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HomeMy WebLinkAbout1994-02-09; Municipal Water District; 0223.07; Changing & Setting Water Major Facilities Fees\B # 0223.7 ATG. IEPT. w- APPROVAL OF CHANGING THE METHOD OF CHANGING AND SE'ITING WATER MAJOR 02/09/94 FACILITIES FEES IECOMMENDED ACTION: DEPT. HD. pa CITY ATTY ___ CITY MGR. ~ Recommend Board of Directors approve resolution to change the method of changing and setting the water Major Facilities Fee. ITEM EXPLANATION: The current major facilities fee is charged according to the number of EDUs for a particular development,building, or home. This fee is used to fund improvements or expansion to the water system due to growth. Because some businesses or water uses (such as irrigation) do not have equivalent dwelling units, they do not pay a MFF. Staff is recommending that the MFF should be based on meter size rather than on number of EDUs in order to resolve this inequity. For further information see the attached agenda biU CARLSBAD MUNICIPAL WATER DISTRICT - AGENDA BILL IDEPT. HD. Rf& \B # I TITLE: HOLD PUBLIC HEARING FOR APPROVAL OF z 0 F 0 a n K a IITG. 3/1 194 IEPT. CMWD I CHANGING THE METHOD OF CHARGING AND SElTlNG THE WATER MAJOR FACILITIES FEE I CITY ATTY CITY MGR. ~ ECOMMENDED ACTION: Hold a public hearing and adopt Resolution No. of charging and setting the water major facilities fee. for approval of changing the method ITEM EXPLANATION: The Board of Directors of the Carlsbad Municipal Water District established a Major Facilities Fee in 1983 based on an equivalent dwelling unit (EDU). These revenues pay for new facilities needed to satisfy the additional demands new development places upon the water system. These types of projects usually include new reservoirs and the installation or enlargement of water lines. It has become evident that calculating the fee based on EDUs should be reconsidered. All neighboring agencies and most county agencies, including the San Diego County Water Authority (for which the District collects fees), charge fees which are based on meter size (see Exhibit 1). Basing the fee on EDUs, the same method to calculate sewer fees, has created a problem wherein a large water user such as a golf driving range with a large meter creating a high demand pays no fee or a very small fee; whereas a large warehouse with a small meter and no landscaping pays a much larger fee. This is because the warehouse EDU calculation is based on a square footage calculation and not on a water demand or usage figure. The golf driving range, if there is no building, does not qualify as having an EDU classification and therefore, would not pay a major facilities fee at all. If the driving range has a small building with a refreshment area and bathrooms, it would pay a major facilities fee based on one EDU. Calculating the charge on water usage or water demand through the meter size required by new construction is more appropriate. The District designates meter sizes as a result of the projected water consumption of a particular development, building, business or lot size. If the customer or developer requires a certain water flow per minute, the appropriate size meter will be installed. Because a water-intensive business with a two-inch meter will increase the demand on the District's water system and make a far greater impact on that system than a 14,500 square-foot warehouse with two bathrooms and a 518" meter, that business should contribute more to the development of new facilities to match that demand. Equating the EDU fee to meter size can be done by comparing one EDU (a single-family house) to a 5/8-inch meter that serves a single-family house. The other meter costs will be prorated by capacity of the meter as shown below: 5/am 314n 1" 1 1/2" 2" 3" 4" 6" 8" 20 gallons per minute 30 gallons per minute 50 gallons per minute 100 gallons per minute 160 gallons per minute 350 gallons per minute 600 gallons per minute 1250 gallons per minute 2000 gallons per minute $2,400 $3,600 $6,000 $1 2,000 $1 9,200 $42,000 $72,000 $1 50,000 $240,000 Page 2 of Agenda Bill No. The effect that this new system will have on the different classifications of District customers varies according to water demand. The major facilities fee for a single-family home with a 5/8' meter will remain the same. However, an agricultural or irrigation customer (generally business park or homeowners association landscaping meters) will be paying a major facilities fee based on meter size whereas they were not paying any fee previously. Both of these customer classifications have a large impact on the water system. A multi-family residential structure, however, will pay significantly lower fees if the building houses more than eight dwelling units and requests a two-inch meter. With the previous EDU-based system, a ten-unit apartment complex would pay $2,400 per EDU, which, in this case, would be ten EDUs. The total fee would be $24,000. Under the proposed, meter-based system, the fee for this same complex would be $1 9,200. As the number of dwelling units served by one meter increases, the major facilities fee expense would be reduced. FISCAL IMPACT: Major facilities fees are used to fund system improvements and expansion due to growth. Those customers causing an additional demand on the system should pay according to how great their demand will be. The proposed method of charging major facilities fees according to water meter size rather than on number of EDUs will not have an effect on the revenue collected for the District's Capital Improvement Program. Utilizing this new fee structure will continue to generate the needed funds (approximately $50 million) until build out of the City. Where the District would have generated higher fees in one instance but lower fees using the EDU-based system (such as multi-family), it will collect higher fees from those developments and customers which were not previously required to pay a fee at all (such as irrigation). A vital component of the proposed fee structure is the annual review. This analysis will reveal if the current charges are meeting the level of funding required to proceed with the Capital Improvement Program. If not, then the fees must be increased accordingly; if too much revenue is being generated, then the fee must be reduced. The analysis will involve calculating the fees collected to date and subtracting them from the required revenue needed to fund the CIP. The District is planning to do a rate study in fiscal year 1994-95, which will include a study of the major facilities fee to determine if this fee is still in line with the CIP. ENVIRONMENTAL REVIEW: The District is exempt from the environmental review process in this instance, because an environmental review is not required when setting rates, tolls or fares. EXHl BITS: 1. Survey of Major Facilities Fees charged by other agencies. 2. Resolution No. for approval of changing the method of charging and setting the Major Facilities Fees. 3. Memo from Administrative Manager to Financial Management Director. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT, CARLSBAD, CALIFORNIA, FOR APPROVAL OF CHANGING THE METHOD OF CHARGING AND SElTING THE WATER MAJOR FACILITIES FEES WHEREAS, the Board of Directors of the Carlsbad Municipal Water District has the authority to establish fees for District services and has determined that it would be in the best interests of the inhabitants of the Carlsbad Municipal Water District and the citizens of the City of Carlsbad located within the Carlsbad Municipal Water District, to change the method of charging and setting the water major facilities fees; and WHEREAS, from time to time said fees are reviewed and evaluated to maintain an adequate fee structure to recover costs for District services; and WHEREAS, the Board of Directors finds it necessary to recover the costs for water-related development services; and WHEREAS, the staff conducted a study of neighboring agencies’ and most county agencies’ fee structures, including the San Diego County Water Authority for which the District collects its fees, and determined the majority of fees are based on meter size; and the staff has found basing the fees on Equivalent Dwelling Units has created situations whereby inequities may exist because the EDU calculation is based on a square footage calculation and not on water demand or usage; and basing the charge on water usage or water demand through the proper meter size is more appropriate; and WHEREAS, equating the Equivalent Dwelling Unit fee to meter size can be done by comparing one Equivalent Dwelling Unit (a single-family house) to a 5/8-inch meter that serves a single-family house, and other meter costs will be prorated by capacity of the meter as shown in Exhibit A attached hereto; and WHEREAS, the Board of Directors has determined that the fees shown in Exhibit A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 22 24 25 26 27 28 attached hereto are fair and reasonable in reaction to the services received; and WHEREAS, the Board of Directors has held the necessary public hearing and allowed for public comment of the establishment of said fee. NOW, THEREFORE, BE IT RESOLVED that the Major Facilities Fee, as established by Resolution No. 810, is superseded by the fee schedule in Exhibit A attached hereto and is hereby adopted and shall become the official fee schedule for water-related development services for the Carlsbad Municipal Water District EFFECTIVE DATE: This resolution shall be effective sixty (60) days after its adoption. PASSED, APPROVED AND ADOPTED at a special meeting of the Board of Directors of , 1893, by the the Carlsbad Municipal Water District on this following vote, to wit: AYES: NOES: ABSENT day of CLAUDE A. LEWIS, President ATTEST: ALETHA RAUTENKRANZ, Secretary (SEAL) EXHIBIT A 1 SCHEDULE OF FEES FOR WATER MAJOR FACILITIES FEE Meter Size 518' 314' 1" 1 112' 2" 3" 4' 6' 8" Maximum Capacity 20 gallons per minute 30 gallons per minute 50 gallons per minute 100 gallons per minute 160 gallons per minute 350 gallons per minute 600 gallons per minute 1250 gallons per minute 2000 gallons per minute MFF - $2,400 $3,600 $6,000 $1 2,000 $1 9,200 $42,000 $72,000 $1 50,000 $240,000 SURVEY OF MAJOR FACILITIES FEES CHARGEDBYOTHERAGENCIES Meter Size City of Del Mar City of Encinitas City of Escondido" Fallbrook Public Utility District Olivenhain Municipal Water District Vallecitos Water District - 5/8" $1,620 N/A $4,380 N/A $2,445 $1,900 - 3l4" $1,620 $2,000 $4,380 $2,200 $3,490 $2,850 All of the above agencies charge the major facilities fee based on meter size. It should be noted that each of these agencies establishes its fee according to its Capital Improvement Program and, therefore, the charges will differ to correspond with the amount of funds needed for the CIP. *The City of Escondido charges a flat rate for all meter sizes.