COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

 

DATE:

May 18, 2011

BOARD MEETING DATE:

June 7, 2011

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

 

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

Sewer Service Rates and Charges 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:

   

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 rate for fiscal year 2011-12 for the Burlingame Hills Sewer Maintenance District and setting the fiscal year 2011-12 sewer service rate at the same level as the fiscal year 2010-11 rate for the Crystal Springs County Sanitation District; and

 

B.

Adopt a Resolution setting Tuesday, July 26, 2011 at 9:00 A.M. at your regularly scheduled Board meeting, as time and place for a public hearing on:

 
 

1.

The sewer service rate increase for the Burlingame Hills Sewer Maintenance District; and

 
 

2.

Filing of the sewer service charges report for fiscal year 2011-12 for the ten county sewer maintenance and sanitation districts based on the sewer service rates set for fiscal year 2011-12; and

 
 

3.

Directing the necessary notices for said hearing.

 

BACKGROUND:

Sewer service charges are collected on the property tax bill. The charges are based on sewer service rates approved by your Board.

 

In 2007, your Board approved the sewer service rates for eight (8) of the ten (10) districts (Districts) for five (5) fiscal years (FY) beginning in FY 2007-08 to FY 2011-12. However, sewer service rates for the Burlingame Hills Sewer Maintenance District (BHSMD) and the Crystal Springs County Sanitation District (CSCSD) were set for only one year. At your Board’s direction, the Department has been working with homeowner association representatives from the BHSMD and the CSCSD to address the issues specific to these districts and sewer service rates have been set annually due to the uncertainty of funding required to maintain and operate both districts and the successful majority protests from each district (CSCSD in 2006 and BHSMD in 2007 and 2010).

 

In 2010, your Board increased the sewer service rate for FY 2010-11 for the CSCSD and set the rates for the FY 2010-11 for the eight Districts as previously set by Ordinance No. 04382, which was adopted on August 7, 2007. However, your Board did not increase the sewer service rate for the BHSMD for the FY 2010-11 due to a majority protest.

 

Based on the recommendations from staff and representatives of the homeowner associations, we are proposing that the FY 2011-12 sewer service rates be set at $1,595 per year per residential unit equivalent for BHSMD and $1,200 per year per residential unit equivalent for CSCSD. We have evaluated the sewer service charges for these districts and developed the proposed rates to finance:

 

1.

Continued routine and emergency maintenance (operation and maintenance).

 

2.

Cost for sewage treatment and disposal.

 

3.

The cost to comply with State and Federal Regulations (required reporting, development of Sewer System Management Plans [SSMP], on-going television inspection of the sewer systems, spot repairs identified through the television inspections, and acquisition or replacement of equipment used to maintain and repair the sewer systems).

 

4.

The cost to obtain low interest State Revolving Fund (SRF) loans to implement capital improvement projects to increase the size of sewer mains where capacity is insufficient, and to rehabilitate or replace structurally damaged sewer mains. The recommended rates will meet SRF loan debt service coverage requirements for BHSMD and CSCSD capital improvement projects.

 

5.

Payments pursuant to existing agency agreements for costs associated with downstream system or facility improvements and upgrades.

 

6.

The cost to the BHSMD associated with meeting the requirements of the Baykeeper/City of Burlingame and Baykeeper/BHSMD Consent Decrees. The consent decree between the BHSMD and Baykeeper became effective on June 25, 2009 and requires implementation of several specific projects and programs within certain timelines. The consent decree is effective for 6 years and is expected to cost the BHSMD over $350,000 (an average of approximately $270 per residential unit equivalent per year) by the end of FY 2011-12.

 

7.

The anticipated costs associated with the Cease and Desist Order that the San Francisco Bay Regional Water Quality Control Board (Regional Water Board) issued to the CSCSD, Town of Hillsborough, and the City of San Mateo on March 11, 2009, which required the agencies to conduct studies, reporting, and implement capital improvement projects in the CSCSD and the downstream agencies.

 

State and Federal Regulations Regarding Sanitary Sewer Overflows from Sewer Collection Systems

The Districts governed by your Board serve approximately 12,200 properties and finance the operation and maintenance of approximately 150 miles of sewer mains as well as the cost of treating the sewage collected by the Districts. The operation of the Districts’ sewer collection systems is regulated by the Regional Water Board, the State Water Resources Control Board (State Water Board), and the Environmental Protection Agency (EPA) pursuant to the Federal Clean Water Act.

 

Sanitary Sewer Overflows (SSO) from sewer collection systems contain domestic, commercial, or industrial sewage. SSO’s can pollute surface or ground waters, threaten public health, adversely affect aquatic life, and impair the recreational use and aesthetic enjoyment of surface waters. Sewer main blockages that result in SSO’s can also create sewage back ups into houses causing property damage and creating a public health hazard to those who come in contact with the untreated sewage. As of May 2, 2007 the Districts have been required to report all SSOs within specific timeframes to the State Water Board’s electronic reporting system, a publicly accessible website. Effective February 20, 2008 the Districts have been required to report any SSO that reaches surface waters (creek, bay, ocean, storm drainage system, etc.) to the State Office of Emergency Services, the Regional Water Board, and the County Environmental Health Department within two hours of becoming aware of the SSO. Reporting requirements have continued to increase and require significant staff time. The Districts must also report information on all SSO’s annually to the Regional Water Board.

 

Both the Regional Water Board and the State Water Board have implemented requirements that all sanitary sewer collection system agencies prepare SSMP pursuant to Sections 13263 and 13267 of the California Water Code. The SSMP includes several elements that were required to be completed by August 2008 and must be updated regularly. The SSMP describes the activities each sewer/sanitation district will employ to manage their wastewater collection systems effectively.

 

The State Water Board adopted Statewide General Waste Discharge Requirements (WDR) for Wastewater Collection Agencies on May 2, 2006. The WDR established monitoring and reporting requirements as well as SSMP requirements and timelines. All federal and state agencies, municipalities, counties, districts, and other public entities that own or operate sanitary sewer systems greater than one mile in length are required to comply with the WDR.

 

DISCUSSION:

Public Input Process

Staff has continued to meet regularly with a group of representatives from the Burlingame Hills Improvement Association (BHIA), the homeowner association in the BHSMD, since November 2007 to discuss future sewer service rates for the BHSMD and issues specific to their District. Representatives of the BHIA have studied the BHSMD’s financial situation in depth and understand the importance and the need for significant sewer service rate increases in order to operate the BHSMD and meet its financial obligations. The proposed rate of $1,595 will help replenish the fund reserve of the BHSMD since the increase proposed for FY 2010-11 was not implemented due to a majority protest last year. The President of the BHIA has and will continue outreach to the community and believes he has support from the property owners for the proposed rate increase. Staff will continue to meet and work with the BHIA to provide status updates and develop future rates for the BHSMD as there are uncertainties regarding future District costs which include: revising the existing Agreement between City of Burlingame and the BHSMD, anticipated capital improvements of the downstream collection system and work at the Burlingame treatment plant, and meeting the requirements of the Consent Decrees. These issues will continue to have a direct financial impact on the BHSMD.

 

Staff also has continued to meet with representatives from the five homeowners associations (HOAs) in the CSCSD on a regular basis since September 2007 to discuss future sewer service rates. The FY 2011-12 sewer service rate for CSCSD is proposed to remain at the current rate of $1,200 per year per residential unit equivalent. This rate would provide an adequate source of revenue for FY 2011-12, assuming that the District is able to obtain a 20-year loan from the SRF to finance the proposed CSCSD capital improvement projects required by the Cease and Desist Order. The CSCSD faces some uncertainties regarding future costs which may affect future rates and include: anticipated cost of work at the treatment plant and on the downstream collection systems, financial arrangements for the existing debt, and the financial impacts of the requirements of the Cease and Desist Order from the Regional Water Board. The resolution of these issues will have a direct financial impact on the CSCSD. The HOA representatives and District staff believe it is prudent to continue to discuss future rates during the next fiscal year and as the outcome of these issues become known.

 

The Department will continue to meet with the representatives from the BHSMD and the CSCSD on an as needed basis during FY 2011-12 to discuss future sewer service rates and develop a rate structure as the outstanding issues mentioned previously are being resolved.

 

The Department coordinated with the BHIA in communicating with the property owners in the BHSMD and participated in an evening public meeting to discuss the proposed sewer rate.

 

Process to be Followed in Implementing Increase in the Sewer Service Rate for the BHSMD, setting the Sewer Service Rate for FY 2011-12 for the CSCSD, and adopting the Sewer Service Charges Report for FY 2011-12

The County Ordinance Code provides that sewer service charges for the Districts be collected on the tax roll. Your Board will consider adoption of a sewer service charges report prior to August 10, 2011 (the deadline for supplying the Assessor’s Office with this information) to place the sewer service charges on the tax roll for FY 2011-12.

 

Your Board is being asked to take the following actions to increase the sewer service rate in the BHSMD and set the sewer service rate in the CSCSD:

 

1.

Amend the Ordinance Code to:

   
 

a)

Set the FY 2011-12 sewer service rate used to calculate the sewer service charge fee for each property within the BHSMD at $1,595 per year per residential unit equivalent.

   
 

b)

Set the FY 2011-12 sewer service rate used to calculate the sewer service charge fee for each property within the CSCSD at $1,200 per year per residential unit.

 

2.

Second reading and adoption of Amended Ordinance on July 26, 2011 setting sewer service rates for FY 2011-12 for the BHSMD and the CSCCD.

   

3.

Hold a public hearing and receive testimony on (1) the sewer service rate for the BHSMD and (2) the Sewer Service Charges calculated based on the adopted sewer service rates.

 

4.

After considering all written and oral objections to the sewer service rate for the BHSMD and charges for all ten (10) Districts, close the public hearing and determine if there is a majority protest to the proposed sewer service rate in the BHSMD.

   

5.

If there is a majority protest in the BHSMD, terminate your consideration of imposing a sewer service rate increase in the BHSMD and set the sewer service rate for FY 2011-12 at the same sewer service rate in effect for FY 2010-11.

   

In addition, Article XIIIC and XIIID of the State Constitution requires an individual notice of the hearing to consider any new or increased property related fees including sewer fees, and a mechanism for rejecting the fees via a “majority protest” at the public hearing. We are recommending that your Board direct us to notify each property owner within the BHSMD of the proposed annual sewer service rate and charges by mail and to explain that protests to the sewer service rate must be in writing.

 

Individual notice to property owners in the CSCSD is not required, as the sewer service rate is not proposed to increase. Sewer service rates for the other eight districts are being set consistent with the previously adopted sewer service rates; therefore, individual notice to property owners in these districts is also not required.

 

County Counsel has reviewed and approved an Ordinance and Resolution as to form.

 

Your Board’s setting of the sewer service fees for FY 2011-12 contributes to the Shared Vision 2025 outcome of a Healthy Community by providing revenue to the ten (10) sewer districts and allowing 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 2010-11

FY 2011-12

Burlingame Hills Sewer Maintenance District

$1,150

$1,595

Crystal Springs County Sanitation District

$1,200

$1,200

 

We estimate that it will cost approximately $900 ($2 per rate payer in the BHSMD) to prepare, print and mail individual notices to each rate payer in the BHSMD. This cost will be paid from the revenue of BHSMD.

 

There is no impact on the General Fund.