COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

April 9, 2009

BOARD MEETING DATE:

April 28, 2009

SPECIAL NOTICE/HEARING:

Complied with Required Notification

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

Adoption of Proposed Sewer Service Rates for the Ten County Sewer/Sanitation Districts Governed by the Board of Supervisors

RECOMMENDATION

Acting as the governing board of the ten (10) County Sewer/Sanitation Districts, adopt an ordinance amending Section 4.32.020 of Chapter 4.32 of Title 4, of the San Mateo County Ordinance Code increasing the FY 2009-10 sewer service rates for the Burlingame Hills Sewer Maintenance District (BHSMD) and the Crystal Springs County Sanitation District (CSCSD).

VISION ALIGNMENT

Commitment: Ensure basic health and safety for all.

Goal 7: Maintain and enhance the public safety for all residents and visitors.

Increasing the sewer service rates for FY 2009-10 will provide revenue to the BHSMD and CSCSD and allow for uninterrupted service to customers.

BACKGROUND

The Board of Supervisors adopted five-year rates for the other eight districts in 2007.  However, CSCSD and BHSMD presented majority protests in 2006 and 2007, respectively, which led to the inability to raise rates, and a commitment to meet with a group of representatives from the BHSMD and the CSCSD to explore long-term solutions. Progress has been made, and discussions are ongoing.  Therefore, it is appropriate to set the rates for these two districts on a year-to-year basis as we continue to explore strategies that will lead to reasonable long-term rates to address the needs of the districts.

More recently, your Board adopted Resolution No. 069945 on March 3, 2009, setting 9:00 A.M. on April 28, 2009, in your Chambers as the time and place for a public hearing to consider the sewer service rates for the BHSMD and the CSCSD.

History:

The ten (10) County Sewer/Sanitation Districts governed by your Board currently provide sanitary sewage collection, transport, treatment and disposal services as well as ancillary field and office services to approximately 12,000 residences, businesses, schools, and institutions in ten (10) areas of San Mateo County. Virtually all of the revenue to provide these services in each district is generated by a user fee, the sewer service charge based on the sewer service rate.

DISCUSSION

Our March 3, 2009 staff report (copy attached) explained the need for the sewer service rate increases for the BHSMD and the CSCSD. The report also described the proposed process to be followed pursuant to the County Ordinance Code.

Notices were sent to the property owners of the approximately 1,900 parcels in BHSMD and CSCSD informing them of the proposed sewer service rates and the time, place, and date when your Board would consider the proposed rates. The purpose of the public hearing is to allow your Board to hear and consider any objections and written protests to the sewer service rate for the BHSMD and the CSCSD.

Public Input Process:

At your direction, the Department has been meeting with a group of representatives from the BHSMD and the CSCSD during the current fiscal year to determine sewer service rates for the FY 2009-10. The proposed sewer service rates for these districts were determined through the meetings and based on the recognition that both districts face potentially significant issues that will have financial impacts to the districts. It is recommended that the sewer service rates for both districts be set for one year while district specific financial requirements continue to be discussed and other issues become known.

The Department sent two mailings to all property owners in BHSMD and CSCSD. The first mailing provided information about the evening public meetings which were held in January for each district to discuss the proposed rates, convey information about the meetings the Department has had with representatives from the districts, and to obtain input regarding the proposed rates. After the Board meeting on March 3, 2009, the Department sent a second mailing to each property owner in both districts with the proposed rates and information about the time and place of the Public Hearing. The second mailing for the BHSMD complied with Article XIIIC and XIIID of the State Constitution by individually noticing each property owner of record of the proposed increase in the property related fee and a mechanism for rejecting the fees via a “majority protest” at the public hearing.

The Department has not received any written protests to the proposed FY 2009-10 rate for the BHSMD and has received 3 written protests to the proposed FY 2009-10 rate for the CSCSD at the time this report was prepared. We will report to your Board on any written protests that are received up to and including the date and time of the public hearing.

The Process for Adopting an Ordinance Amending Section 4.32.020 of Chapter 4.32 of Title 4, of the San Mateo County Ordinance Code:

1.

Hold a public hearing and receive testimony on increasing the sewer service rates for FY 2009-10 for the BHSMD and the CSCSD.

2.

After considering all written and oral objections to the sewer service rates for BHSMD and CSCSD, close the public hearing and determine if there is a majority protest to the proposed sewer service rates in the BHSMD and the CSCSD.

3.

If there is a majority protest in either district, terminate your consideration of imposing a sewer service rate increase in that district and set the sewer service rate for FY 2009-10 at the same sewer service rate in affect for FY 2008-09.

4.

If there is not a successful majority protest, adopt the ordinance amending Section 4.32.020 of Chapter 4.32 of Title 4, of the San Mateo County Ordinance Code increasing the FY 2009-10 sewer service rates for the BHSMD and the CSCSD.

Alternate to Consider:

After the close of the hearing, if there is not a majority protest in either district, your Board can reduce the sewer service rates as you may determine appropriate for the BHSMD and the CSCSD. However, a source of funding, such as a loan, would need to be found if the BHSMD and CSCSD incurred expenses that could not be financed based on the adopted rate. Additional impacts to the BHSMD and CSCSD could include reduced maintenance; deferred capital improvements; or the BHSMD and the CSCSD not meeting State mandates that can result in possible fines against the both districts.

Future Meetings with the BHSMD and CSCSD Homeowner Association Representatives:

The Department will continue conducting meetings with the committees comprised of homeowner association representatives in the BHSMD and CSCSD to develop rate structures for the future that will adequately support the financial requirements of the districts or determine whether other options for providing sewer service are available to the districts. Both districts face the financial challenges of paying their proportionate share of past and future downstream capital improvement projects and the uncertainties associated with issues affecting both districts.

The Ordinance has been approved as to form by County Counsel.

FISCAL IMPACT

There is no direct impact to the General Fund.

Attachment:

March 3, 2009 Board Report