDP) approved by City
Council Resolution 15875 on September 25, 1990 and amended by City Council
Resolution 2003-198 on May 13, 2003; 2) Salt Creek Ranch Sectional Planning Area
(SPA) Plan approved by the City Council Resolution No. 16555 on March 24, 1992 and
amended by City Council Resolution 2003-386 on August 26, 2003; 3) the Rolling Hills
Ranch Planned Community District Regulations and Land Use Map approved by City
Council Ordinance No. 2499 on April 7, 1992 and amended by Ordinance No. 2932 on
September 16, 2003; 4) Public Facilities Financing Plan approved by City Council
Resolution 16555 on March 24,1992 and amended by Resolution 2000-190 on June 13,
2000; 5) Tentative Subdivision Map for Salt Creek Ranch, Chula Vista Tract 92-02
previously approved by City Council Resolution Number 16834 on October 6, 1992 and
amended by City Council Resolution 2003-199 on May 13, 2003; 6) Agreement for
Monitoring of Building Permits approved by City Council Resolution 2003-166 on April 15,
2003; 7) the Master Plan of Reclaimed Water; 8) Urban Runoff Report; 9) Habitat
Enhancement Plan; 10) Master Plan of Sewage; 11) Water Conservation Plan; and 12) the
Air Quality Improvement Plan Design Guidelines as are applicable to the property which is
the subject matter of the Tentative Map, prior to approval of the Final Maps, or shall have
entered into an agreement with the City, providing the City with such security (including
recordation of covenants running with the land) and implementation procedures as the City
may require, assuring that, after approval of the Final Map, the Developer shall continue to
comply with, remain in compliance with, and implement such Plans. Developer hereby
agrees to waive any claim that the adoption of a final Water Conservation Plan or Air
Quality Improvement Plan constitutes an improper subsequent imposition of the condition.
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5. Condition No. 29 of Resolution 2003-199 (Sewer Pump Stàtion). In partial
satisfaction of Condition No. 2003-199, the Developer agrees to not request building
permits until the Salt Creek Ranch sewer pumpstation has been accepted by the City.
6. Condition No. 55 of Resolution 2003-199 (Threshold and Withholding of
Building Permits). In satisfaction of Condition No. 55 of Resolution 2003-199 Developer
agrees to the following
a. That the City may withhold building permits for the subject subdivision if any
one of the following occur:
i. Regional development threshold limit set by the Chula Vista
Transportation Phasing Plan, as amended from time to time, have
been reached or in order to have the Project comply with the
Growth Management Program, as may be amended from time to
time.
ii. Traffic volumes, levels of service, public utilities and/or services
either exceed the adopted City threshold standards or fail to
comply with the then effective Growth Management Ordinance
and Growth Management Program and any amendments thereto.
Public utilities shall include, but not be limited to, air quality,
drainage, sewer and water.
iii. The required public facilities, as identified in the PFFP or as
amended or otherwise conditioned have been completed or
constructed to the satisfaction of the City. The Developer may
propose changes in the timing and sequencing of development
and the construction of improvements affected. In such case, the
PFFP may be amended as approved by the City's Director of
Planning and building and the Public Works Director. Developer
agrees that the City may withhold building permits for any of the
phases of development identified in the Public Facilities Financing
Plan (PFFP) for the Project if the required public facilities, as
identified in the PFFP have not been completed.
b. That the City may withhold the issuance of building permits for the Project,
should the Developer be determined by the City to be in breach of any of the
terms of the tentative Map Conditions or any Supplemental Agreement. The
City shall provide the Developer of notice of such determination and allow
the Developer reasonable time to cure said breach.
7. Condition No. 58 of Resolution 16834 (Indemnification). In satisfaction of
Condition No. 58 of Resolution 16834, the Developer agrees to defend, indemnify, and
hold harmless the City and its agents and employees, from and against any claims for
5
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damages or other relief related to alleged erosion, action, or proceeding against the City, or
its agents, officers, or employees to attack, set aside, void, or annul any approval by the
City, including approval by its Planning Commission, City Councilor any approval by its
agents, officers, or employees with regard to this subdivision provided the City promptly
notifies the subdivider of any claim, action, or proceeding and on the further condition that
the City fully cooperates in the defense.
8. Condition No. 59 of Resolution 16834 (Erosion). In satisfaction of Condition No.
59 of Resolution 16834, the developer agrees to defend, indemnify and hold harmless, the
City, and its agents and employees, from and against any claims for damages or other
relief related to alleged erosion, siltation or increased flow of drainage resulting from this
Project.
9. Condition No. 64 of Resolution 16834 (Telegraph Canyon Trunk Sewer
Improvements). In satisfaction of Condition No. 64 of Resolution 16834, until such time
as the Salt Creek Trunk Sewer is constructed to the satisfaction of the City Engineer, the
Developer agrees to participate in the monitoring of existing sewage flows in the Telegraph
Canyon Trunk Sewer and, pursuant to any adopted Basin Plan, agree to participate in the
financing of improvements set forth therein, in an equitable manner.
10. Condition No. 88 of Resolution 2003-199 (Brush Management). In partial
satisfaction of Condition No. 88 of Resolution 2003-199, the Developer agrees to provide,
prior to issuance of the first building permit in Neighborhood 10A, the initial cycle of fire
management/brush clearance within designated brush management HOA lots for the
Property subject to the approval of the Fire Marshal and the Landscape Architecture
Division and Environmental Review Coordinator.
11. Condition No. 89 of Resolution 16834 (Fire Hydrants). I n satisfaction of Condition
No. 89 of Resolution 16834, the Developer agrees to install fire hydrants every 500 ft. for
single family residential, to install and make operable the hydrants prior to delivery of
combustible building materials, and comply with Chula Vista Fire Department Policy No.
2916.00, as amended from'time to time, to the satisfaction of the City Fire Marshal.
12. Condition No. 92 of Resolution 2003-199 (Fuel Modification Zone Plantings). In
partial satisfaction of Condition No. 92 of Resolution 2003-199, the Developer agrees that
any new plantings within the Fuel Modification Zone shall be non-invasive and subject to
the approval of the Environmental Review Coordinator and Landscape Architecture
Division.
13. Condition No. 120 of Resolution 16834 (Bench Marks). In partial satisfaction of
Condition No. 120 of Resolution 16834, the Developer agrees to payoff all existing deficit
accounts associated with the processing of this application to the satisfaction of the
Director of Planning and to provide permanent City bench marks tied to the City System at
the following locations:
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1. Mt. Miguel Road/Mackenzie Creek Road
2. East "H" Street/Both Subdivision Boundaries
3. East "H" Street/Hunte Parkway
4. . Otay Lakes Road/Rutgers
14. Condition No. 122 of Resolution 16834 (Underground Utilities). In satisfaction of
Condition No. 122 of Resolution 16834, the Developer agrees to underground all utilities
within the subdivision in accordance with Municipal Code requirements.
15. Condition No. 123 of Resolution 16834 (Fire Sprinklers). In satisfaction of
Condition No. 123 of Resolution 16834, the Developer agrees to provide some lots with
residential fire sprinkler systems due to access requirements as determined by the Fire
Marshal.
16. Condition No. 124 of Resolution 16834 (Planned Community Di~trict
Regulations). In satisfaction of Condition No. 124 of Resolution 16834, the Developer
agrees that all proposed development shall be consistent with the Salt Creek Ranch SPA
Planned Community District Regulations, subject to the approval of the Director of
Planning.
17. Condition No. 128 of Resolution 16834 (Fees). In satisfaction of Condition No. 128
of Resolution 16834, the Developer agrees to pay all applicable fees in accordance with
the City Code and Council Policy, including, but not limited to, the following:
Prior to issuance of the first building permit:
1. The Transportation and Public Facilities Development Impact Fees.
2. Signal Participation Fees.
3. All applicable sewer fees, including but not limited to sewer
connection fees.
4. Salt Creek Sewer Basin Fee.
5. Sewer Pump Station DIF.
18. Condition No. 133 of Resolution 2003·199 (Violations). In satisfaction of Condition
No. 133 of Resolution 2003-199, the Developer agrees that the approval of this map by the
City of Chula Vista does not authorize the Developerto violate Federal, State or City laws,
ordinances, regulations or policies, including, but not limited to the Federai Endangered
Species Act of 1973 and any amendments thereto.
19. Condition No. 137 of Resolution 2003-199 (Violations). In partial satisfaction of
Condition No. 137 of Resolution 2003-199, the Developer agrees to cause street sweeping
to commence immediately after the final residence in each phase is occupied and shall
continue sweeping until such time that the City has accepted the street or 60 days after the
completion of all punch list items, whichever occurs earlier. The developer further agrees
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to provide 'the Assistant Director of Public Works (ADPWO) with a copy of the memo
requesting street sweeping service, which memo shall include a map of areas to be swept
and the date the sweeping will begin.
20. Satisfaction of Conditions. City agrees that the execution of this Agreement
constitutes satisfaction or partial satisfaction of Developer's obligation for this Project of
Conditions 2, 3, 4, 58, 59, 64, 89, 120, 122, 123, 124, 128 of Resolution 16834 for Chula
Vista Tract No. 92-02, Salt Creek Ranch and 29,55,88,92, 133, 137 of Resolution 2003-
199 for Chula Vista Tract No. 92-02A, Rolling Hills Ranch Subarea III.
21. Unfulfilled Conditions. Developer hereby agrees, unless otherwise conditioned,
that Developer shall comply with all unfulfilled conditions of approval of the Salt Creek
Ranch, Chula Vista Tract No. 92-02 Tentative Map (adopted by Resolution 16834) and the
Amending Tentative Map for Rolling Hills Ranch, Chula Vista Tract No. 92-02A (adopted by
Resolution 2003-199) and shall remain in compliance with and implement the terms,
conditions and provisions of the Resolutions.
22. Previous Agreements. The Developer acknowledges that nothing in this Agreement
shall supersede, nullify or otherwise negatively impact the terms of previous agreements as
they apply to the Project including the Agreement for Monitoring of Building Permits as
approved by Resolution 2003-166.
23. Recording. This Agreement, or an abstract hereof prepared by either or both parties,
may be recorded by either party.
24. Assignability. Upon request of the Developer, any or all on-site duties and
obligations set forth herein may be assigned to subdivider's successor in interest ifthe City
Manager in his/her sole discretion determines in writing that such an assignment will not
adversely affect the City's interest. The City Manager in his/her sole discretion may, if such
assignment is requested, permit a substitution of securities by the successor in interest in
place and stead of the original securities described herein, so long as such substituted
securities meet the criteria for security as set forth elsewhere in this Agreement. Such
assignment will be in a form approved by the City Attorney.
25. Building Permits. Developer understands and agrees that the City may withhold the
issuance of building permits for the Project, should the Developer be determined by the
City to be in breach of any of the terms of this Agreement. The City shall provide the
Developer of notice of such determination and allow the Developerwith reasonable time to
cure said breach.
26. Miscellaneous.
a. Notices. Unless otherwise provided in this Agreement or by law, any and all
notices required or permitted by this Agreement or by law to be served on or
delivered to either party shall be in writing and shall be deemed duly served,
8
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delivered, and received when personally delivered to the party to whom it is
directed, or in lieu thereof, when three (3) business days have elapsed
following deposit in the U.S. mail, certified or registered mail, return receipt
requested, first-class postage prepaid, addressed to the address indicated in
this Agreement. A party may change such address for the purpose of this
paragraph by giving written notice of such change to the other party.
CITY OF CHULA VISTA
276 Fourth Avenue
Chula Vista, CA 91910
Attn: City Engineer
Developer:
McMillin Rolling Hills Ranch, LLC
2727 Hoover Ave.
National City, California 91950
Attn: Rodney Lubojasky
A party may change such address for the purpose of this paragraph by giving
written notice of such change to the other party in the manner provided in this
paragraph.
b. Captions. Captions in this Agreement are inserted for convenience of
reference and do not define, describe or limit the scope or intent of this
Agreement or any of its terms.
c. Entire Agreement. This Agreement contains the entire agreement between
the parties regarding the subject matter hereof. Any prior oral or written
representations, agreements, understandings, and/or statements shall be of
no force and effect. This Agreement is not intended to supersede or amend
any other agreement between the parties unless expressly noted.
d. Preparation of Agreement. No inference, assumption or presumption shall
be drawn from the fact that a party or his attorney prepared and/or drafted
this Agreement. It shall be conclusively presumed that both parties
participated equally in the preparation and/or d rafting this Agreement.
e. Recitals; Exhibits. Any recitals set forth above and exhibits referenced
herein are incorporated by reference into this Agreement.
f. Attorneys' Fees. If either party commences litigation for the judicial
interpretation, reformation, enforcement or rescission hereof, the prevailing
party will be entitled to a judgment against the other for an amount equal to
reasonable attorney's fees and court costs incurred. The "prevailing party"
shall be deemed to be the party who is awarded substantially the relief
sought.
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(NEXT PAGE IS SIGNATURE PAGE)
10
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PAGE ONE OF TWO SIGNATURE PAGES TO THE
SUPPLEMENTAL SUBDIVISION IMPROVEMENT AGREEMENT FOR
McMillin Rolling Hills Ranch LLC
Subarea III, Neighborhood 10A
CHULA VISTA TRACT NO. 92-02A
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first hereinabove set forth.
THE CITY OF CHULA VISTA
Stephen C. Padilla
Mayor
Attest:
Susan Bigelow
City Clerk
Approved as to form:
Ann Moore
City Attorney
[NEXT PAGE IS PAGE TWO OF TWO SIGNATURE PAGES]
11
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PAGE ONE OF TWO SIGNATURE PAGES TO THE
SUPPLEMENTAL SUBDIVISION IMPROVEMENT AGREEMENT FOR
McMillin Rolling Hills Ranch LLC
Subarea III, Neighborhood 10A
CHULA VISTA TRACT NO. 92-02A
DEVELOPERS/OWNERS:
McMillin Rolling Hills Ranch, LLC
A Delaware Limited Liability Company
By: McMillin Management Services, L,P.
A California limited partnership
Its: Manager
By: Corky McMillin Construction Services, Inc.
A California corporation
Its: ::n~~,~~~
~
(Attach Notary Acknowledgment)
12
3-31
~,\.
McMillin 1~M1ß,,)2~'y'elopment
DRAFT
}
STATE OF CALIFORNIA }ss.
COUNTY OF SAN DIEGO }
On May 02,2005 , before me, Brenda N. Henderson, Notary Public
personally appeared Tom Tomlinson and Todd Galarneau, personally known to me to be the
persons whose names are subscribed to the within instrument and acknowledged to me that
they executed the same in their authorized capacities, and that by their signatures on the
instrument the persons or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
Signature ~;/tz.
I
1; ~1du<Ur-
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This area foroffidal nolarial seal
McMillin Rolling Hills Ranch Supplemental Subdivision Improvement Agreement for Chula Vista
Tract No. 92-02A Neighborhood 10A
..\\. ..\\. Â\. ..\\. ..\\.
McMil1in Realty McMillin Mortgage McMillin Land Development McMillin Homes McMillin Commercial
Corporate Office· 2727 Hoover Avenue· National City, CA ~95&2 Tel (619) 477-4117 . Fax (619) 336-3112 . www.mcmì!lin.com
DRAFT
List of Exhibits
Exhibit "A" - Legal Description of McMillin Rolling Hills Ranch Subarea III Neigh. 10A
13
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DRAFT
EXHIBIT "An
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:
LOTS 1 THROUGH 57 OF CHULA VISTA TRACT NO. 92-02A, ROLLING HILLS RANCH,
SUBAREA III, NEIGHBORHOOD 10A MAP, IN THE CITY OF CHULA VISTA, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.
. . ,FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY ON AS INSTRUMENT NO.
J:\ENGINEER\LANDDEV\PROJECTS\ROLLlNG HILLS RANCH\NEIGHBORHOOD 10A\SSIA RHR N10A MAP - FINAL DRAFTDOC
14
3-34
RESOLUTION NO. 2005-X:XX
DRAFT
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A GRANT OF EASEMENTS,
LICENSE AND MAINTENANCE AGREEMENT BETWEEN
MCMILLIN ROLLING HILLS RANCH, LLC, AND THE CITY
OF CHULA VISTA FOR THE MAINTENANCE OF PUBLIC
RIGHT-OF-WAY WITHIN ROLLING illLLS RANCH
SUBAREA III, ]\¡"EIGHBORHOOD lOA, AND AUTHORIZING
THE MAYOR TO EXECUTE SAID AGREEMENT
WHEREAS, McMillin Rolling Hills Ranch, LLC, ("the developer") has submitted a final
map for Rolling Hills Ranch, Subarea III, Neighborhood IDA, Chula Vista Tract No. 92-02A;
and
WHEREAS, the developer has executed a Supplemental Subdivision Improvement
Agreement in which it has agreed to maintain certain areas of the public right-of-way through the
creation of a homeowner's association ("HOA"); and
WHEREAS, the Grant of Easements, License, and Maintenance Agreement sets forth the
obligations of the developer, the Master HOA, and subsequent Transferees in maintaining the
public right-of-way;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby approve the Grant of Easements, License and Maintenance Agreement,
between McMillin Rolling Hills Ranch LLC and the City of Chula Vista for the maintenance of
public right-of-way within Rolling Hills Ranch Subarea III Neighborhood lOA, a copy of which
shall be kept on file in the office of the City Clerk.
BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is hereby
authorized and directed to execute said agreements for and on behalf of the City of Chula Vista.
Presented by
Approved as to form by
Alex AI-Agha
City Engineer
re
City ttorney
3-35
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
,,'~,
/!t~¿/bL ,
/ .../. Moore
L./' City Attorney
Dated: S J I'D / ðS-
Grant of Easements, License, arid Maintenance Agreement with
McMillin Rolling Hills Ranch, LLC for
Rolling Hills Ranch Subarea III, Neighborhood lOA
CVT 92-02A
3-36
DRAFT
DRAFT
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City Clerk
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
No transfer tax is due as this is a conveyance to
a public agency for less than a fee interest for
which no cash consideration has been paid or
received.
(ABOVE SPACE FOR RECORDER'S USE)
GRANT OF EASEMENTS, LICENSE AND MAINTENANCE
AGREEMENT
CHULA VISTA TRACT NO. 92'-02A
ROLLING HILLS RANCH, SUBAREA III, NEIGHBORHOOD lOA
(DEDICA TED EASEMENTS)
This GRANT OF EASEMENTS, LICENSE AND MAINTENANCE AGREEMENT
("Agreement") is made as of this _ day of ,200-, by and between the CITY OF
CHULA VISTA, a municipal corporation ("City"), and McMILLIN ROLLING HILLS RANCH, LLC,
a Delaware limited liability company ("McMillin RHR").
RECITALS
A. This Agreement concerns and affects certain real property located in Chula Vista,
California, more particularly described in Exhibit A attached hereto and incorporated herein
("Property"). The Property is part of a planned residential development project commonly known
as "Rolling Hills Ranch II" (and also referred to as "Rolling Hills Ranch Subarea III"), Chula Vista
Tract No. 92-02A. F or purposes of this Agreement, the term "Project" shall refer to the overall Rolling
Hills Ranch II planned development proj ect, including, but not limited to the "Property."
B. McMillin RHR is the Declarant under that certain Master Declaration of Restrictions
For Rolling Hills Ranch II filed or to be filed for record in the Official Records of San Diego County,
California (the "Master Declaration"). The Master Declaration provides for Rolling Hills Ranch II
Master Association, a California nonprofit mutual benefit corporation (nMHOA") to maintain certain
areas in the Project. Furthe=ore, one or more sub-associations may be fo=ed ("SHOA") for a
particularproject(s) within Rolling Hills Ranch II, the purposes of which would include the maintenance
of certain amenities within the Project over which the SHOA has jurisdiction.
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C, The Property is or will become covered by that the certain [mal map(s) (the "Final
Maps") described on Exhibit "A" attached hereto and referenced in the title to this Agreement.
D. 10 order for McMillin RHR to obtain the Final Maps and for the City to have assurance
that the maintenance of certain areas within the Project would be provided for, the City and McMillin
RHR entered into a Suppl=ental Subdivision Improvement Agre=ent pursuant to the City Resolution,
in which McMillin RHR agreed that maintenance of such areas shall be accomplished by the creation
of a home owners association. The Parcels shown on Exhibit "B" attached hereto describe those
particular areas which were dedicated to the public on one or more of the Final Maps but which include
landscaping and drainage improvements to be maintained by the MHOA. The public areas to be
maintained by the MHOA are collectively referred to as the "MHOA Maintained Public Areas."
E. The City desires to grant to McMillin RHR easements for landscape maintenance
purposes upon, over and across the MHOA Maintained Public Areas as shown on Exhibit "B," in
order to facilitate the obligations of McMillin RHR as set forth in Supplemental Subdivision
Improvernent Agreements, adopted pursuant to the City Resolution.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties
agree as set forth below.
I. Grant of Easements, The City hereby grants to McMillin RHR and its agents, successors
and assigns, non-exclusive easements and rights-of-way over and across the MHOA Maintained Public
Areas for the purpose of maintaining, repairing and replacing landscaping improv=ents located thereon.
These grants are made without any warranties of any kind, express or implied, other than the warranty
stated in Paragraph 14(t) below.
2, Maintenance Obligations
(a) McMillin RHR to Initially Maintain. McMillin RHR hereby covenants and
agrees, at its sole cost and expense, to maintain, repair and replace, or cause to be maintained,
repaired or replaced, those improvements within the MHOA Maintained Public Areas whìch
are described on Exhibit "C" attached hereto, at a level equal to or better than the level of
maintenance which is acceptable to the Director of Public Works Operations, at hislher
discretion and equivalent to City or Community Facilities District maintained right-of-way
facilities. For purposes of this Agreement, the term "Maintenance" or "Maintain" shall mean
the maintenance, repair, and replacement obligations described herein and on Exhibit nCn
hereto and shall also include repair and replacement at no cost to the City of any City owned
property that is damaged during performance of the maintenance responsibilities pursuant
to this Agreement. Exhibit nc" also refers to the maintenance responsibilities of the City.
(b) Transfer to MHOA. Upon McMillin RHR's transfer of maintenance obligations
to the MHOA, (i) the MHOA shall become obligated to perfonn the obligations so transferred,
and (ii) subject to the City detennining that the requirements of Paragraph 3 below have been
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satisfied, McMillin RHR shall be released from such obligation. Transfer of maintenance
obligations to the MHOA may be phased (that is, there may be multiple transfers).
McMillin RHR represents to City that it intends to, and has the authority to, unilaterally
transfer said maintenance obligations either (i) to the MHOA and that such transfer has been
provided for in the Declaration, and that such document( s) include the provisions described
in Paragraph 3(a)(ii) below, or alternatively (ii) to a new homeowners association (the ''New
Association") established for maintenance of the open space and thoroughfare median areas
in the Property, and that such transfer shall be provided for in the declaration of restrictions
(the ''New Declaration") for the New Association, and that such document( s) shall include
the provisions described in Paragraph 3(a)(ü) below. References below in this Agreement
to the "Association" shall include the New Association and "Declaration" shall include the
New Declaration if McMillin RHR elects to form a new homeowners association for the
Property.
(c) Transfer By MHOA. The MHOA shall have the right to transfer Maintenance
obligations to a sub-association ("SHOA") or to the owner of an apartment project
("Transferee"). Upon the MHOA's transfer of Maintenance obligations to a Transferee, (i)
the Transferee shall become obligated to perform the obligations so transferred, (ii) the MHOA
shall retain the right to perform the Maintenance should the Transferee fail to do so, and (iii)
the MHOA shall be released from the obligations so transferred subject to the City determining
that the requirements of Paragraph 4 below have been satisfied. Although it is possible that
Maintenance obligations might be transferred to an apartment owner, McMillin RHR does
not believe it is likely that Maintenance obligations will be transferred to an apartment owner.
3. Assienment bv McMillin RHR and Release of McMillin RHR
(a) Assignment. Upon McMillin RHR's transfer of the Maintenance obligations
to the MHOA, it is intended by the parties that the MHOA shall perform the Maintenance
obligations either itself or by contractors. Such transfer will release McMillin RHR from its
obligations only if all of the following occur:
(i) MHOA Accepts Obligation. The MHOA has unconditionally accepted
and assumed all of McMillin RHR's obligations under this Agreement io writing, such
assignment provides that the burden of this Agreement remains a covenant running
with the land, and the assignee expressly assumes the obligations of McMillin RHR
under this Agreement. The assignment shall also have been approved by the appropriate
governing body of the MHOA by resolution or similar procedural method and approved
as to fo= and content by the City Attorney. The City shall not unreasonablywithhold
its consent to such assignment.
(ii) MHOA's Declaration. The City has confirmed that there have been no
modifications to the recorded Declaration previously approved by City, to any of the
following provisions: the MHOA shall be responsible for the maintenance of the MHOA
Roflìng Hills Ranch I1
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Maintained Public Areas, the MHOA shall indemnify City for all claims, demands,
causes of action, liability or loss related to or arising from the maintenance activities,
and the MHOA shall not seek to be released by City from the maintenance obligations
of this Agreement, without the prior consent of City and one hundred percent (I 00%)
of the holders of first mortgages or owners of the Property.
(iii) MHOA InS1lfance. The MHOA procures and formally resolves to
maintain at its sole cost and expense, commencing no later than the City's release of
all of McMillin RHR's landscape maintenance bonds, a policy of public liability
insurance which at least meets the requirements of Section S.l (a) of the Master
Declaration which reads as follows:
(a) General Liability Insurance. The Master Association
shall obtain a comprehensive general liability and
property damage insurance policy insuring the Master
Association and the Owners against liability incident
to ownership or use of the Master Association Property.
The limits of such insurance shall not be less than
$3 Million covering all claims for death, personal injury
and property damage arising out of a single occurrence.
The insurer issuing such insurance shall have rating by
A.M. Best of" A, Class V" or better with no modified
occurrences and as admitted by Best's Insurance Guide.
Such insurance shall include the following additional
provisions provided they are available on a
commercially reasonable basis:
(i) The City of Chula Vista shall be named as an
additionally insured party to such insurance pursuant
to the City's requirements the Master Association do
so;
(ii) The policy shall not contain a cross-suit exclusion
clause which would abrogate coverage should litigation
ensue between insureds;
(iii) The policy shall contain the following severability
clause (or language which is substantially the same):
"The coverage shall apply separately to each insured
except with respect to the limits of liability."
This Section 5.1(a) may not be amended without the written consent
of the City Planning Director or City Attorney.
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The MHOA shall provide the City with a Certificate of Insurance upon acceptance
of the transfer of the Maintenance obligations herein.
(b) Release. When all conditions precedent in Paragraph 3(a) are fulfilled,
McMillin RHR shall be released ftom its obligations under this Agreement, including its security
and insurance requirements. McMillinRHR acknowledges that it has a contractual obligation
to perform the terms and conditions of this Agreement until and unless released by the City
ftom this Agreement. At least sixty (60) days prior to such transfer, McMillin RHR shall give
a notice to the City of McMillin RHR's intent to transfer its Maintenance obligations herein
and provide the City with the appropriate documents listed in Paragraph 3(a).
4. Assi!!nment bv MHOA and Release of MHOA.
(a) Assignment. Upon MHOA's transfer of the Maintenance obligations to a
Transferee, it is intended by the parties that the Transferee shall perform the Maintenance
obligations either itself or by contractors. Such transfer will release the MHOA ftom its
obligations only if all of the following occur:
(i) Transferee Accepts Obligation. The Transferee has unconditionally
accepted and assumed all of the MHOA's obligations under this Agreement in writing,
such assignment provides that the burden of this Agreement remains a covenant running
with the land, and the assignee expressly assumes the obligations of the MHOA under
this Agreement. If the Transferee is an SHOA, the assignment shall also have been
approved by the appropriate governing body of the SHOA by resolution or similar
procedural method and approved as to form and content by the City Attorney, The
City shall not unreasonably withhold its consent to such assignment.
(ii) SHOA's Declaration of Restrictions. If the Transferee is an SHOA, the
City has reviewed and approved the SHOA's recorded Declaration of Restrictions to
confirm that said document contains appropriate maintenance and insurance provisions,
(iii) SHOA Insurance. The Transferee procures and formally resolves to
Maintain at its sole cost and expense, a policy of public liability insurance which meets
the requirements set forth in Paragraph 3 (a) (ill) above. The SHOA shall provide
the City with a Certificate of Insurance upon acceptance of the transfer of the
Maintenance obligations herein.
(b) Release. When all conditions precedent in Paragraph 4(a) are fulfilled, the
MHOA shall be released ftom its obligations under this Agreement, including its security and
insurance requirements. At least sixty (60) days prior to such transfer, MHOA shall give notice
to the City of MHO A's intent to transfer its Maintenance obligations herein and provide the
City with the appropriate documents listed in Paragraph 4(a).
Rolling HUb Ranch II
Neighborhood IDA Grant ofEascmc:nts, etc.
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5. McMillin RHR's Insurance. Until such time as the MHOAhas obtained the general
liability insurance required by Section 5.1 (a) of the Declaration, McMillin RHR agrees to procure
and formally resolves to maintain at its sole cost and expense, commencing no later than the date that
the landscape architect of record has submitted a letter of substantial conformance pertaining to work
being completed to the General Services Department and the General Services Department Director
or his designee has deemed the work complete and satisfactory, a policy of public liability insurance
that would include, but is not limited to the following:
General Liability Insurance. McMillin RHR shall obtain a comprehensive general liability
and property damage insurance policy insuring McMillin RHR against liability incident to ownership
or use of the Property. The limits of such insurance shall not be less than $3 Million covering all
claims for death, personal injury and property damage arising out of a single occurrence. The insurer
issuing such insurance shall have rating by A.M. Best "A, Class V" or better with modified occurrences
and as admitted by Best's Insurance Guide. Such insurance shall include the following additional
provisions provided they are available on a commercially reasonable basis:
(i) The City ofChula Vista shall be named as an additionally insured party to such
insurance pursuant to the City's requirements McMillin RHR do so;
(ii) The policy shall not contain a cross-suit exclusion clause which would abrogate
coverage should litigation ensue between insureds and;
(iii) The policy shall contain the following severability clause (or language which
is substantially the same): "The coverage shall apply separately to each insured
except with respect to the limits of liability,"
McMillin RHR shall provide the City with a Certificate of Insurance upon procurement ofthe policy
as set forth above.
6. Indemnity, McMillin RHR shall defend, indemnify and hold harmless the City, its
officers, agents and employees, from any and all actions, suits, claims, damages to persons or property,
costs including attorney's fees, penalties, obligations, errors, omissions, demands, liability, or loss
of any sort (herein" claims or liabilities "), that may be asserted or claimed by any person, firm, or
entity because of or arising out of or in connection with the use, maintenance, orrepair of the MHOA
Maintained Public Areas, McMillin RHR shall not have any liability under this section by reason
of the Transferee's failure to maintain,
7. Indemnity If Transferee. The document whereby McMillin RHR transfers a
Maintenance obligation to a Transferee shall be signed by both McMillin RHR and the Transferee
and shall set forth an express assumption of Maintenance and other obligations hereunder and shall
include the following indemnification provision:
Indemnity. The Transferee shall defend, indemnify, and hold harmless the City, its
officers, agents and employees, from any and all actions, suits, claims, damages to
Rolling Hills Ranch II
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persons or property, costs including attorney's fees, penalties, obligations, errors,
omissions, demands, liability, or loss of any sort (herein "claims or liabilities"),which
result from the Transferee's failure to complywith the requirements of the obligations
transferred hereby to Transferee. Transferee shall not have any liability under this
Indemnity by reason of another party's failure to maintain. It is specifically intended
that the City shall have the right to enforce this Indemnity. This Indemnity may not
be amended without the written consent of the City Director of Planning and Building
or City Attorney.
8. Agreement Binding Upon Any Successive Parties. This Agreement shall be binding
upon McMillin RHR and any successive Declarant under the Declaration, This Agreement shall be
binding upon MHOA and any Transferees upon transfer of maintenance obligations to the MHOA
or Transferee, respectively, This Agreement shall inure to the benefit of the successors, assigns and
interests of the parties as to any or all of the Property.
9. Agreement Runs With the Land. The burden of the covenants contained in this
Agreement ("Burden") is for the benefit of the Property and the City, its successors and assigns, and
any successor-in-interest thereto. The City is deemed the beneficiary of such covenants for and in
its own right and for the purposes of protecting the interest of the community and other parties, public
or private, in whose favor and for whose benefit such covenants running with the land have been
provided, without regard to whether the City has been, remained or are owners of any particular land
or interest therein. If such covenants are breached, the City shall have the right to exercise all rights
and remedies and to maintain any actions or suits at law or in equity or other proper proceedings to
enforce the curing of such breach to which it or any other beneficiaries of this Agreement and the
covenants may be entitled.
IO. Governinl!: Law. This Agreement shall be governed and construed in accordance with
the laws of the State of California.
II. Effective Date. The te=s and conditions of this Agreement shall be effective as of
the date this Agreement is recorded in the Official Records of the San Diego County Recorder's Office.
12. Counterparts, This Agreement maybe executedinanynurnberofcounterparts, each
of which shall be original and all of which shall constitute one and the same document.
13. Recordinl!:. The parties shall cause this Agreement to be recorded in the Official Records
of the San Diego County Recorder's Office within thirty (30) days after this Agreement has been
approved by the City Council.
14. Miscellaneous Provisions.
(a) Notices. Unless otherwise provided in this Agreement or by law, any and all
notices required or permitted by this Agreement or by law to be served on or delivered to either
party shall be in writing and shall be deemed duly served, delivered and received when
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personally delivered to the party to whom it is directed or, in lieu thereof, when three (3)
business days have elapsed following deposit in the United States mail, certified orregistered
mail, return receipt requested, first-class postage prepaid, addressed to the address indicated
in this Agreement. A party may change such address for the purpose of this Paragraph by giving
written notice of such change to the other party.
If To City:
CITY OF CHULA VISTA
Department of Public Works/Engineering Division
276 Fourth Avenue
Chula Vista, CA 91910
Attn: City Engineer
If To McMillin RHR:
McMILLIN ROLLING HILLS RANCH, LLC
2727 Hoover Avenue
National City, California 91950
Attn: Project Manager
(b) Captions. Captions in this Agreement are inserted for convenience of reference
and do not define, describe or limit the scope or intent of this Agreement or any of its terms.
(c) Entire Agreement. This Agreement, together with any other written document
referred to herein, embody the entire agre=ent and understanding between the parties regarding
the subject matter hereof, and any and all prior or contemporaneous oral or written
representations, agreements, understandings and! or statements shall be of no force and effect.
This Agreement is not intended to supersede or amend any other agreement between the parties
unless expressly noted.
(d) Recitals; Exhibits. Any recitals set forth above and any attached exhibits are
incorporated by reference into this Agreement.
(e) Compliance With Laws. In the performance of its obligations under this
Agreement, McMillinRHR, its agents and employees, shall comply with any and all applicable
federal, state and local rules, regulations, ordinances, policies, permits and approvals,
(f) Authority of Signatories. Each signatory and party hereto hereby warrants
and represents to the other party that it has legal authority and capacity and direction from
its principal to enter into this Agreement, and that all resolutions and!or other actions have
been taken so as to enable said signatory to enter into this Agreement.
Rolling Hills Ranr:h II
Neighborhood lOA Grant of Eascmr:nts, etc.
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(g) Modification. This Agreement may not be modified, terminated orrescinded,
in whole or in part, except by written instrument duly executed and acknowledged by the parties
hereto, their successors or assigns, and duly recorded in the Official Records of the San Diego
County Recorder's Office.
(h) Severability. If any term, covenant or condition of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term, covenant
or condition to person or circumstance, shall not be affected thereby and each term, covenant
or condition shall be valid and be enforced to the fullest extent permitted by law.
(i) Preparation of Agreement. No inference, asS1lmption or presumption shall
be drawn from the fact that a party or its attorney prepared and/or drafted this Agreement.
It shall be conclusively presumed that both parties participated equally in the preparation and/or
drafting of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year fIrst set forth above.
CITY OF CHULA VISTA, a municipal corporation
By:
Stephen C. Padilla, Mayor
Attest:
Susan Bigelow, City Clerk
APPROVED AS TO FORM:
By:
Ann Moore, City Attorney
Rolling Hills Ral1ch If
Neighborhood lOA Grant of Easements, etc.
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McMILLIN ROLLING HILLS RANCH, LLC, a
Delaware limited liability company
By: McMillin Management Services, L.P.
a California limited partnership, Manager
By:
STATE OF CALIFORi'ITA
)
) ss.
)
lS~ .A1Þ-ckd~
COUNTY OF SAN DIEGO
On ,200_, before me,
Notary Public in and for said State, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in hislher/their authorized capacity(ies), and that by hislher/their signature(s) on
the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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Â\\.
McMillin 1~IJ£~II"12m~'y'elopment
DRAFT
}
STATE OF CALIFORNIA }ss.
COUNTY OF SAN DIEGO }
On Mav 2. 2005 . before me, Brenda N. Henderson, Notary Public
personally appeared Tom Tomlinson and Todd Galarneau, personally known to me to be the
persons whose names are subscribed to the within instrument and acknowledged to me that
they executed the same in their authorized capacities, and that by their signatures on the
instrument the persons or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
Signature ØA¿Itd~ 1l1f£r~
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This area for offtda! notarial sea!
McMillin Rolling Hills Ranch Grant of Easement, License and Maintenance Agreement Chula Vista
Tract No. 92-02A Neighborhood 10A
..\\..\\. ..\\. ..\\. Â\.
McMillin Realty McMillin Mortgag~ McMillin Land Development McMillin Homes McMillin Commercial
Corporate Office .. 2727 Hoover Avenue e National City, CA 9i%5õ4.7 Tel (619) 477-4117 . Fax (619) 336-3112 . www.mcmiIJin.com
DRAFT
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
On ,200_, before me,
Notary Public in and for said State, personally appeared
,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by hislher/their signature(s) on
the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature
(Seal)
Rolling Hills Ranch II
Neighborhood IDA Grant of Easements, etc.
Grant.Easmu.Maint.Agr.1 OA.29marOS. wpd
-11-
3/29/05
3-48
EXHIBIT" A"
Legal Description
Lots through , inclusive, of Chula Vista Tract No. 92-02A
- -
Rolling Hills Ranch Subarea illN eighborhood IDA, in the City ofChula
Vista, County of San Diego, State of California, according to Map
thereofNo. , filed in the Office of the County Recorder
of San Diego County, , 200_,
Rolling Hills Ranch I[
Neighborhood IDA Grant of Easements, etc.
Grant.Easmts.Maint.Agr.l OA.29marQS .wpd
3-49
DRAFT
3/29/05
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DRAFT
EXHIBIT nC"
Maintenance Responsibilities
City of Chula Vista
Area HOA Maintenance Maintenance
Parkways within those Landscaping in the parkways Maintenance of curb, gutter,
portions of those public road including irrigation, trimming sidewalks and pavement.
shown on Exhibit "B," and pruning of trees, and
maintenance and irrigation of
turf areas.
RolIi1lg Hills Rarzch II
Neighborhood IDA Grant of Easements, etc.
Grant.Easmts.Maint.Agr.lOA.29marllS.wpd
3n9/0S
3-51
COUNCIL AGENDA STATEMENT
Item:
Meeting Date:
4
05/17/05
ITEM TITLE:
Resolution approving the first amendment to the agreement
with Erickson-Hall Construction Co. to incorporate the Guaranteed
Maximum Price (GMP) for the design and construction of Harborside
Park (CIP PR249) located on Oxford Street in Western Chula Vista,
authorizing the Mayor to execute said amendment and authorizing the
transfer of funds from the "Western Chula Vista Infrastructure Program
(GG188)" to the ''Harborside Park (PR249)" as necessary to complete the
proj ect.
Director of General services(j ~ ,
City Manager tJ
(4/5ths Vote: Yes.1L No'--:¡
SUBMITTED BY:
REVIEWED BY:
The City Council previously approved CIP project No. PR249 and the Master Plan for
Harborside Park, which conceptually designed and provided for the construction of a completed
and fully functional 5,21-acre park. On October 5, 2004 Council approved a Design Build
Agreement with Erickson-Hall Construction Co. for this park. The Design Build Agreement
contained a not to exceed price of $1,554,224 with the GMP to be set upon receipt of 90%
construction drawings. The project is nearing the end of the design phase and ready to start the
construction phase this month. Tonight's resolution will approve the first amendment that will
set the Guaranteed Maximum Price (GMP) at $1,987,030.
RECOMMENDATION:
That the City Council approve the first amendment of the Design Build Agreement incorporating
the GMP at $1,987,030 for the services required to design and construct Harborside Park (CIP
PR249) located on Oxford Street in Western Chula Vista, appropriating funds therefore and
authorizing the Mayor to execute said amendment.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable,
BACKGROUND:
On October 5, 2004 City Council approved an agreement with Erickson-Hall Construction Co.
by Resolution 2004-317 for the services required to design and construct a completed and fully
functional 5.21-acre, Harborside Park. As part of that agreement, a Guaranteed Maximum Price
(GMP) is to be established at 90% construction documents, which would include, but not be
limited to, the cost for all labor, equipment, and material to design and build a fully functional
park in accordance with all applicable building codes. A not to exceed amount of $1,554,224
million for the Park was established, based UpOJ1"'tough schematic drawings, in the Design Build
agreement. As the design progressed and some of the complexities of this project became
known, the actual GMP as determined at the 90% construction drawing stage exceeded the not to
exceed amount in the original agreement.
4-1
Page 2, Item:
Meeting Date:
if
05/17/05
PROJECT SCOPE AND CONTRACTUAL REOUIREMENTS
The Design-Build Agreement with Erickson-Hall Construction Co. provides the City with a fully
functional Harborside Park including the facilities and site-work required to provide park service
to residents of that community as well as other residents of the City.
The First Amendment (Exhibit A) to the Design Build Agreement between the City of Chula
Vista and Erickson-Hall Construction Co, will include setting the GMP at $1,987,030 which
includes the revised Design Fees and General Conditions costs consistent with the Project cost
(Attachment I) and revise the statement for Substantial and Final Completion dates. The GMP
shall include all design and construction services to complete a fully functional park. The GMP
is higher than the not to exceed amount in the original agreement due to the process of refining
the various project elements. Staff has made every effort in value engineering the project and
concurs with the Design Builder's GMP amount.
The Substantial and Final completion dates will be amended to include actual dates in lieu of
number of calendar dates crom Notice to Proceed as in the Original Agreement. The revised
Substantial Completion date is November IS, 200S and the revised Final Completion date is
December IS, 2005.
The total cost of the project and GMP exceed the amount set forth in the Design Build
Agreement as the amount not to exceed cost of the project. At the time of the Design Build
Agreement, staff recommended an amount not to exceed that was less than the total budgeted
cost of the project. This is commonly done, as the costs of the project that are estimated at the
master plan level rarely remain consistent through the design process. By establishing a less than
budgeted amount not to exceed, staff is better able to focus the design builder on designing a
project that remains within our budgetary constraints. Staff felt it prudent at that time to
establish a conservative cost of the project and be able to respond to unexpected changes in
material costs. The final design of the project remains consistent with the adopted master plan.
CHANGE ORDERS
Under the designlbuild process, change orders are handled differently than under the
designlbidlbuild process. Change orders are only returned for Council approval if they exceed
the approved GMP, or are for additional work requested by City, which results in a significant
change to the original scope. Otherwise, change orders are reviewed/approved by staff and the
design builder. This practice is commonplace when using the designlbuild construction
technique,
FINANCING
Harborside Park is part of the Western Chula Vista Incrastructure Financing Program. This is a
program that Council adopted with the Fiscal Year 2003/04 Capital Improvement Program
Budget. The Financing Program was made up of two financing elements. The first of these was
the borrowing of $9 million that would be repaid through funds generated by the Residential
Construction Tax. The second element of the financing program was a loan crom the US
Department of Housing and Urban Development (Section 108 Loan).
4-2
Page 3, Item:
Meeting Date:
"
4
05/17/05
The RCT funded portion of the fmancing has already been undertaken and the funds are now
available to move forward on those projects. On the other hand, the Section 108 Loan has not
yet been finalized as the City continues to work with the US Department of Housing and Urban
Development on CDBG related issues.
Harborside Park is included in the Section 108 Loan portion of the program and would be
required to be deferred until those financing issues are completed. The Eucalyptus Park
Reconstruction is split funded between both of the funding sources. There are sufficient funds
within the RCT funded portion of Eucalyptus Park to move forward with the design of the
proj ect while still allowing Harborside Park to continue moving forward through design and
construction. Once the Section 108 Loan proceeds are received, the funds programmed for
Harborside Park would be re-programmed for Eucalyptus Park. This re-programming of funds
should not adversely affect the schedule of Eucalyptus Park, as it cannot move forward to
construction until the Section 108 Loan funds are received.
Staff has discussed this re-programming of funds with respect to the RCT funded portion with
Bond Counsel and our financial consultants and have been informed that such a modification
would be acceptable as the basic goal of providing park facilities in the western portion of the
City would still be in place. At this time, staff is recommending transferring the amount of
$1,820,914 from the "Western Chula Vista Infrastructure Program (GGl88)" to the "Harborside
Park (PR249)" as necessary to complete the project.
FISCAL IMPACT:
PROJECT COSTS
GMP $1,987,030
City Staff Costs, Consultant and Oversight (inc!. Special Inspections) $140,000
City Contingency $20,000
FF&E $5,000
TOTAL PROJECT COSTS $2,152,030
PROJECT FUNDS
Existing Appropriation $331,116
Transfer Request:
From "Western Chula Vista Infrastructure Program (GGl88)" $1,820,914
TOTAL PROJECT FUNDS $2,152,030
Erickson-Hall Construction Co. has requested the GMP be set at $1,987,030. The GMP
includes, but is not limited to, design services, general conditions, insurance, bonds, construction
management, the cost for all labor, equipment, and material to design and build a fully functional
park in accordance with all applicable building codes. The total project cost is $2, 152,030.
Approval of tonight's resolution will approve the first amendment to the agreement with
Erickson-Hall Construction Co. to incorporate the Guaranteed Maximum Price (GMP) for the
design and construction of Harborside Park (CIP PR249) located on Oxford Street in Western
Chula Vista, authorize the Mayor to execute said amendment and authorize the transfer of funds
in the amount of$I,820,914 from the "Western Chula Vista Infrastructure Program (GGI88)" to
the "Harborside Park (PR249)" as necessary to complete the project.
4-3
Page 4, Item:
Meeting Date:
4
05/17/05
After completion, Public Works Operations will acquire an annual on-going cost for the park of
$46,080.
Attachment I - Revised Exhibit 2, Design Build Fee Structure
Exhibit A - First Amendment to the Design Build Agreement
M:\GeneraJ Services\GS Administration\Counci] Agenda\Harborside Park\harborside GMP AiB.doc
4-4
Attachment 1
Preliminary Cost of Construction
Harborside Park
Harborside Park - GMP Construction Costs GMP
1. GMP budget - hard cost $ 1,531,093
2. Gensral Conditions - 5 Months $ 100,000
3. Subtotal - Hard Construction Costs $ 1,631,093
4 Design/Builders Fee - sliding scale
Fee on first $1 ,000,000 of construction cost $ 100,000
Fee on next $500,000 over $1 ,000,000 - 6% $ 30,000
Fee on next $500,000 over $1,500,000 - 5 1/2% $ 7,210
5. Total - GMP Cost of Construction $ 1,768,303
Design and Pre-Construction Fees:
6 Preconstruction Services for Design/Buiider - sliding scale
Preconstruction fee on first $1 ,000,000 of construction cost $ 20,000
Preconstruction fee on construction cost over $1 mil. - 3/4% $ 5,762
7, AlE Design Fees
Landscape Design / Construction Documents $ 30,000
Site Structures / Site Improvements $ 17,000
Civii Engineering $ 15,700
8. AlE Construction Administration $ 4,500
9 Tapa Survey NA
10 Hydrology and SWPPP $ 6,500
11 Storm Water Mgmt Plan - not required $
12, Off-site engineering / design - not required $
13 Reimbursables $ 15,000
Total GMP Design & Build Cost $ 1,882,765
14. Cost of bond premium - sliding scaie
First $500,000 - $1200 per 1,000 $ 6,000
Premium over $500,000 - $8.00 per 1,000 $ 11,062
15. Insurance $ 5,648
16, Building/UWity/Site Fees (by owner) $
17. City staffing I Inspections (by owner) $
18 Project contingency @ 5% $ 81,555
Total GMP Project Cost $ 1,987,030
Design Fees, Pre-Construction Fees and GC Summary:
General Conditions (line item 2 above) $ 100,000
Design and Pre-Construction Fees (line items 6-11 above) $ 114.462
Total Design Fees, Pre-Canst. Fees and General Conditions $ 214,462
EricksonaHall Construction Co.
4-5
DRAFT
RESOLUTION 2005-
RESOLUTION APPROVING THE FIRST AMENDMENT TO THE
AGREEMENT WITH ERICKSON-HALL CONSTRUCTION CO, TO
INCORPORATE THE GUARANTEED MAXIMUM PRICE (GMP) FOR THE
DESIGN AND CONSTRUCTION OF HARBORSIDE PARK (CIP PR249)
LOCATED ON OXFORD STREET IN WESTERN CHULA VISTA,
AUTHORIZING THE MAYOR TO EXECUTE SAID AMENDMENT AND
AUTHORIZING THE TRANSFER OF FUNDS FROM THE "WESTERN
CHULA VISTA INFRASTRUCTURE PROGRAM (GGl88)" TO THE
"HARBORSIDE PARK (PR249)" AS NECESSARY TO COMPLETE THE
PROJECT.
WHEREAS, the City Council previously approved CIP project No. PR249 and the
Master Plan for Harbroside Park, which conceptually designed and provided for the construction
of a cornpleted and fully functional park; and
WHEREAS, on October IS, 2004, City Council approved a Design Build Agreement
with Erickson-Hall Construction Co. for this park; and
WHEREAS, a not to exceed amount of $1,554,224 million for the Park was established,
based upon rough schematic drawings, in the Design Build agreement; and
WHEREAS, as the design progressed and some of the complexities of this project
became known, the actual GMP as determined at the 90% construction drawing stage exceeded
the not to exceed amount in the original agreement; and
WHEREAS, Erickson-Hall Construction Co. has requested the GMP be set at
$1,987,030; and,
WHEREAS, the GMP includes, but is not limited to, design services, general conditions,
insurance, bonds, construction management, the cost for all labor, equipment, and material to
design and build a fully functional park and recreation center in accordance with all applicable
building codes; and
WHEREAS, a previous appropriation of $1,942,707 was approved by Council thru the
FY 03-04 Budget Process; and
WHEREAS, Harborside Park is part of the Western Chula Vista Infrastructure Financing
Program. This is a program that Council adopted with the Fiscal Year 2003/04 Capital
Improvement Program Budget; and
WHEREAS, staff is recommending transferring the amount of $1,820,9l4 from the
"Western Chula Vista Infrastructure Program (GGI88)" to the ''Harborside Park (PR249)" as
necessary to complete the project; and
4-6
DRAFT
WHEREAS, the reprogramming of bond proceeds to fund the èonstruction of Harborside
Park is consistent with the spending requirements for the funds - providing facilities in Western
Chula Vista.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby approve the First Amendment to the Design Build Agreement incorporating
the GMP at $1,987,030 for the services required to design and construct Harborside Park (CIP
PR249) located on Oxford Street in Western Chula Vista, transferring funds therefore and
authorizing the Mayor to execute said amendment.
Presented by
Approved as to form by
~úJ1rMl
Jack Griffin,
Director of General Services
M:\General Services\GS Administration\Council Agenda\Montevalle Corrununity Park DB Al13\GMP Reso l.doc
4-7
DRAFT
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
~~~/)uP.
City Attorney
Dated:
First Amendment to the Agreement with
Erickson-Hall Construction, Co. to incorporate
GMP for the design and construction of Harborside Park
4-8
DRAFT
First Amendment To
the Design Build Agreement between the City of Chula Vista
and Erickson-Hall Construction Co.
For Design and Construction of Harborside Park
This First Amendment is made and entered into this 17th day of May, 2005 by and between the
City of Chula Vista (herein "City"), a municipal corporation, and Erickson-Hall Construction
Co. (herein "Design Builder or DIE"). City and Design Builder are sometimes hereinafter
referred to as Parties ("Parties")
RECITALS
WHEREAS, the City and DIE entered into an agreement ("Original Agreement") dated October
5, 2004 and approved by City Council Resolution 2004-317, whereby DIE provides design and
construction services to the City for the construction of a fully functional park including the
facilities and site-work; and
WHEREAS, the Original Agreement contained a guaranteed maximum price not to exceed
amount of $1,5 54,224 million; and
WHEREAS, as the design progressed and some of the complexities of this project became
known, the actual GMP as determined at the 90% construction drawing stage exceeded the not to
exceed amount in the Original Agreement; and
WHEREAS, DIE and City staff have value engineered the project to provide the best product at
the most effective price; and
WHEREAS, the parties now desire to amend the Original Agreement to increase the contract
amount to incorporate the guaranteed maximum price of $1,987,030 for a fully functional 5.21-
acre park, Harborside Park.
NOW, THEREFORE, in consideration of the recitals and the mutual obligation of the Parties set
forth herein, the City and Design Builder agree as follows:
I, Section I of Original Agreement, entitled General Scope of Work to be Performed by
DIE, is hereby amended as follows:
1.3.1 Perform all services, work and obligations as described herein for the not
to exceed amount of $1,554,221 $1,987,030 which shall include Design
Services and General Conditions necessary to provide a fully completed
and functional Project. DIE shall perform all Design Services and General
Conditions for the not to exceed amount of$217,335 $214,462 as outlined
in the Design Build Fee Structure (Exhibit 2). At 90% complete
construction documents a Guaranteed Maximum Price (GMP) will be
4-9
DRAFT
established pursuant to Section 13 of this Agreement, which will include,
but not be limited to, the cost for all labor, equipment, and material to
design and build a fully functional park in accordance with all applicable
rules, regulations, and laws. The D/B fee shall be based upon a sliding
scale as outlined in the Design Build Fee Structure (Exhibit 2), Any costs
incurred by D/B in excess of said GMP shall be the sole responsibility of
the D/B, unless a change order is approved by the City pursuant to
Sections 9 and 14 of this agreement. All funds remaining in the GMP at
the completion of the project shall belong to the City,
1.3.2 Substantial Completion:
Achieve "Substantial Completion" (as defined in §16.1) no later than
250 calendar àays fTom issuance of Notice to Proceed at execution of
/.greemont November 15, 2005.
1.3,3 Achieve "Final Completion" (as defined in §16.2) No later than ;¡gq
calendar àays fTom issuance of Notice to Prooeed at execution of
/I.greement December 15, 2005.
2, Section 13 of the Original Agreement, entitled D/B GMP for Services and
Reimbursements, is hereby amended to read as follows:
13,1.1 The GMP shall not exceed $1,551,221 $1,987,030 for the Park and
include within said GMP shall be no more than $217,335 $214,462 for
Design Services and General Conditions as previously identified in
Section 1.3.1 of this agreement.
13.2 Except as otherwise expressly provided in this Agreement, as full and complete
compensation for perfo=ance of all services and obligations under this Agreement,
D/B shall be compensated ("D/B GMP") by a sum to be determined at 90%
construction documents. GMP shall include the not to exceed amount of $100,000
for General Conditions and $117,335 $114,462 for Design Services for a total of
$217,335 $214,462. Said $217,335 $214,462 for General Conditions and Design
Services shall not be exceeded unless additional services are requested pursuant to § 7
above or a change order issued pursuant to § 14. Unless otherwise expressly
provided in this Agreement, D/B GMP shall include full compensation for all costs of
any type incurred by D/B in performing all services and obligations under this
Agreement, including but not limited to the following:
3. Section 11 of the Original Agreement, entitled Insurance, is hereby amended to read
as follows:
11.3,1.5 Builder's Risk Propertv Insurance:
The City of Chula Vista will provide coverage for "all risk" Builder's Risk Insurance,
excluding the peril of earthquake, and subject to other policy terms, conditions and
4-10
DRAFT
exclusions, Coverage will be provided for the Full Hard Cost Replacement Cost of
Materials, Equipment and fixtures destined to become a p=anent part of the
structure, Property in Transit, and Property in Offsite Storage for Harborside Park
construction in an amount not to exceed $+.+ $I,9 million. Contractors and
Subcontractors will be added to policy as Loss Payees as their interest may appear.
11.4.1.5
Builder's Risk $1.7 M:illioB
N/A
Hard Construction Cost of
Structure
4, Exhibit 2 of the Original Agreement shall be substituted with the Revised Exhibit 2,
5. Except as expressly provided herein all other provisions of the Original Agreement
shall remain in full force and affect.
4-11
Signature Page to the First Amendment to
the Design Build Agreement between the City of Chula Vista
and Erickson-Hall Construction Co.
For Design and Construction of Harbors ide Park
City of Chula Vista
Erickson-HaJl Construction Co.
by
Stephen C. Padilla, Mayor
by
Name and Title
Date
A TrEST:
Susan Bigelow, City Clerk
Approved in form by:
Ann Moore, City Attorney
M:\Gcllcral ScrviccslGS AdJniuislrnllon\Counc.il Agcnda\Harborsidc Pllrk'Mln HI1\vk Amcndment IInd SI¡:nll.lurc Pose doc
4-12
DRAFT
¡chael F. HolI
Chief Operatinn C:iicf7r
Ef.c~ßQli.·}!a!1 CO;:SU'!.;C:::...1 Co.
COUNCIL AGENDA STATEMENT
,-
Item
Meeting Date
")
5/17/05
ITEM TITLE:
Resolution declaring City's intention to increase sewer service
charges and setting a Public Hearing to consider said increase for July 12, 200S
at 6:00 p.m..
SUBMITTED BY:
City Engineer 5Pr
City Mana~
(4/5ths Vote: Yes _ No..xJ
REVIEWED BY:
The Sewer Service Charge is paid by all users who are connected to the City's wastewater collection
system. Revenues derived from this fee are used to fund the cost of wastewater treatment, system
maintenance and operation.
On July 22, 2003, the City Council approved a new sewer service rate structure and a four-year rate
plan for Fiscal Year 2003/04 through Fiscal Year 2006/07. The new rate structure primarily changed
the billing method for single-family residential users from a flat-fee structure to a consumption-based
structure utilizing the customers' winter water usage "winter average" as the basis of the rate.
Upon the adoption of the new rate structure, there were early indications that the adopted rate
structure was not meeting the revenue objective at that time. Based on the findings of a follow-up
study, it was determined that over the long term the existing rates would not generate the revenues
needed to meet the obligations of the fund (i.e. for wastewater treatment and system operation and
maintenance), therefore the rates needed to be adjusted and in some cases increased.
RECOMMENDATION: That City Council approve a resolution declaring the City's intention to
increase sewer service charges and setting a Public Hearing to consider said increase for July 12,
200S at 6:00 p.m.
BOARDS I COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Sewer Service Charee Uodate
On June 3, 2003, the City Council accepted the "Wastewater User And Rate Restructuring Studyn
prepared by Post, Buckley, Schuh & Jernigan, Inc. ("PBS&J"), and shortly afterwards on July 22,
2003, approved a new sewer service rate structure and a four-year rate plan for FY 2003/04 through
FY2006/07.
S-I
Page 2, Item 5
Meeting Date 5/17/05
Upon the adoption of the new rate structure, some residents expressed concerns regarding the use of
winter averaging as the basis of consumption-based billing. In addition, there were early indications
that the adopted rate structure was not meeting the revenue objective at that time. Consequently, the
City retained a new consultant (Black & Veatch) to prepare an update to the PBS&J Study to address
the concerns of the residents and to bring recommendations to Council for the resolution of these
issues. Based on the findings of that study, it was determined that although the adopted rate structure
was not generating the expected revenues, the City's planned expenditures, which formed the basis of
the revenue requirement and the adopted rates, was also significantly reduced (albeit temporarily).
Consequently, the City decided to implement an appeal process as a way of addressing the concerns
of those residents who had an issue with the billing methodology. Furthermore, since the revenues
and expenditures were mostly on par for that fiscal year, it was decided that the City would use the
adopted rate plan for another year; however, staff was directed to prepare another update in fiscal
year 200S.
This year, with the re-structuring of Black & Veatch, the same project team moved to Camp Dresser
& McKee Inc. (CDM). Therefore, CDM was hired/retained to update the rates. The primary goal of
this update was to achieve the following objectives:
1. Re-evaluate the performance of the adopted rate plan and its ability to meet the revenue
requirements.
2. Re-evaluate the cost allocation amongst the vanous user classes to ensure that it was
proportional and equitable,
3. Re-evaluate the sewer-billing cap established for the billing of single-family residential
customers.
4. Develop a financial plan, which returns the Sewer Service Revenue Fund to self-sufficiency,
so that planned transfers from the Trunk Sewer Capital Reserve Funds would no longer be
necessary. Since Trunk Sewer Funds are now needed in the near-term to fund the acquisition
of additional treatment capacity rights.
Findings and recommendations
. Existing Rates
It was determined that beyond this Fiscal Year, the existing rates would not generate the
revenues needed to meet the obligations of the fund (i.e. for wastewater treatment and system
operation and maintenance), therefore the rates needed to be adjusted and in some cases
increased. A new rate plan (shown in Exhibit C) is being proposed.
. Cost Allocation
CDM developed a revenue plan, which includes refinements to the cost allocation amongst
the various user classes based on strength and quantity of flow discharged. The attached
6~ 1---
.-
Page 3, Item ~j
Meeting Date 5/17/05
Exhibit D shows the existing cost allocation and the proposed re-allocation. Adoption of
CDM's recommendation will make the rate structure even more equitable.
. Billable Flows - "Winter Usage Cap"
A previous analysis of the City's sewer customer billing data indicated that the City's current
approach of billing single-family residential customers based on the lowest two months of
water usage during the winter period is a fair and equitable method. This method is the most
fair and equitable approach and is used by a majority of large utilities in the United States.
However, the analysis found that with a billing cap of 15 Hundred Cubic Feet (RCF) of water
per month, which was set to avoid potentially charging high irrigation flows, wastewater
flows to Metro exceeded billable flows. The result is that the City currently incurs cost to treat
more flow than it bills. To remedy this discrepancy, a further analysis was conducted as part
of this study and it is recommended that the billing cap be raised to 20 HCF per month. Since
this past year was a very wet winter, the data used in the implementation of this cap, would
particularly be applicable this year. The approval of this recommendation would generate an
additional $617,000 annually.
. Trunk Sewer Capital Reserve Fund Transfers
The Trunk Sewer Capital Reserve, which was established in 1985, is funded through the
collection of "capacity fees" from new connections to the City's sewer collection system. The
fee which was recently adjusted to $3,478/Equivalent Dwelling Unit (EDU), is a "buy-in" fee,
which is charged to new users to use the collection system and the Metro capacity, which
existing users have been funding since the City first entered into the agreement with Metro
and acquired capacity rights. Revenue from this fee has averaged $6 million annually.
The transfer of funds from the Trunk Sewer Capital Reserve Fund to the Sewer Service
Revenue Fund is consistent with provisions of the Municipal Code that allow funds to be used
for the construction or enlargement of sewer facilities to enhance or increase capacity. With
the demands of population growth, sewer capacity requirements continually increase and are
being addressed by the City of San Diego's ongoing expansion of the Metro system.
To finance these new capital facilities, all system participants, including Chula Vista, incur a
portion of the debt service, which is included annually in Chula Vista's payment to San Diego
Metro.
However, since the City is now faced with the issue of acquiring additional treatment rights,
the revenue plan, which analyzed the cash flow in the Trunk Sewer Capital Reserve Fund,
determined that it was now necessary to stop the transfers so that the fund could accrue the
necessary reserves that would be needed to make the purchase. This is a major component of
the strategy currently being pursued by the City to acquire additional treatment capacity
rights. This refinement of the adopted revenue plan will reduce the previously approved
transfer amount for FY05/06 from $5.5 million to $4.3 million and end all future transfers.
S-3
Page 4, Item 5
Meeting Date 5/17/05
The approval of this recommendation will increase the Trunk Sewer Capital Reserve Fund
balance by $7.7 million.
Sewer Facility Reulacement Costs
The sewer facilities replacement component of the sewer service fee was established to guarantee
funds were available to pay for the annual cost of rehabilitation and/or replacement of structurally
deficient sewer facilities. This goal is achieved through the implementation of a comprehensive sewer
rehabilitation program.
Sewer Rehabilitation Program
The Sewer Rehabilitation Program is an annual $300,000/yr program, which involves the relining or
replacement of aging pipelines within the City's wastewater collection system. This program has so
far been driven by the information gathered through a limited video monitoring program. City crews
using a special vehicle equipped with video cameras televise and evaluate the conditions of various
lines within the collection system. Using data gathered through this process, a priority list is
developed of locations that need to be rehabilitated. Subsequently, these lines are improved as part of
an annual Capital Improvement Project which the City funds every year.
However, when the program was evaluated as part of the Wastewater Master Plan Update, the
following findings and recommendations were made:
1. The City's current video monitoring program was deemed to be inadequate since it was very
limited. It was determined that the City needed to implement a broader Citywide Video
Monitoring program to ensure that at a minimum 200,000 linear feet of sewer lines were
videotaped annually. This will in turn help in identifying locations that need to be improved.
This recommendation was approved by Council a few months ago, and since then the City has
acquired another vehicle, and also begun the process of hiring additional staff to enhance the
program.
2. The study also recommended that the annual rehabilitation budget be increased from
$300,000 to $900,000 over the next 5-years. This level of funding is needed to ensure that the
appropriate amount of rehabilitation is done. Because if the lines are not rehabilitated in a
timely manner, they would then need to be completely replaced, which becomes a much more
significant expense.
3. It was further determined that at the current level, the Sewer Facilities Replacement
allocation, which funds these activities, would not generate the amount of revenue required to
fund this new level of rehabilitation program, hence the need for a sewer service fee
adjustment.
5>9'
,....
Page 5, Item J
Meeting Date 5/17/05
Cost Re-evaluation - Basis of Cost Allocation
Based on the age of the existing sewer infrastructure and assumed useful life of 80 years, a 20-year
CIP was developed. The CIP included estimated costs for replacement and rehabilitation of all pipes
constructed before 1940. The CIP assumed that 20% of these older pipes will be replaced and the
remaining 80% would be rehabilitated (see Exhibit A).
The estimated 20-year cost for the replacement and rehabilitation program is approximately $41
million. Annual budgets included in the CIP for the initial 10-year period are $300,000 in year I,
$500,000 in year 2, and approximately $900,000 for the remaining years in Phase I and Phase 2. For
reference, the City has historically allocated approximately $300,000 per year for sewer rehabilitation
and replacement projects.
Cost Determination
Using the projected CIP expenditures for the next 5-years, and the flow projections, the cost was
allocated to each user class based on the projected amount of flow generated by that user class. The
analysis is shown in greater detail in the attached Exhibit B. Since sewer facility replacement costs
are collected as part of the monthly sewer service fee, a 5-year average was derived for easier
implementation/integration. To summarize, it is recommended that the fee be amended as follows: for
single-family residential users the fee will be increased from $0.70 to $1.97 monthly; and for multi-
family/non-residential users the fee will be increased from $0.06 to $0.11 per HCF (see Table 2
below).
Table 2
Proposed Replacement CostslFees
User Class Current FYE 06 FYE 07 FYE 08 FYE 09 FYE 10
Single-Family Flat Rate $0.70 $1.97 $1.97 $1.97 $1.97 $1.97
Multi-Family Variable Rate per HCF $0.06 $0.11 $0.11 $0.11 $0.11 $0.11
Commercial Variable Rate per HCF $0.06 $0.11 $0.11 $0.1 I $0.11 $0.11
General Rate Impacts
The current Rate Plan, which was adopted in July 2003, for FY04 through FY 07, represented an
overall annual increase of 9% in the revenue requirement. The proposed Rate Plan, for consideration
in July, represents an overall annual increase of only 7.5 % in the revenue requirement - which is less
than the adopted plan. Exhibit D shows the impact of this adjustment to the average single-family
residential user.
ss-
Page 6, Item 5
Meeting Date 5/17/05
Environmental Impact
The Environmental Review Coordinator has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project"
as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section
I 5060(93) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental
review is necessary.
FISCAL IMPACT:
If the City Council approves the proposed sewer rate adjustments and increase it will ensure that the
City recovers sufficient revenues to meet projected fund expenditures for Fiscal Years 2005/2006
through 2009/1 O. This fee adjustment will increase the fund revenues by approximately $25,600,000,
over the next 5 years. The Sewer Service Revenue Fund currently has an unappropriated balance of
approximately $1.5 Million Dollars.
Furthermore, approval of the proposed sewer facility replacement allocation will ensure that the City
also recovers sufficient revenues to meet proj ected Sewer Rehabilitation Program expenditures for
Fiscal Years 2005/2006 through 2009/10. This fee adjustment will increase the fund revenues by
approximately $3.7 Million, over the next 5 years. The Sewer Facility Replacement Fund currently
has an unappropriated balance of approximately $2.8 Million Dollars.
Attachments
Exhibit A - Sewer Facility Replacement Fund - Proposed CIP Expenditures
Exhibit B - Sewer Facility Replacement Fee Determination
Exhibit C - Existing and Proposed Rate Schedules
Exhibit D - Existing and Proposed Cost of Service Allocation
Exhibit E - Rate Impacts - Single-Family Residential Customers
Exhibit F - Cost of Service and Rate Study For Sewer Services
J :\Engineer\AGENDA \CAS2005\5~ 17 -05\A 113-Sewer-Service-Charge-Adjustment.ac.doc
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$6.000.000
$4.000.000
$2,000,000
$2,000,000
$1,800.000
$1.600.000
$1,400.000
$1,200,000
$1.000,000
$800,000
$600,000
$400,000
$200,000
EXHIBIT C
$0
1
I
I
._-,
I
I
---------------. -- ..---- -
--~---
I
,
.-._- -- .---- -----.--------¡
,
I
I
,
Single Family
Multi-Family
III Cost of SeNiee
. Revenue Under Existing Rates
o Revenue Under Proposed Rates
-.----
$0
Mobile Homes
Commercial (L)
Commercial (M)
Commercial (H)
Special Users
HI Cost of Service . Revenue Under Existing Rates 0 Revenue Under Proposed Rates
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EXHIBIT E
COMPARISON OF TYPICAL SFR MONTHLY SEWER BILLS
FY 2006
FY 2006 Adopted FY 2006 FY 2007 FY 2008 FY 2009 FY2010
Existing Adopted Rate wi $1.97 Proposed Proposed Proposed Proposed Propœed
~ ßo!< ßo!< ~ E.iJ< Rate ßo!< E.iJ< R.te
hcfìmo. $ $ $ $ $ $ $ $
0 7.20 7.45 8.72 8.47 8.47 9.00 9.25 9.75
I 9.19 9.60 10.87 10.63 10.83 11.53 11.87 12.45
2 11.18 11.75 13.02 12.79 13.19 14.06 14.49 15.15
3 13.17 13.90 15.17 14.95 15.55 16.59 17.11 17.85
4 15.16 16.05 17.32 17.11 17.91 19.12 19.73 20.55
5 17.15 18.20 19.47 19.27 20.27 21.65 22.35 23.25
6 19.14 20.35 21.62 21.43 22.63 24.18 24.97 25.95
7 21.13 22.50 23.77 23.59 24.99 26.71 27.59 28.65
8 23.12 24.65 25.92 25.75 27.35 29.24 30.21 3US
9 25.11 26.80 28.07 27.91 29.71 31.77 32.83 34.05
10 27.10 28.95 30.22 JO.07 32.07 34.30 35.45 36.75 I
11 29.09 31.10 32.37 32.23 34.43 36.83 38.07 39.45
12 31.08 33.25 34.52 34.39 36.79 39.36 40.69 42.15
13 33.07 35.40 36.67 36.55 39.15 41.89 43.31 44.85
14 35.06 37.55 38.82 38.71 41.51 44.42 45.93 47.55
15 37.05 39.70 40.97 40.87 43.87 46.95 48.55 50.25
16 37.05 41.85 43.12 43.03 46.23 49.48 51.17 52.95
17 37.05 44.00 45.27 45.19 48.59 52.01 53.79 55.65
18 37.05 46.15 47.42 47.35 50.95 54.54 56.41 58.35
19 37.05 48.30 49.57 49.51 53.31 57.07 59.03 61.05
20 37.05 50.45 51.72 51.67 55.67 59.60 61.65 63.75
AVERAGE SINGLE FAMILY SEWER SERVICE CHARGE BILLING FORMULA
Rate Fixed Service Variable Commodity Monthly Sewer
Charge Charlle Charlle
Existing Rate $7.20 $1.99 x 10 HCF $27.10
Adopted Rate Fiscal Yr 2006 $7.45 $2.15 x 10 HCF $28.95
Adopted Rate Fiscal YR 2006 wi
Replacement Fee Increase $8.72 $2.15 x 10 HCF $30.22
Proposed Rate Fiscal Yr 2006 $8.47 $2.16 x 10 HCF $30.07
w/Replacement Fee Increase
J:\Engineer\SEWER\SEWER RATE UPDATE - CDM\Exhibit-E-SFR-Rate Impact- Councii-Agenda-S-17-0S.ac.doc
~l1
lo:>'.rt1B IT c:
City of Chula Vista
Cost of Service and Rate Study for Sewer Services
April 2005
~
Prepared by:
ClIVI
18581 Teller Avenue, Suite 200
Irvine, California 92612
SIt.{
CDNI
Contents
Executive Summary ..................................,...........................................,............................,... 3
Section 1 Introduction .....,...........................................,..,............................................'.'...' 6
1.1 Background ....................,'..........................................,....,.".....'............ 6
1.2 Purpose.......................................................,...,....................................,. 6
1.3 Scope of the Study................................................................................ 7
Section 2 Revenue ........................................,'.............................................,.."................... 8
2.1 User Classification and Customer Growth....................................... 8
2.2 Existing and Adopted Sewer Rates.................................................... 9
2.3 Sewer User Fee Revenue Under Existing Rates .............................. 11
2.3.1 Revenue Under Existing Rates ............................................. 11
2.3.2 Transfers from Trunk Sewer Capital Reserve Fund.......... 11
2.3.3 Other Revenues .................................................,.................... 11
2.3.4 Interest Income ....................................................................... 11
2.4 Winter Average Water Usage Approach......................................... 11
Section 3 Capital Improvement Program....................................................................... 12
3.1 Major Capital Improvement Financing Plan................,.................. 12
3.1.1 Sewer Facility Replacement Fund........................................ 12
3.1.2 Trunk Sewer Capital Reserve Fund..................................... 13
Section 4 Revenue Requirements .................................................................................... 15
4.1 Operation and Maintenance Expense............................................... 15
4.2 Debt Service Requirements ................................................................ 16
4.3 Transfer of Revenues to the Sewer Replacement Fund ................. 16
4.4 Transfers of Revenues to the Storm Drain Fund ............................ 16
4.5 Bad Debt Write-offs.......................,..................................................... 16
4.6 Routine Capital Outlays ..................................................................... 16
Section 5 Cash Flow Analysis .......................................................................................... 17
5.1 Proposed Revenue Adjustments....................................................... 17
Section 6 Cost of Service Analysis ................................................................................... 20
6.1 Cost of Service to be Allocated .......................................................... 20
6.2 Wastewater Parameters...................................................................... 21
·6.3 Allocation to Wastewater Parameters .............................................. 22
6.3.1 Allocation of Capital Costs ................................................... 22
6.3.2 Allocation of Operating Expense ......................................... 23
6.4 Allocation of Cost to Customer Classes ........................................... 24
6.4.1 Customer Oassifications....................................................... 24
6.4.2 Units of Service ....................................................................... 24
6.4.3 Unit Costs of Service .............................................................. 26
6.5 Customer Class Costs of Service ....................................................... 26
Section 7 Rate Design ........................................................................................................ 29
7.1 Existing Sewer Rates ........................................................................... 29
7.2 Proposed Sewer Rates......................................................................... 29
O:\USER\BocmhouwertChul.V1It.200~~parU8edil8.doc:
s-15
COM
Contents
(continued)
List of Figures
Figure 1 Sewer Operating Fund Sumrnary........,............................................................. 19
List of Tables
Table ES-l
Table 1
Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9
Table 10
Table 11
Table 12
Table 13
Table 14
Table 15
Table 16
Table 17
Table 18
Projected Growth by Customer Class.......................................................... 3
Projected Number of Accounts, Volume, and Revenue ........................... 9
Existing Sewer Rate Schedule ...................,.................................................. 10
Proposed Major Capital Improvements Program (Inflated) ................... 12
Sewer Facility Replacement Fund ............................................................... 13
Trunk Sewer Capital Reservation ................................................................ 13
Historical and Projected Operation and Maintenance Expense .............. 15
Operating Fund Flow of Funds .......................................,........................... 18
Allocation of Revenue Requirements ......................................................... 21
Allocation of Capital Investments to Functional Cost Components ....... 23
Allocation of Operation and Maintenance Expense to
Functional Cost Components.............................................................,.......... 23
Estimated Units of Service............,.,..................."........................,................ 25
Wastewater Characteristics ....,...................,.,..........................,...................., 25
Development of Unit Costs ........................................................................... 26
Allocation of Costs of Service to Customer Classes................................... 27
Comparison of Allocated Costs of Service With Revenue
Under Existing Rates..............................................,....................................... 28
Proposed Rate Schedule for Fiscal Years 2006 Through 2010 ..................30 Comparison of Customer Revenue Under Proposed Rates With
Test Year Cost of Service.....................,.......................".,...............................31
Comparison of Typical SFR Montlùy Sewer Bills ...................................... 32
2
O:\USERlBoomhouw.l'\ChulaVlata 2005 R.portJBedlta.doc
~/(P
CDM
Executive Summary
The City of Chula Vista (City) requested Camp Dresser & McKee (COM) to conduct
an update of the cost of service and rate study for sewer service. The study is to
evaluate the existing sewer rates, review and evaluate revenues and revenue
requirements, and perform cost of service and rate analyses to ensure equity among
customer classes, This report documents the results of the study and recommends
sewer rates that the City should charge its customers in the study period.
Throughout this study, references to a particular fiscal year always use the end date.
Thus, Fiscal Year 2005-2006 is termed FY 05-06 or just 2006 herein.
The objective of this report is to document development of fair and equitable rates
that can be easily implemented and updated for the City's sewer system for the study
period of FY 05-06 through FY 09-10 and a five-year financial plan that will secure
financial stability of the sewer enterprise.
SUMMARY OF FINDINGS AND RECOMMENDATIONS
1. The City is currently serving approximately 45,000 individual sewer customer
accounts. The study anticipates continued increases in the number of sewer
customers throughout the study period. The projected growth rate varies
depending on the customer category. Below are the annual percentage growth
used for the various customers.
Table ES-1
Projected Growth by Customer Clas.
Customer Gass FY..()5..t)6 FY -06-07 FY-07-oS FY -08-09 FY-09-10
Single Family Residential 5.2% 4.9% 4,7% 4.5% 4.3%
Multi-Family Residential 2,0% 2.0% 1.0% 1,0% 1.0%
Mobile Homes 0,0% 0.0% 0,0% 0.0% 0.0%
Commercial Low 2,0% 2,0% 1.0% 1.0% 1.0%
Commercial Medium 0,0% 0,0% 0.0% 0.0% 0,0%
Commercial High 0.0% 0.0% 0,0% 0.0% 0.0%
Special Users 0,0% 0,0% 0,0% 0.0% 0,0%
2. Sewer utility revenues are principally derived from sewer user fees. Other
revenue sources include transfers from the Trunk Sewer Capital Reserve Fund,
industrial waste permits, miscellaneous fees, and interest income. It is anticipated
that the Operating Fund will be self-supporting by FY 06-07 and no transfers from
the Trunk Sewer Capital Reserve Fund will be necessary thereafter. Revenue
3
O:\USER\Bocml\auwel'\Chulil V11t12CO~ ReportJB..:Ilœ.doc
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CDM
Executive Summary
derived from charges for service under current rates is estimated to be $20,236,200
for FY 04-05,
3.. An analysis found that with a billing cap of 15 hundred cubic feet (hcf) a month
which was set to avoid potentially charging high irrigation flows, wastewater
flows to Metro exceeded billable flows. The result is that the City currently incurs
cost to treat more flow than it bills. To remedy this discrepancy a further analysis
was conducted as part of this study and it is recommended that the single family
billing cap be raised to 20 hcf a month. The analyses presented in this report
assume the cap will be raised, Approximately $617,000 a year in additional
revenue will be generated by increasing the cap.
4. The Sewer Utility Capitallmprovement Program (CIP) is projected to total
$38,488,300 for FY 05-06 through FY 09-10. Projects include the purchase of
additional Metro capacity, sewer replacements, and annual improvements to the
sewer system, To finance the capital program, several funding sources are
planned to be used, including sewer facility replacement fees, storm drain fees,
sewer capacity charges, transfers from the General Fund, and existing fund
balances in the capital funds.
5. The sewer utility's annual revenue requirements consist of O&M expenditures,
routine capital outlays, bad debt write-offs, and transfers to the replacement fund
and storm drain fund, O&M expenses are projected to increase from $27,436,500 in
FY 05-06 to $31,083,600 in FY 09-10.
6. Required revenue increases throughout the study period are based on an analysis
of the sewer utility's revenues and revenue requirements. Our analyses indicate
sewer utility revenues will require the following increases for FY 05-06 through
FY 09-10. The revenue increases are lower than those indicated in the prior
studies as a result of recommending an increase in the 15 hcf cap to 20 hcf.
Effective Date
July 1, 2005
July 1, 2006
July 1, 2007
July 1, 2008
July 1, 2009
Increases
7.5 percent
7.5 percent
7.5 percent
3.5 percent
3.5 percent
7. By defirùtion, cost of service is the annualized revenue requirements net of
revenue credits from other miscellaneous sources that needs to be met through
4
O:\USER\Boomhcuw.r\ChlllaVl.1II 2005 R.porWBedlts.dcc
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CDM
Executive Summary
sewer rates. The City's estimated 2006 test year cost of service to be met from
sewer rates totals $23,240,600 and consists of the following elements:
Net Operation and Maintenance Expense
Capital Costs
Cost of Service to be recovered from Rates
$ 23,021,000
219,600
$ 23,240,600
8. A cost of service approach is used to develop rates for sewer service. This means
that customers are charged based on their proportional usage of facilities. The
proposed rates are consistent with 5tate Water Resources Control Board (5WRCB)
guidelines and recognized rate industry standards as described in the Wastewater
Envirorunent Federation (formally Wastewater Pollution Control Federation) rate
manual. Rates are developed using uniform UIÙt costs for volume, chemical
oxygen demand (COD) and total suspended solids (55). These are applied to
loadings and demands for service from each customer category. The rate schedule
which then follows is based on a uniform cost of service and recognizes loadings
from each customer class.
9. Based upon results from the detailed cost of service studies for the 2006 through
2010 test years, the proposed schedule of sewer rates shown in Table 16 have been
developed to recover the utility's cost in an equitable and practical manner from
all customers served. The proposed rates have higher fixed charges and volume
charges than the rates currently adopted to go into effect. The rates currently
scheduled to go into effect will not produce the desired level of revenue.
10. The average single family residential (5FR) customer is assumed to have a
monthly water usage of 10 hundred cubic feet (hcf). Table 18 shows a comparison
of typical 5RF monthly sewer bills under the scenarios reviewed in this study.
Briefly, the average household pays $27.10 per month under the existing rates.
The currently adopted rate structure will result in an average montlùy bill of
$30.22 for FY2006. The rate structure changes proposed in this study incorporates
some restructuring and recommends that the average FY2006 5FR monthly bill
will be $30.07. Detailed rates for other 5FR accounts with varying water usage are
shown in Table 18.
5
O:\U5ER\8oom~c UVAr\ChuIaVlIla2005R.portJBIICItI.dac
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Section 1
Introduction
1.1 Background
The City of Chula Vista is the sewer and storm drain service provider to the
residences and commercial enterprises in its service area. The City is located eight
miles south of the City of San Diego and seven miles north of the Mexico border and
covers approximately 50 square miles, The City is growing at a rapid pace, primarily
through new development in the eastern portion,
Wastewater generated in the City is collected and sent to a treatment facility in Point
Lorna operated by the City of San Diego Metropolitan Wastewater Department. The
City is billed by Metro based on the wastewater flow and strength sent to the
treatment plant.
In providing sewer service, the City incurs considerable expense related to the
ongoing operating and capital needs of the utility. Operating and capital expenditures
change annually because of the need for repairs and replacements to existing facilities,
the need to improve service to meet more stringent state and federal environmental
compliance requirements, and to stay abreast of inflationary trends. The City, in
recognition of the importance of financially planning for the costs to replace, improve,
and operate the sewer utility, has engaged Camp Dresser & McKee to perform a
comprehensive sewer cost of service and rate study. This study is an update of the
rate study performed by Black & Veatch in 2004.
The City's priorities in the coming years include purchase of additional sewer
capacity from Metro and on-going upgrades and improvements of the sewer system.
All these pmjetts are included in the City's five-year capital improvement program. A
major challenge will be to balance the requirements of expanded infrastructure with
available City revenues. All planned expenditures will need prioritization to assure
that financial resources are used in the most effective way.
1.2 Purpose
The purpose of this sewer rate study is to:
· analyze and project the City's historical and future revenues and requirements;
· plan for financing of the capital improvement program proposed by the City;
· meet the financial requirements of system improvements;
· analyze the cost of providing service by customer class;
· develop an equitable sewer rate structure based on proper customer classification;
CDM 6
O:IUSER\SoomhouwtorIChuIIVlaI.l2C05RaportJ8&d1t..doc
s:-. c?o
œM
Section 1
Introduct;on
· design sewer rates based on cost of service which will generate adequate revenues
to support revenue requirements.
1.3 Scope of the Study
This update to the 2004 rate study includes three phases: Financial Planning, Cost of
Service Analysis, and Rate Design.
· Financial Planning: Revenue requirements are projected for a five-year period
from FY 05-06 through FY 09-10. Financial planning involves estimation of annual
O&M and capital expenditures, interfund transfers, arumal reserve requirements,
operating and capital revenues, and the dete1TIÙnation of required annual user
revenues from rates and charges.
· Cost of Service: Cost of service involves the apportioIÙng of annual revenues
required from rates to the different user classes in proportion to their demands on
the sewer system.
· Rate Design: Rate design involves the development of a fixed and variable
schedule of sewer rates for each of the different user classes to reflect the required
revenue adjustments made during the financial planning phase.
This report includes six sections besides the Executive Summary and the Introduction.
Sections 2 through 7 present study results. These sections discuss in detail the
financial plallIÙng phase, cost of service analysis, and rate design phase.
7
o:\UseR\BoomhoUMIr\ChuIaViIlUl2005R.pcrtJ8ec1~.doo
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œlUl
Section 2
Revenue
Revenue for the sewer utility is derived from user charges, industrial waste permits,
transfers from the Trunk Sewer Capital Reserve Fund, miscellaneous revenues, and
interest income from operations. What follows in this section is a description of those
revenue sources.
2.1 User Classification and Customer Growth
The level of future revenue from user fees the City can expect to receive is a function
of the number of customers served, the quantity of sewer flow, and the level of
current rates. Development of projected revenues under existing rates provides the
benchmark upon which to evaluate the need for revenue adjustments throughout the
five-year study period,
Seven classes of customer are recognized. They include single family, multi-family,
mobile homes, low commercial, medium commercial, high commercial, and special
users. The study assumes modest future growth in the City service area. Table 1
shows the projected number of customer accounts, wastewater flow, and revenue
under existing rates for FY 04-05 and revenue under the adopted FY 04-05 rates for
FY 05-06 to FY 09-10.
The projected revenue numbers assume that the single family usage cap of 15 hcf will
be raised to 20 hcf in order more closely match the quantity of flow billed with the
quantity of flow sent to San Diego for treatment. The 2004 study found that the flow
sent to San Diego for treatment was approximately 445,000 hcf greater than the
billable annual flow, While a small portion of that may be infiltration, it was assumed
the majority of the discrepancy was unbilled flow as a result of setting the cap too
low.
Using 2004 detailed billing data, the following additional annual billable flows were
identified by the three billing areas if the cap were to be raised to 20 hcf:
Springbrook
Otay
Montgomery
Total
47,100 hcf
257,500 hcf
10,800 hcf
315,100 hcf
The data indicates raising the cap would close the gap in unbilled flow. For 2006 the
amount of additional flow was assumed to be 310,000. hcf It is assumed the cap will
be raised effective July 1, 2005. Raising the cap will produce approximately $617,000
annually in additional revenue. Total revenues are estimated to be $20,236,200 for
FY 04-05 to $24,573,000 for FY 09-10.
O:\USER\BoQmhOllWflr\Chu"VlII!~20O$R.portJSedlt..dcc
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s):.Þ
CDIII
Section 2
Revenue
TABLE 1
PROJECTED NUMBER OF ACCOUNTS, VOLUME, AND REVENUE
(I) (2) (3) (4)
Proj ected
Projected Projected Revenue
Fiscal Average Total Under
Year Ended Number of WW Existing
June 30 Accounts Volume Rates (1 )
hcf $
2004 43,870 8,183,000 18,844,100
2005 (2) 46,110 8,200,900 20,236,200
2006 (2) 48,370 8,813,000 21,619,200
2007 (2) 50,570 9,102,700 22,353,000
2008 (2) 52,790 9,394,700 23,092,300
2009 (2) 55,018 9,687,330 23,833,000
2010 (2) 57,240 9,979,576 24,573,000
(1) Includes revenue from Special Users.
(2) Projected revenue under adopted FY 04-05 rates.
2.2 Existing and Adopted Sewer Rates
The current sewer rate structure is comprised of varying montlùy service charge
based on meter size for multi-family residential and non-residential sewer customers,
Single family customers are charged based on a 5/8-inch meter at $5.80 per month for
sewer service FY 04-05. Single Family residential users currently have a volume
charge based on average winter water usage with a usage cap of 15 hcf. The current
volume charge is $1.99 per hcf.
Multl-family residential, mobile homes, and non-residential customers are charged a
uniform volume rate based on 79, 84 and 90 percent of metered water usage,
respectively. The uniform rates vary based on the type of customer. The existing rate
schedule is presented below in Table 2.
In addition to the service charges shown in Table 2, all customers are currently
charged an addition $0.70 a month for Storm Drain services and $0.70 a month for
Sewer Replacement. The additlonal $1.40 a month for those services makes the total
current single family service charge $7.20.
9
O:IUSE:FI.\Boomhauw.rlChuIliVlIlUl200~R.partJBtdltt.døc
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~ - {'~vJ
TABLE 2
EXISTING SEWER RATE SCHEDULE
Single Family Residential
An Others
5/8
3/4
1
I 1/2
2
4
6
8
Residential
Single Family
Multi-Family
Mobile Homes
Non~Residential
Commercial - Low Strength
Commercial - Medium Strength
Commercial - High Stength
Special User
Monthly
Service
Charge (1)
$Imo
5.80
5,80
5,80
10.51
22.28
36.40
69.35
116.42
234,10
Volume
Charge
$/hcf
1.99
1.99
1.99
1.99
2.42
4,02
Varies
(1) Excludes Storm Drain Charge and Capital Replacement Charge.
~
O:\USER\BcomnoUW<lr\C~ul.V1't.2005R.portJBedll8.doc
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:? (7' f·
Section 2
Revenue
10
CDM
Section 2
Revenue
2.3 Sewer User Fee Revenue Under Existing Rates
Revenue for financing the City's sewer system is derived principally from user
charges. Other revenues are received from miscellaneous revenues, transfers from the
Trunk Sewer Capital Reserve Fund, and interest income.
2.3.1 Revenue Under Existing Rates
Revenue under existing rates is obtamed by applying the current rate schedule,
shown in Table 2, to the projected number of customers served by the City and
estimated wastewater flow. Table 1 shows that the City will collect approximately
$20,236,300 in FY 04-05 for sewer services. The number includes bad debt write-offs of
approximately $300,000 which effectively reduce the level of revenue. We have shown
bad debt write offs as an operating expense.
2.3.2 Transfers from Trunk Sewer Capital Reserve Fund
The Operating Fund is currently receiving transfers from the Trunk Sewer Capital
Reserve Fund to help pay for the capital costs included in Metro treabnent costs. The
financial plan is to gradually reduce the transfers each year until the Operating Fund
is self-supporting. It is anticipated that no transfers from the Trunk Sewer Fund will
be necessary after FY 05-06.
2.3.3
Other Revenues
Other revenue sources include industrial waste permits, pump station maintenance
fees, reimbursements, and miscellaneous revenue. Total revenue from these sources is
estimated to be approximately $319,000 in FY 04-05.
2.3.4
Interest Income
Interest income varies from year-to-year depending on the invesbnent of available
monies in the Sewer Operating Fund. Invesbnent income projections are based on
available fund balances using an average annual interest rate of 3.5 percent
throughout the study period. Estimated interest income for FY 04-05 totals $206,700.
2.4 Winter Average Water Usage Approach
A previous analysis of the City's sewer customer billing data indicated that the City's
current approach of billing single family residential customers the lowest two months
of water usage is a fair and equitable method. This method is the most fair and
equitable approach and is used by a majority of large utilities in the United States.
However, the analysis found that with a billing cap of 15 hcf a month to avoid
potentially charging high irrigation flows, wastewater flows to Metro exceeded
billable flows. The result is that the City currently incurs cost to treat more flow than
it bills. To remedy this discrepancy a further analysis was conducted as part of this
study and it is recommended that the billing cap be raised to 20 hcf a month. The
analyses presented in this report assume the cap will be raised. Approximately
$617,000 a year in additional revenue will be generated by increasing the cap.
11
O:\USERl8oomhcuwtlrIChulll""'1II2CO~R.pottJ8ec1lla.doc
S:-,) .5
CDM
Section 3
Capital Improvement Program
The City has developed a sewer utility capital improvement program (CIP) to address
sewer systems need in terms of projects necessary to bolster and reinforce its existing
infrastructure facilities. A summary of the sewer capital improvement program,
which reflects the planned expenditures for each year during the study period, is
shown in Table 3. The program is estimated to total $38,488,300 for FY 04-05 through
FY 09-10. Sewer projects include the purchase of additional Metro capacity, sewer
replacements, and annual upgrades and improvements to the sewer system.
TABLEJ
PROPOSED MAJOR CAPITAL !MPROV£MENT PROGRAM (INFLATED)
'" "' <', '" <', (0, '"
"'" Fundidg FidCIIl YeuEodiœ JUlIO 30
"" D...ri",ion """'-ill = "" "'" "" "'" ~ ,..
, , , , , , .
, MOII.S...<lBoI.a....dway.ooWoodI.wnA"" , 336,300 , , , , · ])6,300
, Cc!orodos¡&t." "and"K"Slroots , 300,!OO , , , · · 360,100
, MamSt BOl InduoIrilJ & Tbitd Ave. , M,~ · · · · · 64,900
· C_S""o<lJ.ot4tbA...,,.,"'GontttAvo , 217,200 · · · · · 211,200
, ·G·s....otPumpStatiOD!mprovm>oms , 2.060,000 · · · · · 2,060,000
· SuI LAI<a r_y Pump Station DoœmmWionin¡ 0 103,000 · · · · · 103,000
, Polio.s_PS , " · · 56,300 · · 56,WO
· ~Rohab , 30\1,000 S30,500 S74,lOO 1.062,800 1,!17.~OO 1,161,300 5,065,JOO
· Vidoo!mpecri04 , 2S~,100 267,500 275,500 283,800 480,200 310,100 1,81UOO
'" Ropla<>emon'CII' , · JI8.JOO 317,800 · · · 546,100
" I'=IweAdditiamlMotmC.~'Y , · · · 27,000,000 · · 27,000,000
" InIIcw81. lnJi1....ti""SIIIdy , · 82,000 · · · · n,~
" ToIognopbCI.!I)'>II.TIUtlkSO....,.Imp..BayBJvd.&JSt , · 334,400 · · · · 3J4,400
" Roco"'tOfSO_rIUDC.·PIa..9oairaRd.&Sweotw....R,d. , · 122,000 · · · · 122,000
" Replac._Mo¡"'SooVolowes,ofBro.dWIIY , · 16],~OO · · · · 16;,~OO
" TOIOJ(!n1lolod) J,710,2oo 1,811,600 1,477,'00 28,402,900 1,607,700 1,471.400 J~
(1)T-TnlllkSoWllTCopiIOJRo..",.Fund,R-RepIo.,omoo,Fund,O_Opm.IiD3Fund,
3.1 Major Capital Improvement Financing Plan
The Sewer Fund consists of several restricted capital funds, including the Sewer
Facility Replacement Fund, Trunk Sewer Capital Reserve Fund, Sewer Special Fund,
Sewer Income Fund, and Storm Drain Fund. Only the Sewer Facility Replacement
Fund and Trunk Sewer Fund have scheduled CIP expenditures and are discussed in
detail below. The other Funds retain balances which will accumulate interest earnings
but are not discussed further.
3.1.1 Sewer Facility Replacement Fund
The Sewer Facility Replacement Fund is used to pay for the cost of refurbishment
and! or replacement of the CIP. The City currently has a sewer replacement charge of
$0.70 per dwelling unit per month for residential customers. Non-residential
customers are charged $0.06 per hcf of water usage per meter but in no case less than
$0.70 per meter. The fee is part of the sewer service charge. Based on a separate study
by PBS&J, another consultant, it is proposed that the charge be increased to $1.97 and
the corresponding volume charge to $0.11 per hcf based on a detailed study of long
term requirements. As shown in Line 2 of Table 4, transfers from the Operating Fund
to the Sewer Replacement Fund are anticipated to increase significantly once the new
charges are adopted effective July 1, 2005.
12
O:\USER\Boomhouwer\.ChlJlaVlal.200~R"IX'rtJB8dlta.dcc
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Cl:U
Section 3
Capita/Improvement Program
Table 4 indicates the City should have sufficient Replacement Fund resources to meet
requirements during the study period.
TABLE 4
SEWER FACILITY REPLACEMENT FUND
(1) (2) (J) (4) (S) (~
L"" Fiscal Year Endinll:lune JO
"'" Description ""' - "'" "'" .... JQ.U!
$ $ $ $ $ $
Source of Funds
1 F'1mds on Hand at Beginning ofYea.r 4,109,200 1,974,300 1,781,200 1.~S7.600 1,455,400 1,194,700
2 Sew« Facility Replaccmeut FOIls (From Opel3ting) 387,300 1,143,400 1,195,500 1,248,000 1,300,600 1,353,200
J TI&IIsfer IÌ'Om STORM DRAIN FUND 0 0 0 0 0 0
4 !ntefCStlncome[l 106,500 65,700 "400 52,700 46,400 40,500
, Total Funds Available 4,603,000 3,183,400 3,035,100 2,858,300 2,802,400 2,588,400
Use of Funds
Major Capital 1II¡J[ovcmeuts [2] 2,628,700 1,402,200 1,477,500 1,402,900 1,607,700 1,471,400
Total Use of Funds 2,628,700 1,402,200 1,477,500 1,402,900 1,607,700 1,471,400
Funds on Hand at End of Year 1,974,300 1,781,200 1,557,600 1,455,400 1,194,700 1,117,000
[IJ Intel'estonavaiIablccapitalfundsçoqJutedata3.5%iIIIIlualinœre.strate.
[2] Shown on Table 3 lIS fuodingsource uRn.
3.1.2 Trunk Sewer Capital Reserve Fund
Revenues generated from sewer capacity charges for sewer treahnent capacity are
available to fund "capacity" capital projects listed in the capital improvement
program. It is estimated that annual revenues will vary from just over $7 million to
$6.5 million, as shown in Line 2 of Table 5.
Line 3 of shows the repayment of the Salt Creek DIF loan. It is anticipated that the
fund will receive approximately $1,114,300 annually. Line 7 of Table 5 shows the
capital project amounts to be funded by year including the purchase of additional
sewer capacity in FY 07-08, two years earlier that indicated in other studies.
TABLE S
TRUNK SEWER CAPITAL RESERVE FUND
Line
"'"
(1) (2) (J) (4) (S) (6)
Fi3calYo:arEl!dinlllUDe30
DescriÐtion ""' - - "'" .... ¡QJQ
$ $ $ $ $ $
Source of Funds
Funds on HanI1 at Beginning of Year 11,759,900 8,205,701 11,546,301 19,748,301 804,301 8,681,601
SewerCapacityCbarges 6,504,000 6,567,000 6,510,000 6,552,000 6.567,000 6,558,000
Repayrneølof Salt Creek DlFLoan 1,144,300 1,144,300 1,144,300 1,144,300 1,144,300 1,144,300
T!IID.!Ifer ftom Telegraph Canyon Trunk Sewer Proj 1,161,201 0 0 0 0 0
Interesthx:ome[l] 349,400 345,700 547,700 359,700 166,000 446,500
Total Funds Available 20,!H8,801 16,262,701 19,748,301 27,804,301 8,681,601 16,830,401
Use of Fund.
Major Capital Improvement:! [2] 6,813,100 416,400 27,000,000 0 0
Tnmsfer to OPERATINQ FUND 5,900,000 4,300,000 0 0 0
Total Usc ofFU111J5 12,713,100 4,716,400 0 27,000,000 0 0
Funds on HamI at End of Year 8,205,701 11,546,301 19,748,301 804,301 8,681,601 16,830,401
[1] Interestonavailablecapitalfunl1acompuœl1ata3.5%annualinterestra!c
[2] Shown on Table 3 aa fundín¡ source 'T",
7
.
9
10
13
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Section 3
Capital Improvement Program
The Trunk Sewer Capital Reserve Fund is transferring a series of revenues to the
Operating Fund (Line 8). These transfers are to help pay for the capital portion of
Metro costs until the Operating Fund is self-supporting through rate increases. It is
projected that the last such transfer will occur in FY 05-06. That is two years earlier
than indicated in a previous study because the additional revenues are need to
purchase capacity from Metro.
Table 5 shows that the projected balance of the Trunk Sewer Capital Reserve Fund
will remain positive for FY 04-05 and forward, However, because the City will need to
acquire additional capacity from Metro and because the cost of that capacity may
increase, the fund will have significant balances which are considered prudent.
Furthermore, the City should immediately proceed to search for additional capacity
and purchase it when available to the extent financial resources exist.
CI:1M
14
O:IUSER\8oomhouwer'IChuw.V1ltI2C05Rlport.J8Idlla.doc
$::) 3
call
Section 4
Revenue Requirements
Revenue Requirements of the utility consist of operation and maintenance expenses
and annual capital costs. The latter includes debt service, which the utility currently
does not have, and routine capital outlays for equipment replacements.
4.1 Operation and Maintenance Expense
Operation and maintenance (O&M) expense includes the cost of operating and
maintaining sewer collection, treatment and disposal of wastewater, and maintenance
of system facilities. Expenses include the cost of personnel, utilities (gas and electric),
chemicals, and miscellaneous materials and supplies to operate the sewer system on a
routine basis. Expenses also include payment to the general Fund for overhead costs.
Since O&M costs are an ongoing annual obligation of the City, they must be met from
user charge revenue.
Table 6 presents a summary of the projected O&M expenses for the City's sewer
system. The forecasted expenditures are based upon the City's budget and the effect
of inflation in future years. Total operation and maintenance expense is projected to
increase from $26,179,300 in FY 04-05 to $31,083,600 in FY 09-10. The Metro and
Spring Valley costs shown on Lines 7 and 8 include both O&M and capital costs.
Every year Metro provides the City with a four-year projection of treatment costs
based on the City's estimated wastewater flow and strength. Metro's recent projected
treatment costs for the City were lower than previous year's projections. However it is
anticipated that these costs in the future will be higher than the current projections.
Furthermore, unless Metro is able to refinance notes used for capital improvement
financing, Metro charges in the near term may increase significantly.
TABLE ,
HLSTORlCAL AND PROJECTED OPERATION AND MAINTENANCE EXPENSE
(1) (2) (3) (') (S) (6J
Fiscal Yew: EnwtUI Junc 30
L" ....... Proiected
"" J)açriDtioa "'-\ - - WI - ¡j¡ Q
S S S S S S
WW Support Services
WW Opel1ltlQIIJ Admin 223,400 230,100 237,000 244,100 251,400 258,900
WW Mainœl\lUJçc 5,64$,900 5,818,400 5,993.000 6,172,800 6,358,000 6,548,700
LiftStationlPoolMaint 558,300 575,100 592,400 610,200 628,500 647,400
Sewer Billin¡ IIDd Collectioo [I] 334,400 344,500 354,800 365,400 376,400 387,700
Sewef Service Expenditures 115,300 118,800 122,400 126,100 129,900 133,800
Sewer Service RiIIkManagement 47,100 48,500 50,000 51,500 53,000 54,600
Transfer to caneml Fund 1,912,300 2,041,400 2,112,800 2,186,700 2,263,200 2,342,400
ToQLJWWSupportServices 8,899,700 9,176,800 9,462,400 9,756,800 10,060,400 10,373,500
. Mr;tfoCo8l[2] 16,428,300 17,553,400 18,255,$00 18,985,800 19,745,200 20,535,000
10 Spring YallcyCoslI[3] 851,300 706,300 504,900 360,900 452,500 175,100
11 Total O&M E~pcnllc· 26,179,300 27,436,500 28,222,800 29,103,500 30,258,100 31,083,600
[IJ Amunes Olaybillin¡ coslwìll iDCl'eaSebe¡iDningFY 04-05.
[2] IT 04-05 ønd FY 05.06 fromMelro. An inflalion of 4% assumed. for IT 06.07 thmu¡h FY 09·10.
[3] DatafromSanDie¡oCounly.
·NOIe: TOIaICJ\CludesCapilalOullay
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O:IUSER\BoOmhauWllr\Chllia VlIIta 2005 RaparIJBedlla,cioc:
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Section 4
Revenue Requirements
4.2 Debt Service Requirements
The City currently does not have any existing outstanding bond indebtedness,
4.3 Transfer of Revenues to the Sewer Replacement
Fund
As part of the sewer service charge, a sewer replacement fee of $0.70 per dwelling unit
per month is charged to residential customers. Non-residential customers are charged
$0,06 per hcf of water usage per meter but in no case less than $0.70 per meter. As
discussed above, those charges are projected to increase. Total revenues collected will
be transferred to the Replacement Fund.
4.4 Transfers of Revenues to the Storm Drain Fund
Similar to the sewer replacement fee, the City also has a storm drain fee of $0.70 per
dwelling unit per month. It is anticipated that the Operating Fund will make a series
of transfer to the Storm Drain Fund matching revenues collected.
4.5 Bad Debt Write-offs
It is anticipated that the City will have a bad debt write-offs of $300,000 annually. The
majority of the write-offs are from customers in the pre-annexation area of the City
who are billed by the City's Finance Deparbnent. Since the sewer billing is not done in
conjunction with the water bill, the City does not have the ability to shut-off water
service in order to collect these bills.
4.6 Routine Capital Outlays
Routine capital outlays, which are financed from annual system earnings, include
estimates for relatively small additions and replacements to system facilities. A capital
outlay of $100,000 is projected for each year in the study period.
O:IUSERI8oomho",,"rlChula Vlst. 2005 RaportJ8lditl.doc
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~,"?tJ
(liD
Section 5
Cash Flow Analysis
5.1 Proposed Revenue Adjustments
To provide for the continued operation of the sewer utility on a sound financial basis,
revenue must be sufficient to meet revenue requirements. This section of the report
analyzes the revenue increases needed to meet future revenue requirements.
The pro forma operations statement or cash flow summary presented in Table 7
provides a basis for evaluating the timing and level of sewer revenue increases
required to meet the projected revenue requirements during FY 05-06 through
FY 09-10. In order to meet projected revenue requirements and to maintain desired
operating and capital reserve fund balances, the following increases are proposed:
Effective Date Increases
July 1, 2005 7.5 percent
July 1, 2006 7.5 percent
July 1, 2007 7.5 percent
July 1, 2008 3.5 percent
July 1, 2009 3.5 percent
The magnitude of the increases shown above has been selected in order for total
sewer revenue to meet revenue requirements and eliminate the transfers from the
Trunk Sewer Capital Reserve Fund. The study assumes that the cap for single family
customers will be raised to 20 hcf. Because of that, the percentage increases are lower
than the percentage increases in the City Council adopted four-year plan. Also, the
increases shown for the last three years are basically to pass through assumed cost
increases from Metro and inflation.
Estimated sewer revenue under existing rates is shown on Line 1 of Table 7. The
annual revenue shown is the same as in Table 1. Additional operating revenues from
any proposed rate increases are shown on Lines 2 through 7. Other revenues and
interest income are shown on Lines 10 through 15.
Operation and maintenance expenses, transfers to other funds, and bad debt
write-offs are shown on Lines 17 through 22. Line 18 shows the transfers to the Sewer
Replacement Fund and Une 19 presents the transfers to the Storm Drain Fund
scheduled for each year.
The cash flow indicates the projected revenue increases will be sufficient to meet all
the needs of the utility and maintain adequate fund balances throughout the study
O:\USER\BoomI'loUMrlCnulaV1st112C0i5F1epcrtJSldltl.doa
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~"gl
Section 5
Cash How Analysis
period with the proposed 7.5 percent annual increases the first three years and
3.5 percent after that. It is anticipated that the Operating Fund will be self-sufficient
and no transfers from the Trunk Sewer Capital Reserve Fund will be necessary
beyond FY 05-06. Table 7 shows that annual fund balances will remain positive but
generally below the minimum desired balance defined as 90 days O&M, considered a
reasonable working capital balance for a wastewater utility.
TABLE?
OPERATING FUND FLOW OF FUNDS
(1) (2) (3) (') (5) (6)
Line FiscalY~Endin¡¡June30
"" Descriotion - - """ "" AM NlQ
, , , , , $
Revenue:
Wastewater Service Char~es Under Existing Rates 20,236,200 21,619,200 22,353,000 23,092,300 23,833,000 24,573,000
AdditiooalServiceCharaeRl;VcnueRequired:
Annualized
Revenue Months
Yrn """" Effective
2 2005 0.00% 12.0 0 0 0 0 0 0
3 2006 7.50% 12.0 1,621,400 1,676,500 1,731,900 1,781,500 1,&43,000
. 2007 7.50% 12.0 1,802,200 1,861,800 1,921,500 1,981,200
5 2008 7.50% 12.0 2,001,500 2,065,700 2,129,800
6 2009 3.50% 12.0 1,036,300 1,068,400
7 2010 3.50% 12.0 1,105,800
8 TotaJ Additional Service Charse Revenue 0 1,621,400 3,478,700 5,595,200 6,811,000 8,128,200
9 Total Wastewater SCfVice Charge Revenue 20,236,200 23,240,600 25,831,700 28,687,500 30,644,000 32,701,200
10 O!herRevenues 319,000 328,500 338,400 348,600 359,000 359,000
11 Replacement Fee Revenue 387,300 1,143,400 1,195,500 1,248,000 1,300,600 1,353,200
12 Storm Drain Revenue 608,300 620,000 640,700 661,500 682,300 703,100
13 Transfer from TRUNK SEWER CAPITAL RESERVE 5,900,000 4,300,000 0 0 0 0
I' Interest Im:ome From Operations [I] 201,200 206,700 170,900 ]25,000 127,300 !66,000
15 Interest Income From Restricted Reserves [I] 0 0 0 0 0 0
16 Total Operating Revenues AvaiJable 27,652,000 29,839,200 28,177,200 31,070,600 33,113,200 35,282,500
Revenue Requirements:
17 Operation and Maintellilnce Expense 26,179,300 27,436,500 28,222,800 29,103,500 30,258,100 31,083,600
18 Transfer 10 REPLACEMENT FUND 387,300 1,143,400 1,]95,500 1,248,000 1,300,600 1,353,200
19 Transfer to STORM DRA]N FUND 608,300 620,000 640,700 661,500 682,300 703,100
20 Tranafer Out 10 Other Funds 0 0 0 0 0 0
21 Bad Debt Writc-QffiJ 300,000 300,000 300,000 300,000 300,000 300,000
22 Routine Capital Outlay 103,000 100,000 100,000 100,000 100,000 100,000
2J Total Revenue Requiremenb 27,577,900 29,599,900 30,459,000 3],413,000 32,64],000 33,539,900
2' Net Operatin¡ Funds Available 74,100 239,300 (2,281,800) (342,400) 472,200 1,742,600
25 Begìnning Operatin : Fund BaJam;e 5,711,400 5,785,500 6,024,800 3,743,000 3,400,600 3,872,800
" Cumulative Operating Fund Balance 5,785,500 6,024,800 3,743,000 3,400,600 3,872,800 5,615,400
27 Minìmwn Desired Balance [2] 6,544,800 6,859,100 7,055,700 7,275,900 7,564,500 7,770,900
[IJ Eatimaœd bascd on 3.5% intercstrate.
[2] Estimatcd at 90 days of operation and maintenance cxpensc.
a:JM
18
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S-3~
Section 5
Cash Flow Analysis
Figure 1 shows a graphical summary of the revenue under the proposed rates with
revenue requirements. The figure indicates that revenue under the proposed rates is
not sufficient to cover operation and maintenance and capital expenses for FY 04-05
through FY 05-06 and that transfers from the Trunk Sewer Capital Reserve Fund will
be necessary. However, no transfers are anticipated in FY 06-07 through FY 09-10 once
the Operating Fund becomes self-sufficient.
40,0
35.0
30.0
I!! 25,0
.!!
Õ
0 20,0
c
~ 15,0
i
10,0
5,0
0.0
2005 2006 2007 2008 2009 2010
Fiscal Year
~ Clty's Operating Expense c:::::J Metro/Spring Valley Costs
t::::J Transfers to Other Funds ___Rate Re\enue INith Increases
Figure 1 Sewer Operating Fund Summary
CIIII 19
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fY33
œu
Section 6
Cost of Service Analysis
The cost of service analysis is a critical element in a rate study. The total revenue
requirements net of revenue credits from miscellaneous sources, is by definition, the
cost of providing service, This cost of service is then used as the basis to develop unit
rates for the wastewater parameters and to allocate costs to the various user classes in
proportion to the quantity of wastewater contributed and the strength of wastewater.
In this study, FY 05-06 is referred to as the "test year", therefore, FY 05-06 revenue
requirements are used in the cost allocation process,
6.1 Cost of Service to be Allocated
The annual revenue requirements or costs of service to be recovered from charges for
wastewater service consist of the elements of O&M expense and capital related costs.
O&M expense includes cost directly related to the collection, treatment and disposal of
wastewater, and maintenance of system facilities. Capital related costs represent routine
capital outlays.
The test year cost of service to be recovered from wastewater service charges is
estimated at $23,240,600. As shown in Table 8, the total cost of service comprises net
operating expenses of $23,021,000 and capital costs of $219,600.
In determining the annual cost of service revenues required from rates, revenues from
other revenue sources, such as miscellaneous revenue and transfers from the Trunk
Sewer Capital Reserve Fund, are deducted from the appropriate cost element. In
addition, adjustments are made to account for cash balances.
O:IUSER\BoomoouwellChula Vlsla 2005 RaportJBedlta,doc
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5-:31
Section 6
Cost of SelViee Analysis
TABLES
ALLOCATION OF REVENUE REQUIREMENTS
Test Year 2006
(I) (2) (3)
Line Operating Capital and
~ ~ Other Costs Total
$ $ $
Total Revenue Requiremeots
1 Operation & Maintenance Expense 27,436,500 27,436.500
2 Total Debt Service 0 0
3 Routine Capital Outlay 100,000 100.000
4 Bad Debt Write-offs 300,000 300.000
5 Transfer to REPLACEMENT FUND 1,143,400 1.143.400
6 Transfer to STORM: DRAIN FUND 620,000 620,000
7 Subtotal 28,356,500 1,243,400 29,599,900
Less Other Operatiog Revenue
8 Other Revenues 328.500 328.500
9 Transfer from Trunk Sewer Capital Reserve 4.300.000 4.300.000
10 Replacement Fee Revenue 1.143,400 1,143,400
11 Stonn Drain Revenue 620,000 620.000
12 Interest Income 206.700 206,700
13 Subtotal 5,455,200 1,143,400 6.598.600
Adjustments
14 Adjustment for Annual Cash Balance (119.700) (119.600) (239.300)
15 Adjustment to AnnuaJìze Rate Increase 0 0
16 Subtotal (119.700) (119.600) (239.300)
17 Cost of Service to be Recovered from Rates 23.021.000 219,600 23.240.600
6.2 Wastewater Parameters
The total cost of sewer service is analyzed by system functions in order to equitably
distribute costs of service to the various classes of customers. For this analysis, sewer
utility costs of service are assigned to three basic functional cost components
(wastewater parameters) including volume related costs, strength related costs, and
customer related costs. Functional cost components relate to services provided and not
activities of the utility.
Volume costs are those which vary directly with the quantity of wastewater contributed
and include:
. Capital costs related to the investment in the system facilities which are sized on
the basis of wastewater volume,
. O&M expense related to those facilities, and
CDM 21
O:\uSERlBoomhOUWllrIChull.V1.ta200<5R.port.JS.dlt..cIoc
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Section 6
Cost of Service Analysis
· The expense of treabnent chellÙcals and electric power-associated with the
volume of wastewater treated.
Wastewater strength costs consist of the O&M expense and capital costs related to
system facilities, which are designed principally on the basis of the quantity of
pollutants in the wastewater. Strength costs are further separated into COD and 55.
Customer costs are those which tend to vary in proportion to the number of
customers served. These include billing and collection expenses and general
administration,
The separation of costs of service into these principal components provides the means
for further allocation of such costs to the various customer classes on the basis of their
respective volume and customer requirements for service.
6.3 Allocation to Wastewater Parameters
The allocation of O&M and capital costs to the wastewater parameters selected
involves the following:
· Identification of functional O&M and capital costs of the wastewater system
· Determination of O&M and capital cost allocation percentages for the wastewater
parameters
O&M expense items are allocated directly to appropriate cost components, while the
allocation of capital costs is based upon a detailed allocation of related capital
invesbnent. The separation of costs into functional components provides a means for
distributing such costs to the various classes of customers on the basis of their
respective responsibilities for each particular type of service.
6.3.1 Allocation of Capital Costs
Capital costs include routine capital improvements. A reasonable method of assigning
capital costs to functional components is to allocate such costs on the basis of the
capital improvement projects.
Capital projects are allocated to cost components on a design basis recognizing
the principal function governing the design of the facilities which influence the
. majority of its costs. A reasonable method of assigning capital costs to
functional components is to allocate such costs based upon the nature of the
capital cost. For example, the pumping stations are allocated to the volume
cost component because they are designed in relation to the average volume of
wastewater flow; while the collection costs are allocated to the customer and
volume parameters.
Table 9 shows the allocation of the capital costs of $1,918,600. It is the basis for
recovery of the test year 2006 net capital costs of $219,600.
Q1M
22
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Section 6
Cost of SalVies Analysis
TABLE 9
ALLOCATION OF CAPITAL INVESTMENTS
TO FUNCTIONAL COST COMPONENTS
Test Year 2006
(1) (2) (3) (4) (5)
Strength
Suspended
Total Volume !:Q!l ~ Customer
Line i $ $ $ $
No, Cost Component
1 Collection 1,500.300 750,150 0 0 750,150
2 Pumping 318,300 318,300 0 0 0
3 General Plant 100.000 50,000 0 0 50,000
4 Total 1,918.600 1,118,450 0 0 800,150
5 Percent 58.3% 0.0% 0.0% 41.7%
6.3.2 Allocation of Operating Expense
Projected net operating expense for the test year is allocated to cost components on
the basis of an allocation of O&M expense as shown in Table 10. O&M expense for the
test year is allocated to cost components in the same manner as capital costs, based on
the design criteria of the plant facilities. The allocation of Metro costs is based on
annual billing.
TABLE 10
ALLOCATION OF OPERATION Ai'lD MAINTENANCE EXPENSE
TO FUNCTIONAL COST COMPONENTS
Test Year 1006
(1) (2) (3) (4) (5)
Strenllth
Line Total Suspended
Ha. Cost COlDDonent """""" Yclwno COO SIIWls CIaI=
$ $ $ $ $
WW Support Services
1 WW Operations Admin 230,100 0 0 0 230,100
2 WWMaintenance 5,818,400 4,363,800 0 0 1,454,600
3 Lift StationlPool Maint. 575,100 575,100 0 0 0
4 Sewer Billing and Collection 344,500 0 0 0 344,500
5 Sewer Svc Expenditures 118,800 0 0 0 118,800
6 Sewer Svc Risk Management 48,500 0 0 0 48,500
7 Transfer to General Fund 2,041,400 0 0 0 2,041,400
8 Total WW Support Services 9,176,800 4,938,900 0 0 4,237,900
9 Metro Cost 17,553,400 9.347,102 4.243,066 3,963,232 0
10 Spring Valley Costs 706,300 706,300 0 0 0
11 Total OperatiÒD & Maintenance 27,436,500 14,992,302 4.243,066 3,963.232 4,237,900
12 Percent 54.64% 15.47% 14.45% 15.45%
23
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œM
Section 6
Cost of Setvice Analysis
6.4 Allocation of Cost to Customer Classes
The total cost responsibility of each customer class may be estimated by distributing
the cost of service allocated to functions in Tables 9 and 10 among the classes based on
the respective service requirements of each class.
The allocation of costs of service into the principal service requirement components
(customer, volume and strength related) provides a means for further allocation of
costs to the various customer classes on the basis of their respective volume and
strength.
6.4.1
Customer Classifications
For purposes of cost of service analysis and rate design, sewer customers are classified
to reflect groups of customers with similar service requirements and who are served
at a similar average cost, Sewer customers are currently separated by the City into the
following classes:
· Single Family Residential
· Multi-Family Residential
· Mobile Homes
· Commercial - Low Strength
· Commercial - Medium Strength
· Commercial - High Strength
· Special Users
6.4.2
Units of Service
The determination of customer class responsibility for costs of service requires that
each general customer class be allocated a portion of the volume, strength and
customer costs of service according to its respective service requirements, and that all
costs directly associated with a specific customer class be allocated to that class.
The estimated test year service requirements or units of service for the various customer
classes are shown in Table 11. Cost responsibility by customer class is based on each
class' share of units of service. That is, if a class contributed one-tlúrd of the wastewater
flow it will be assigned one-tlúrd of volume related costs. The same is done for
strength-related costs and customer costs, Metered water and wastewater data for
FY 03-04 was used to estimate customer usage by customer category and to balance
total wastewater plant loadings.
24
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CDM
Section 6
Cost of Service Analysis
Estimates of the wastewater volume of each class are based upon water usage records
and include an estimated return factor for water reaching the wastewater system,
Estimated strengths and return factors used in the prior studies are shown in Table 12.
The estimated total wastewater volume for test year 2006 is 8,777,100 hcf and includes
billable flow to the proposed new single family cap of 20 hcf. Infiltration is not
included.
TABLE 11
ESTIMATED UNITS OF SERVICE
Test Year 2006
(1) (2) (3) (4)
Strength
Line Wastewater Suspended Number of
JS<1. CustornerClass Y2Iwn< = SJ1Iiœ -
hof lb. lb.
Residential
1 Single Family 5,403,900 18,889,500 5,565,700 44,294
2 Multi-Family 1,785,500 6,241,300 1,839,000 2,207
3 Mobile Homes 82,500 288,300 84,900 19
Non-Residendal
4 Commercial- Low 741,500 2,592,000 763,700 1,391
5 Commercial· Medium 119,700 747,000 261,500 184
6 Commercial- High 163,300 2,038,900 713,600 175
7 Special Users 480,700 1,680,300 495,100 98
8 rotal 8,777,100 32,477,300 9,723,500 48,368
TABLE U
WASTEWATER CHARACTERISTICS
Wastewater Strengths
Customer Return COD TSS
Classification Factor mg/L mg/L
%
Single Family Residential (1) 100 560 165
Multi-Family Residential 79 S60 165
Mobile Homes 84 S60 165
Commercial - Low 90 560 165
Commercial - Medium 90 1000 350
Commercial - High 90 2000 700
Special Users (2) 90 560 165
(1) Winter period usage,
(2) Average strength,
25
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an
Section 6
Cost of Service Analysis
6.4.3
Unit Costs of Service
Table 13 shows the development of the test year unit costs for each of the wastewater
parameters, The test year net O&M expense is allocated to volume, COD, 55, and
customer based on the O&M allocation percentage shown in Line 12 of Table 10. The
test year capital expense is allocated to volume, COD, 55, and customer based on the
capital cost allocation percentage derived in Line 5 of Table 9,
The unit costs of service shown in Line 5 of Table 13 are developed by dividing Line 3
by Line 4.
TABLE 13
DEVELOPMENT OF UNIT COSTS
TestYear2006
(1)
(2)
(3)
(4)
(5)
Line
H!!.
Strenøh
Suspended
I2!;!! Y2JJIm< = ~ ~
S S , S S
23,021,000 11,258,800 4,243,100 3,963,200 3,555,900
219,600 128,000 0 0 91,600
- - -
23,240,600 11,386,800 4,243,100 3,963,200 3,647,500
8,777,100 32,477,300 9,723,500 54,522
h,' pounds pounds Eq.metcrs
1.2973 0.1306 0.4076 66.9000
NetOperatìng&'pcnse
Capital Costs
TotalCoslofService
4 Total Units of Service
Tota! Unit Costs of S ervice-$/unit
6.5 Customer Class Costs of Service
The cost responsibility of each customer class is determined by applying the unit cost
of service shown in Table 13 to the units of service estimated for a class (shown in
Table 11). The cost of service allocated to each customer class is summarized in
Table 14.
O:\USER\Boomhouw.rlChu!llVI,ta2005R.portJBadlts.doe
26
I!
s- LftJ
CIII I
Section 6
Cost of Service Anaiysis
TABLE 14
ALLOCATION OF COSTS OF SERVICE TO CUSTOMER CLASSES
Test Year ZOO6
(1) (2) (3) (4) (51
Sttenrctn
Line Suspended
1!2. - ~ """ ~ """"'-
, , , , ,
UnitCostafServícc l.2973 0.1306 0.4076 66.9000
ResldeJúia]
SîngleFamily
2 Units 5,403,868 18,889,500 5,565,700 44,294
3 Cost-S 14,111,100 7,010,900 2,468,500 2,268,400 2,963,300
Multi-Family
4 Units 1,785,500 6,241,300 1,839,000 5,528
, Coat-$ 4,250,800 2,316,300 815,100 749,600 369,800
Mobile Home
Units 82,500 288,300 84,900 90
Cost-$ 185,300 107,000 37,700 34,600 6.000
NOD-ruideuti.¡
Commcroial· Low
Units 741,500 2,592,000 763,700 3,198
Cost-$ 1,825,700 961,900 338,500 311,300 214,000
Commercial- Medium
10 Units 119,700 747,000 261,500 439
11 CO&t-$ 388,800 1SS,300 97,6ØO 106,600 29.300
CommCl'Cial- High
12 Units 163,300 2,038,900 713,600 429
1) Coat-S 797,700 211,800 266,300 290,900 28,700
SpecialUsen
14 Units 480,700 1,680,300 495,100 544
15 COSI·S 1,081,200 623,600 219,400 201,800 36,400
16 TolII.!Co.stofService-S 23,240,600 11,386,800 4,243,100 3,%3,200 3,647,500
Table 15 shows a comparison of the cost of service for each customer class with
revenue under existing rates, indicating the impact of cost of service allocation on
each class. A 7.5 percent annualized increase in the level of sewer revenue is indicated
to meet the projected revenue requirements for FY 05-06. The cost of service analysis
ensures that the test year 2006 revenue requirement of $23,240,600 is met.
The result of the cost of service analysis is very informative. Table 15 shows that most
customers have been paying close to their fair share of cost of service. The table
indicates that medium and high commercial and special user customers are currently
being subsidized by the single and multi-family residential, mobile homes, and low
strength commercial customers who have been paying slightly in excess of their
allocated costs.
27
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ŒIlII
TABLE 15
COMPARISON OF ALLOCATED COSTS OF SERVICE
WITH REVENUE UNDER EXISTL"IG RATES
Test Year 2006
Line
¡,¡."
Customer Class
1
2
3
Residential
Single Family
Multi-Family
Mobile Homes
Non-Residential
Commercial· Low
Commercial· Medium
Commercial· High
Special Users
Total
4
5
6
7
8
O:\USER\8oomhouwtorIChuIllVI1IÙII2005ReportJB6dIIll,doc
st¡;;
(1)
Total
Cost of
5<:rriJ:!:
$
14.711.100
4,250.800
185.300
1.825,700
385,800
797,700
1,081,200
23,240,600
Section 6
Cost of SelVice Analysis
(2) (3)
Revenue Indicated
Under Revenue
Existing Increase
RaIos (DecreH~~)
$ %
13,836,600 6,32
3,967.600 7,14
171,400 8.11
1,780,400 2.54
330,100 17.78
707.700 12,72
825,400 30,99
21,619,200 7.50
28
(E U
Section 7
Rate Design
In general, class cost of service allocations serve as a "guide" to the necessity for, and
extent of, rate adjustments. Other considerations such as the change from previous
rate levels, public reaction to rate changes, past local policies and practices, and local
regulations may modify indicated cost of service adjustments. The end result of any
rate adjustment process, however, should be rate schedules which are simple to
apply, clearly understood, and as equitable to each customer class as possible.
7.1 Existing Sewer Rates
The current sewer rate structure is comprised of varying monthly service charge
based on meter size for multi-family residential, mobile homes, and non-residential
sewer customers. Single family customers are currently charged based on a
S/8-inch meter at $5.80 per month plus $1.40 a month for the Storm Drain and
Replacement charges. Single family residential have a volume charge based on
average winter water usage with a sewer cap of 15 hcf.
Multi-family, mobile homes, and non-residential customers are charged a uniform
volume rate based on 79, 84, and 90 percent of metered water usage, respectively, The
uniform rates vary based on the type of customer. Special users have a volume charge
that is based on 100 percent of metered wastewater flow.
7.2 Proposed Sewer Rates
The cost of service analysis provides the basis for adjusting sewer service charges. The
cost of service allocation study provides the UIÙt costs of service used in the rate
design process and gives a basis for determining whether resultant rates will recover
costs of service from customer classes and provide the total level of revenue required.
Table 16 presents the proposed rate schedule for FY 05-06 through FY 09-10. We
recommend that the City raise the billable cap for single family customers to 20 hcf. In
addition to the service charges shown in Table 16, the existing Storm Drain Charge of
$0.70 and the proposed Capital facilities charge of $1.97 must be added.
29
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s13
Section 7
Rate Design
TABLE 16
PROPOSED RATE SCHEDULE FOR FISCAL YEARS 2006 THROUGH 2010
Meter
=
2006 2007 JQQ£ J.QQ2. 2Q.lli
Monthly Service Charge ( 1)
$/month $/month $/month $/month $/month
5,80 5,80 6.33 6,58 7.08
5.80 5,80 6.33 6.58 7.08
5.80 5.80 6.33 11.92 7,08
9.67 9.67 10,55 10.97 11.80
19.33 19.33 21.10 21.93 23.60
30,93 30,93 33,76 35.09 37.76
58,00 58,00 63.30 65,80 70.80
96,67 96.67 105.50 109.67 118.00
193.33 193.33 211.00 219.33 236.00
309,33 309.33 337.60 350.93 377.60
Volume Charge
$/hcf $/hcf $Jhcf $lhcf $Jhcf
2,16 2.36 2.53 2,62 2.70
2,16 2,36 2.53 2,62 2,70
2.16 2,36 2.53 2,62 2,70
2.16 2.36 2,53 2.62 2.70
3.00 3.22 3.38 3.47 3.55
4.71 4.94 5,12 5.23 5.33
2,16 2.36 2,53 2.62 2.70
Single Family Residential
All Others
5/8
3/4
1
11/2
2
3
4
6
8
Residential
Single Family
Multi-Family
Mobile Homes
Non-Residential
Commercial· Low
Commercial - Medium
Commercial - High
Special Users
Table 17 presents a summary of the revenue under the existing rates, cost of service
and revenue under proposed rates for each customer class for test year 2006. The table
shows that the proposed rate schedule will fairly recover the cost of providing sewer
service from all of the customer class.
œM
30
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CDM
Section 7
Rate Design
TABLE 17
COMPARISON OF CUSTOMER REVENUE UNDER PROPOSED RATES
WITH TEST YEAR COST OF SERVICE
Test Year 2006
(I) (2) (3) (4)
Proposed Rates
Estimated
Test Year Revenue Revenue A,.
2006 Under Under Pecentof
Line Cost of Existing Proposed Cost of
!><>. Customer Class .smk< I!aJoa I!aJoa .smk<
$ $ $ %
Residential
I Single Family 14,711,100 13,836,600 14.755.300 100.3
2 Multi-Family 4,250.800 3,967,600 4.241,400 99,8
3 Mobile Homes 185,300 171,400 184,400 99,5
Non-Residential
4 Commercial (L) 1,825,700 1,780.400 1,824,200 99,9
5 Commercial (M) 388,800 330,100 389,600 100.2
6 Commercial (H) 797,700 707.700 798,900 100.2
7 Special Users 1,081,200 825,400 1,076,100 99,5
8 Total 23,240,600 21.619,200 23,269,900 100,1
Adoption of the proposed rates would cause varying charge increases for certain
users. Table 18 shows that the sample monthly bills for single family residential
customers for FY 05-06 through FY 09-10. The proposed charges shown include the
$0.70 Storm Drain Charge the proposed $1.97 Facilities Replacement Charge.
Column 1 is the winter period water usage. The average customer uses about 10 hcf.
Column 2 of Table 18 shows the monthly sewer bill for residential customers with
usage ranging from zero to 20 hcf under existing rates. With the current cap set at
15 hcf the column shows that usage levels above that quantity are not charged.
Column 3 shows what the wastewater bill would be effective July 1, 2005 under the
rates already adopted. The information in this column has been adjusted to reflect an
increase in the billing cap from 15 hcf to 20 hcf.
The fourth column indicates sewer bills based on adopted 2006 rates with adoption of
the Facilities Replacement Charge increase to $1.97 from the current level of $0.70.
Column 5 shows the charges under the rates proposed in this study. Comparing
Column 5 to Columns 4 it can be seen that all charges under the rates proposed in this
study would be lower than under the rates currently scheduled to go in effect
assuming adoption of the $1.97 Facilities Replacement Charge. The reason for that is
the lowering of the overall projected revenue increase from 9% to 7.5% and a more
equitable distribution of costs between fixed charges and variable charges as well as
customer classes.
Columns 6 through 9 indicated single family residential typical bills for FY 2007 to
FY 2010.
O:\USERlSaomhouwerlCllyla Vim. 200e RaporWe.dlw.dac
31
s::'I5
œlLll
Section 7
Rate Design
TABLE 18
COMPARISON OF TYPICAL SFR MONTHLY SEWER BILLS
(1) (2) (3) (4) (5) (6) (7) (8) (9)
FY2006
FY2006 Adopted FY2006 FY2007 FY2008 FY20Q9 FY2010
Existing Adopted Ratew/SI.97 Proposed Proposed Proposed Proposed Proposed
llim - Ra!tlU Rent Fee( ) Ra!tlU Ra!tlU Ra!tlU Ra!tlU Ra!tlU
hcÐ'mo. , , , , , , ,
0 7.20 1.45 8.72 8.47 8.47 9.00 9.25 9.75
1 9.19 9.60 10.87 10.6] 10.83 11.53 11.87 12.45
2 11.18 11.75 13.02 12.79 13.19 14.06 14.49 15.15
3 13.17 13.90 15.17 14.95 15.55 16.59 17.11 17.85
4 15.16 16.05 17.32 17.11 17.91 19.12 19.73 20.55
5 ]7.15 18.20 ]9.47 19.27 20.27 21.65 22.35 23.25
6 19.14 20.35 21.62 21.43 22.63 24.18 24.97 25.95
7 21.1] 22.50 23.77 23.59 24.99 26.71 27.59 28.65
8 23.12 24.65 25.92 25.75 27.35 29.24 30.21 31.35
9 25.11 26.80 28.07 27.91 29.71 31.77 32.83 34.05
10 27.10 28.95 30.22 30,07 ]2.07 34.30 35.45 36.75
11 29.09 31.10 32.37 32.23 34.43 36.83 38.07 39.45
12 31.08 33.25 34.52 34.39 36.79 39.36 40.69 42.15
13 33.07 35.40 36.67 36.55 39.15 41.89 43.31 44.85
14 35.06 37.55 38.82 38.71 41.51 44.42 45.93 47.55
15 37.05 39.70 40.97 40.87 43.87 46.95 48.55 50.25
16 37.05 41.85 43.12 43.03 46.23 49.48 51.17 52.95
17 37.05 44.00 45.27 45.19 48.59 52.01 53.79 55.65
18 37.05 46.15 47.42 47.35 50.95 54.54 56.41 58.35
19 37.05 48.30 49.57 49.51 53.31 57.07 59.03 61.05
20 37.05 50.45 51.72 51.67 55.67 59.60 61.65 63.75
O:\USER\8oomi'lD<!Wl nci'lull Villi 2005 Rlpal'tJ8-.:1itl.doc
32
5~.ÿ<þ
--
DRAFT
RESOLUTION NO. 2005-
-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA DECLARING CITY'S INTENTION TO
INCREASE SEWER SERVICE CHARGES AND SETTING A
PUBLIC HEARING TO CONSIDER SAID INCREASE FOR
JULY 12, 2005 AT 6:00 P,M,
WHEREAS, the sewer service fee is paid by all users who are connected to the City's
wastewater collection system; and
WHEREAS, revenues derived from this fee are used to fund the cost of wastewater
treatment, system maintenance and operation; and
WHEREAS, on July 22, 2003, the City Council approved a new sewer service rate
structure and a four-year rate plan for Fiscal Years 2004 through 2007; and
WHEREAS, the new rate structure primarily changed the billing method for single-
family residential users from a flat-fee structure to a consumption-based structure, utilizing the
customers' winter water usage ("winter average") as the basis ofthe rate; and
WHEREAS, after two-years, staff has verified that the "winter average" method is an
accurate technique to determine sewer service charges, but there were early indications that the
rate structure was not meeting the program's revenue objectives/needs; and
WHEREAS, based on the findings of a follow-up study conducted by a consultant, it was
determined that, over the long term, the existing rates would not generate the revenues needed to
meet the obligations of the sewer service-related funds (i.e. for wastewater treatment and system
operation and maintenance); and
WHEREAS, the adoption of the proposed sewer rate structure, set forth in Attachment A,
will ensure that the City recovers sufficient revenues to meet projected sewer-related
expenditures for Fiscal Years 2006 through 2010 - including reimbursements to the General
Fund for the maintenance and operation of the City's sewer collection and treatment system; and
WHEREAS, the "Proposed Monthly Service Charge" shown on Attachment A includes a
$0.70 storm drain fee, which is deposited into a separate fund, and will not be impacted by the
proposed rate changes to the sewer service fees.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista
does hereby declare the City's intention to increase and adjust sewer service fees and sets the date
for the public hearing to consider said increase/adjustment for July 12, 2005 at 6:00 p.m. in the
Council Chambers, City ofChula Vista, 276 Fourth Avenue, Chula Vista.
/
.5-~ '11
DRAFT
BE IT FURTHER RESOLVED that the City Clerk is hereby directed to advertise said
public hearing in a newspaper of general circulation at least ten (10) days prior to the public
hearing.
BE IT FURTHER RESOLVED that staff is hereby directed to provide notice by mail at
least 45 days prior to the public hearing to all property owners who may be impacted by the fee
Increases,
Presented by
Approved as to form by
D~ ( . (-tc
Alex AI-Agha
City Engineer
Ann Moore
City Attorney
\attorney\reso\sewerlintention to increase sewer fees OJ.doc
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