COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

 

DATE:

July 12, 2010

BOARD MEETING DATE:

July 27, 2010

SPECIAL NOTICE/HEARING:

Complied with Publication Requirements

VOTE REQUIRED:

Majority

 

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

Adoption of Proposed Sewer Service Rates and Fiscal Year 2010-11 Sewer Service Charges Report for the Ten County Sewer/Sanitation Districts Governed by the Board of Supervisors

 

RECOMMENDATION:

Acting as the governing board of the ten County Sewer/Sanitation Districts and after conducting the public hearing:

 

A.

Adopt an ordinance to amend Section 4.32.020 of Chapter 4.32 of Title 4, of the San Mateo County Ordinance Code, setting sewer service rates for fiscal years 2010-11 and 2011-12 for the Burlingame Hills Sewer Maintenance District and fiscal year 2010-11 for the Crystal Springs County Sanitation District; and

   

B.

Adopt a resolution:

   
 

1.

Authorizing the imposition of sewer service charges for FY 2010-11; and

     
 

2.

Directing the filing of the FY 2010-11 Sewer Service Charges Report for the ten County Sewer/Sanitation Districts with the Controller; and

     
 

3.

Authorizing the Director of Public Works to refund any overcharge contained in the Sewer Service Charges Report to the owner of the parcel that was overcharged when the overcharge resulted from data, data entry or computation errors.

 

BACKGROUND

The Board of Supervisors adopted five-year rates for the other eight districts in 2007.  However, Crystal Springs County Sanitation District (CSCSD) and the Burlingame Hills Sewer Maintenance District (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 proposed rates for BHSMD and CSCSD as we continue to explore strategies that will lead to reasonable long-term rates to address the needs of the districts.

 

Your Board adopted Resolution No. 070810 on June 8, 2010, which set 9:30 a.m. on July 27, 2010, in your Chambers as the time and place for a public hearing to consider the sewer service rates for the BHSMD and the CSCSD and the filing of the FY 2010-11 Sewer Service Charges Report for the ten County Sewer/Sanitation Districts (Districts), and directed the Director of Public Works to send the necessary notices for said hearing.

 

DISCUSSION

The 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.

 

Our June 8, 2010 staff report (copy attached) explained the need for the sewer rate increase for the BHSMD and CSCSD, and adoption of the Sewer Service Charges Report based on the adopted sewer service rates. 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 rates and charges for each specific property, the reason for the charges, and the time, place, and date when your Board would consider the proposed rates and charges. The purpose of the public hearing is to allow your Board to hear and consider any objections and written protests to the sewer service rates for the BHSMD and CSCSD and the Sewer Service Charges Report based on the adopted rates.

 
Public Input Process:

At your direction, the Department has been meeting with a group of representatives from the BHSMD and the CSCSD. 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 be set for two fiscal years for the BHSMD and one fiscal year for the CSCSD, while district specific financial requirements continue to be discussed and other issues become known.

 

The Department sent two mailings to all property owners in the BHSMD and the CSCSD. The first mailing provided information about the evening public meetings, which were held in May 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 June 8, 2010, 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 and the CSCSD 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 rates for the BHSMD, but has received five (5) written protests to the proposed rates 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.

 
Process to be Followed in Implementing Increases in the Sewer Service Rates for the BHSMD and the CSCSD, and adopting the Sewer Service Charges Report for FY 2010-11:

1.

    Hold a public hearing and receive testimony on (1) increasing the sewer service rates for BHSMD and CSCSD and (2) imposing the Sewer Service Charges for all ten districts calculated on the basis of the adopted sewer service rates.

 

2.

After considering all written and oral objections to the sewer service rates for the BHSMD and the CSCSD and charges for all ten districts, 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 2010-11 at the same sewer service rate in effect for FY 2009-10, and direct staff to recalculate the Sewer Service Charges for that district.

 

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 sewer service rates for fiscal years 2010-11 and 2011-12 for the BHSMD and fiscal year 2010-11 for the CSCSD.

 

5.

Adopt a Resolution authorizing the imposition of sewer service charges for FY 2010-11, and authorizing the filing of the FY 2010-11 Sewer Service Charges Report for the Districts with the Controller.

 

Alternates 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 the CSCSD incurred expenses that could not be financed based on the adopted rate. Additional impacts to the BHSMD and the 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 both districts.

 

We believe the recommended Sewer Service Charges are appropriate as they have been calculated in conformance with the proposed sewer service rates and previously adopted sewer service rates, provide the funding necessary to maintain the collection systems of the Districts, allow the Districts to meet their contractual commitments and meet the most recent State mandates.

 
Future Meetings with the BHSMD and the CSCSD Homeowner Association Representatives

The Department will continue conducting meetings with the committees comprised of homeowner association representatives in the BHSMD and the 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.

 

County Counsel has reviewed and approved the Resolution as to form, and we will provide an alternate form of resolution if there is a majority protest in either the BHSMD or CSCSD.

 

Your Board’s adoption of the Sewer Service Charges Report contributes to the Shared Vision 2025 outcome of a Healthy Community by providing revenue to the ten (10) sewer districts and allow for uninterrupted service to district customers.

 

FISCAL IMPACT

The following are the current and proposed sewer service rates for the BHSMD and the CSCSD:

 

District

Sewer Service Rates
($/Year Per Residential Unit Equivalent)

FY 2009-10

FY 2010-11

FY 2011-12

Burlingame Hills Sewer Maintenance District

$1,150

$1,350

$1,500

Crystal Springs County Sanitation District

$1,000

$1,200

To be evaluated during 2010-11

 

The adoption of the FY 2010-11 Sewer Service Charges Report and its electronic filing with the Controller will result in the user charges contained therein being placed on the tax roll. The charges will appear on the FY 2010-11 tax bill of each affected property and be collected in the same manner as the property tax.

 

There is no direct impact to the General Fund. However, sewer service charges are levied on properties that are either leased or owned by the County that are in the Districts and which are provided sewer service.

 

Attachment:

June 8, 2010 Board Report