File #: 2023-2807    Version: 1 Name:
Type: Non-Consent Status: Passed
File created: 2/9/2023 In control: ADMINISTRATION COMMITTEE
On agenda: 2/22/2023 Final action: 2/22/2023
Title: PROPOSED ORDINANCE ADOPTING CAPITAL FACILITIES CAPACITY CHARGES
Sponsors: Lorenzo Tyner
Attachments: 1. Agenda Report, 2. Capacity Charge Ordinance (Redlined), 3. Capacity Charge Ordinance (Clean)
Related files: 2023-2734, 2023-2840, 2024-3547

FROM:                     Robert Thompson, General Manager

                     Originator: Lorenzo Tyner, Assistant General Manager 

 

SUBJECT:

 

title

PROPOSED ORDINANCE ADOPTING CAPITAL FACILITIES CAPACITY CHARGES

end

 

GENERAL MANAGER'S RECOMMENDATION

 

recommendation

RECOMMENDATION: 

A.       Motion to read Ordinance No. OC SAN-59 by title only and waive reading of said entire Ordinance;

 

B.       Introduce Ordinance No. OC SAN-59 entitled, “An Ordinance of the Board of the Orange County Sanitation District Adopting Capital Facilities Capacity Charges, and Repealing Ordinance No. OCSD-57”; and

 

C.       Set March 22, 2023 as the date of the Public Hearing to hear protests and for the second reading of Ordinance No. OC SAN-59.

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BACKGROUND

 

The Capital Facilities Capacity Charge (CFCC) is a one-time, non-discriminatory charge imposed at the time a building or structure is newly connected to Orange County Sanitation District’s (OC San) system, or an existing structure is expanded or increased.  This charge is to pay a portion of the capacity costs and for access to capacity in the system.  Based upon the rate study conducted by HDR Engineering, Inc., the Facilities Master Plan, forecasted operating expenses, and cash flow modeling, staff recommends the 3-bedroom base rate for the residential CFCC remain unchanged for Fiscal Year (FY) 2023-24 at $5,719 and will adjust by the Engineering News Record Construction Cost Index each year thereafter.

 

The non-residential CFCC schedule for FY 2023-24 will decrease by 33% and will adjust by the Engineering News Record Construction Cost Index each year thereafter.

 

Use Category

FY 2023-24*

Low Demand

$  242

Average Demand

$1,485

High Demand

$3,521

 

*per thousand square feet

 

The Supplemental Capital Facilities Capacity Charges (SCFCC) are fees to Industrial Permittees that exceed their annual baselines for Flow, Biochemical Oxygen Demand (BOD), and Total Suspended Solids (TSS).  Flow and BOD will adjust by the Engineering News Record Construction Cost Index each year after FY 2023-24.  The schedule for TSS is below.

 

 

FY 2023-24

FY 2024-25

FY 2025-26

FY 2026-27

FY 2027-28

FLOW

$0.002140

ENR

ENR

ENR

ENR

BOD

$0.500630

ENR

ENR

ENR

ENR

TSS

$0.303640

$0.336440

$0.369240

$0.402040

$0.434930

 

FLOW - Gallons Per Day

BOD - Pounds Per Day

TSS - Pounds Per Day

 

RELEVANT STANDARDS

 

                     Stable rates, no large unforeseen rate increases

 

PROBLEM

 

OC San’s Board of Directors approved a five-year rate schedule for Capital Facilities Capacity Charges which expires at the end of the current fiscal year.

 

PROPOSED SOLUTION

 

Adopt an Ordinance with updated fee schedules based upon the 2022 Rate Study performed by HDR Engineering, Inc. and received and filed by the Board in December 2022.

 

TIMING CONCERNS

 

February 22, 2023 - First Reading of the Ordinance

March 22, 2023 - Public Hearing, Second Reading, and Adoption of the Ordinance

July 1, 2023 - Ordinance takes effect

 

RAMIFICATIONS OF NOT TAKING ACTION

 

Revenues will be insufficient to support the Facilities Master Plan adopted in December 2017.

 

PRIOR COMMITTEE/BOARD ACTIONS

 

December 2022 - Received and filed the Orange County Sanitation District’s 2022 Wastewater Rates, Fees, and Charges Study completed by HDR Engineering, Inc.

 

July 2021 - Adopted Ordinance No. OCSD-57.

 

December 2017 - Approved the 2017 Facilities Master Plan and Rate Study.

 

ADDITIONAL INFORMATION

 

To ensure the appropriate allocation of costs and fees, OC San engaged an engineering consulting firm, HDR Engineering, Inc., to provide an independent analysis of OC San’s cash flow modeling and a cost of service study.  The study demonstrates that OC San’s proposed fees are appropriate and reasonable and will support its projected capital and operating requirements.

 

CEQA

 

N/A

 

FINANCIAL CONSIDERATIONS

 

This request complies with authority levels of OC San’s Purchasing Ordinance.  This item has been budgeted.

 

ATTACHMENT

The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package:

 

                     Ordinance No. OC SAN-59 (Redlined)

                     Ordinance No. OC SAN-59 (Clean)