HomeMy WebLinkAboutStaff Report 4.E 12/01/2014DATE:
TO:
Ie] LVA
December 1, 2014
Honorable Mayor and Members of the City Council through City Manager
Dan St. John, F.ASCE — Director, Public Works and Utilities
Leah Walker — Enviromnental Services Manager
SUBJECT: Resolution Amending the Current Wastewater Capacity Fee Resolution for New
Development in the City of Petaluma, Resolution No. 2014-041 N.C.S., Adopted
March 3, 2014 to Add Provisions Governing Time for Fee Payment,
Reconciliation, Allowance for Non -Residential User Relocation Credit and Other
Matters; and Resolution Establishing Administrative Guidelines Pursuant to
Petaluma Municipal Code Section 1932.050 for Payment of Wastewater Capacity
Fees for Qualifying Industrial Development
RECOMMENDATION
It is recommended that the City Council adopt the attached resolutions related to wastewater
capacity fees:
® Resolution amending the Current Wastewater Capacity Fee Resolution for New
Development in the City of Petaluma, Resolution No. 2014-041 N.C.S., Adopted March 3,
2014, to Add Provisions Governing Time for Fee Payment, Reconciliation, Allowance for
Non -Residential User Relocation Credit and Other Matters;
® Resolution Establishing Administrative Guidelines Pursuant to Petaluma Municipal Code
Section 19.32.050 for Payment of Wastewater Capacity Fees for Qualifying Industrial
Development.
BACKGROUND
The purpose of the wastewater capacity fee program, in place in Petaluma since the 1990's, is to
recover the capital costs imposed on the City in response to growth for future customers or
expansion of demand by existing customers. The charge is established pursuant to California
Government Code section 66013 and "shall not exceed the estimated reasonable cost of
providing the service for which the fee or charge is imposed" without a vote of the electors. On
August 27, 2012, the Council adopted Resolution No. 2012-137 N.C.S., which incorporated the
results of a report, dated August 15, 2012 prepared by Bartle Wells Associates, entitled "Water
and Wastewater Capacity Charges", in which an analysis of charges necessary to recover the cost
of the wastewater facilities needed to serve future customers was presented. The majority of the
$230,404,000 original value of the City sewer system was attributed to the Ellis Creel: Water
Recycling Facility (ECWRF) and related improvements at a cost of $179.756,000. The analysis
established that approximately one third of the system capacity was available to future users at
that time and prorated the associated costs between hydraulic flow, measured in gallons per day
(gpd), organic loading measured in pounds of biochemical oxygen demand per day (BOD/day),
and solids loading measured in pounds of total suspended solids per day (TSS/day) in order to
derive the current wastewater capacity fee. The unit rates used to calculate the capacity fee are
adjusted by inflation annually and currently are: $16.00 per gpd, plus $3,632.38 per pound
BOD/day, plus $4,165.13 per pound of TSS/day. The fee is estimated based on typical flow and
organic and solids loading characteristics for the type of development and are currently due in
full to the City upon issuance of a building permit or industrial discharge permit.
The 2012 City Council action updated development impact and capacity fees to meet the goal of
reducing development fees while preserving funding for planned infrastructure necessary for
implementation of the General Plan 2025. Since then, a few issues associated with
implementation and administration of the capacity fees have arisen. In March 2014, the Council
adopted a minor modification to the Wastewater Capacity Fee Resolution clarifying that a
wastewater capacity fee could be required upon issuance of a new or revised industrial
wastewater discharge permit and not just at time of building permit. This addressed the fact that
commercial and industrial customers can increase flow and organic loading to the sewer system
without needing a building permit by extending the time or increasing the intensity of their
operations.
The City's Economic Development Strategy identified food and beverage processing as one of
seven economic growth opportunities for Petaluma. Staff conducted an economic impact analysis
of a dozen food and beverage processing companies and found that they employ 1,150 people
with wages that range from $11 to $51 per hour. They also support indirectly another 3,670 other
jobs through business to business purchasing, local spending, and demands for public services.
All together they generate an estimated $13 billion in regional economic activity and $99.4
million in state and local taxes. Food and beverage industry representatives have indicated that
the City's wastewater capacity fee program and industrial pretreatment requirements presented
challenges to their growing companies. Both the upfront wastewater capacity fees and on-site
treatment requirements create significant costs to these industries, which can create cash flow
issues. Over the past three years, staff worked with the local food and beverage processing
companies to better understand their needs and looked for alternate approaches that could help
local businesses grow without negatively impacting funding for capital improvements to the
wastewater treatment plant and sewer collections system.
To assist local small businesses, in 2012 the City amended industrial user wastewater discharge
permits to allow Best Management Practices to control high strength wastewater in lieu of
numerical limits. Staff has reviewed best practices from other municipalities and consulted with
industry professionals to creatively address wastewater capacity fees, resulting in the proposed
fee payment plan presented herein and proposed to be adopted with the recommended
Administrative Guidelines.
DISCUSSION
The reconunended changes to the existing capacity fee policies would currently assist a small but
critical subcategory of industrial development. These proposed changes are administrative in
nature and would not change the total wastewater capacity fees ultimately charged these
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developments, except for the addition of interest. The Municipal Code (Section 19.32.050)
authorizes the Council to adopt Administrative Guidelines for capacity fees via resolution to
provide procedures for calculation, payment and other administrative aspects of the wastewater
capacity fee. By utilizing a resolution for administrative guidelines, the guidelines can focus on a
subset of development and be modified separately in the future without changes to the
underlying capacity fee resolution, which establish the rational for calculating the wastewater
capacity fee. The proposed resolution for administrative guidelines provides an industrial
developer the option for financing a portion of the fee over time by establishing a payment
schedule for "Qualifying Industrial Developments" - industrial users that provide a significant
economic benefit for the City of Petaluma and meet specific criteria. The guidelines allow the
City greater flexibility to work with the targeted industrial developers by allowing them the
option of payment up front as currently called for by the wastewater capacity fee resolution, or to
pay a portion of the fee over time.
The proposed amendments to the Wastewater Capacity Fee Resolution, included as Attachment
1, address the following changes:
• Adopts the same language for "Time for Fee Payment' as contained in all of the other
City impact fee resolutions to assure consistency.
• Introduces by reference the Resolution for Administrative Guidelines that would apply to
Qualifying Industrial Developments that meet specific criteria described below.
• Amends language to address reconciliation of differences between estimated and actual
wastewater disposal characteristics within a five-year time period after payment of
capacity fees.
• Amends language to allow either the City or a Non -Residential User to initiate the
reconciliation of a capacity fee.
• Expands relocation credits for existing usage for industrial users to all non-residential
users, including commercial businesses.
• Expands definition of "development' to include expansion of operations of an existing
customer due to increased intensity of operations, which may include, but is not limited
to, increased hours of operations, increased production, or any other changes that result in
an increased discharge of Industrial Wastewater.
There is no current provision for the City to initiate a reconciliation of the wastewater capacity
fee based on actual sewer flow and loading data. The current fee resolution allows only the non-
residential users to request reconciliation of differences between the estimated values for flow
and organic loading provided at time of permit and the actual values determined after expansion
or development occurs. This particular amendment would allow the City or the non-residential
user to request a reassessment of the capacity fee. If the reassessed capacity fee is $250 more or
less than the paid capacity fee, the difference will become due to or be paid back by the City,
respectively. The change is proposed to make the process more fair and to avoid an unanticipated
benefit, either to the City or to the non-residential user, if the estimated capacity fee was based
on projected sewer flows and loading that differ significantly from actuals. This particular
amendment is proposed to take effect on April 1, 2015. Staff reviewed the accounts of existing
industrial developers and concluded that this proposed change could impact a very small number
of businesses. The April 1. 2015 effective date will allow time to educate businesses on the new
provision and encourage them to enact conservation and efficiency measures to either bring their
discharge down to 2011 levels or purchase a sufficient wastewater capacity entitlement to
support their current impact on the City's overall system. All other amendments would be
effective upon adoption of the proposed Resolution for Administrative Guidelines.
In addition to the proposed revisions to the Wastewater Capacity Fee Resolution, the Resolution
for Administrative Guidelines is proposed to address assessment and payment of capacity fees
for Qualifying Industrial Development that meets the following criteria:
New Proposed Industrial Develonments
• Addition of 35 jobs within two years of commencement of operations, and
• Calculated wastewater capacity fee of $250,000 or more.
The proposed Resolution for Administrative Guidelines allows industrial developments the
option of payment over time if the industries are considered to have significant economic benefit
to the City. Food and beverage industries within the City that add an additional 35 jobs over the
near term create a significant economic boost to the City. Based on an analysis conducted for the
City earlier this year, those 35 jobs would support another approximately 103 jobs indirectly
through commerce; generate an additional estimated $26.4 million of economic activity in the
region, including an estimated $1.7 million in state and local taxes. As proposed, the City would
offer Qualifying Industrial Developments an option for payment of the capacity fee over time in
lieu of payment in full at the time of issuance of a building permit or industrial wastewater
discharge permit for a plant expansion or increased intensity of operations. Industry
representatives point out that it is important to find a way to spread capacity fees over time so
that companies can pay for the impacts as they grow, thereby reducing upfront fees and sparing
investment funds for capital improvements. The proposed requirements for the payment schedule
include:
• If the calculated Wastewater Capacity Fee is between $250,000 and $1,000,000 submit a
payment of a minimum of $125,000 of the capacity fee, at the time of issuance of a
building permit or industrial wastewater discharge permit, or
• If the calculated Wastewater Capacity Fee is between $1,000,000 and $2,500,000, submit
a payment of a minimum of $250,000 of the capacity fee at the time of issuance of the
building permit or industrial wastewater discharge permit, or
• If the calculated Wastewater Capacity Fee is $2,500,000 or greater submit a payment of a
minimum of 10 percent of the capacity fee at the time of issuance of the building permit
or industrial wastewater discharge permit, and
• Agree to pay the remainder of the Wastewater Capacity Fee over a period of time not to
exceed 20 years at an interest rate equal to the City's blended interest rate for bonds and
loans used to finance construction of the Ellis Creek Water Recycling Facility and other
sewer system projects, plus 0.25 percent to cover the City's administrative expenses.
Currently that rate would be 3.27 percent.
• If the City reduces its Wastewater Capacity Fees as a result of a future Rate Study and
Amendment to the current Wastewater Capacity Fee Resolution within the next four
years, any Qualifying Industrial Development that has paid a wastewater capacity fee in
accordance with the currently proposed resolutions would be entitled to a refund of the
difference. If that development did take advantage of the payment plan, the refund may
take the form of a cash refired for the down payment if applicable, and/or a revision in the
monthly payment amount.
The proposed Resolution for Administrative Guidelines also addresses the need to reconcile
payment of capacity fees for Qualifying Industrial Development that meets the following criteria
when their flows and loadings have increased and exceed the amounts vested by previous
payment of fees or grandfathering. The trend in the past five years has seen a significant
increase of approximately 65% in BOD loading to Ellis Creel: WRF from industrial
developments without the commensurate payment of wastewater capacity fees. This has
occurred as certain industries have increased production to respond to market demands. The
proposed changes would provide the City an additional source of CIP funds to construct
enhancements to the plant and the sewer system to address these increases in organic strength.
Exnansion of Existinu Industrial Developments
• Calculated wastewater capacity fee of $100,000 or more based on historic average
wastewater discharge flows and loadings.
The Administrative Guidelines introduce the concept of a "capacity rental fee" when a qualifying
industry exceeds its "vested capacity". The vested capacity is the flow rate, and organic and
solids loading rates a user is entitled to by virtue of having paid a wastewater capacity fee, or as
vested as of June 30, 2011. As proposed, if a Qualifying Industrial Development exceeds its
vested capacity such that a capacity fee calculated at current rates (as defined in the Wastewater
Capacity Fee Resolution) would be ten percent higher than the capacity fee for the vested
capacity, the City would notify the industry and allow 30 days to reduce sewer discharges to
within the vested capacity. The City would charge a capacity rental fee for each month after the
30 -day "correction period" that the flow and loading exceed the vested capacity. The capacity
rental fee is the equivalent monthly principal and interest charge calculated on the difference in
capacity fee between the actual discharges and the vested capacity. The interest rate is the City's
average interest paid on bonds and loans used to finance major sewer improvements and the
construction of the Ellis Creek Water Recycling Facility (3.02 percent) plus an administrative
charge of 0.25 percent. The term used to determine the principal payment is 20 years. The
developer would have the option of purchasing additional vested capacity, subject to availability,
to avoid the capacity rental fee should the increases be determined to be permanent.
The Administrative Guidelines clarify the City's right to pursue collections of the monthly
payments for new capacity fees or monthly capacity rental fees using the same enforcement
mechanisms in the City Sewer Use and Source Control Ordinance (Municipal Code Section
15.44 — 15.76). This includes warnings. administrative fines, civil penalties and potential
revocation of the industrial discharge permit and/or termination of wastewater service.
FINANCIAL IMPACTS
The proposed changes are not anticipated to cause significant financial impacts. It is not
expected that many developers will meet the criteria for participation in the proposed payment
over time for wastewater capacity fees. The total collected under the proposed plan would be the
same as under the current regulations except that the developer would pay interest on the
outstanding balance. The interest would help offset interest payments that the City might make
on outstanding bonds and loans used to fund the ECWRF. The proposed changes in
reconciliation of the wastewater capacity fee will allow the City to collect fees for increases in
wastewater discharge flows and loadings that are currently not being charged. These additional
fees are needed to make improvements to the sewer system as intended under the original
wastewater capacity fee resolution. The exact financial impacts of these changes cannot be
accurately estimated but are not believed to be significant in comparison with the total capacity
fees collected.
ATTACHMENTS
Resolution Amending the Current Wastewater Capacity Fee Resolution for New
Development in the City of Petaluma, Resolution No. 2014-041 N.C.S., Adopted March
3, 2014, to Add Provisions Governing Time for Fee Payment, Reconciliation Allowance
for Non -Residential User Relocation Credit and Other Matters
Resolution Establishing Administrative Guidelines Pursuant to Petaluma Municipal Code
Section 1932.050 for Payment of Wastewater Capacity Fees. For Qualifying Industrial
Development
3. Exhibit A — Administrative Guidelines for the Payment of Wastewater Capacity Fees for
Qualifying Industrial Development
Attachment 1
RESOLUTION AMENDING THE CURRENT WASTEWATER
CAPACITY FEE RESOLUTION FOR NEW DEVELOPMENT IN THE
CITY OF PETALUMA, RESOLUTION NO. 2014-041 N.C.S., ADOPTED
MARCH 3, 2014 TO ADD PROVISIONS GOVERNING TIME FOR FEE
PAYMENT, RECONCILIATION, ALLOWANCE FOR NON-
RESIDENTIAL USER RELOCATION CREDITAND OTHER MATTERS
RECITALS
WHEREAS, the City of Petaluma General Plan 2025 ("General Plan")
outlines future land uses within the City of Petaluma ("City") and applies to a
planning area which includes the City and land outside the City in unincorporated
Sonoma County which must also be considered to properly plan for the City's
future; and,
WHEREAS, the General Plan of the City was adopted by the Petaluma
City Council ("City Council") on May 19, 2008; and,
WHEREAS, an Environmental Impact Report ("EIR") was prepared for
the General Plan (State Clearinghouse 42004082065) pursuant to the California
Environmental Quality Act ("CEQA") and certified by the City Council on April
7, 2008 by Resolution No. 2008-058 N.C.S.; and,
WHEREAS, the General Plan area is shown on the land use maps
contained in the General Plan; and,
WHEREAS, the City Council last updated the City's Wastewater
Capacity Fee for New Development by Resolution No. 2014-041 N.C.S., adopted
March 3, 2014; and,
WHEREAS, the General Plan incorporates policies and programs to
mitigate the impacts of such anticipated new development, including policies that
require new development to pay for its proportional fair share of the cost of
acquiring and improving public facilities necessary to meet the demands of
residents, employees, customers, and businesses; and,
WHEREAS, the General Plan and its EIR analyze the impacts of
development under the General Plan and proposed mitigation measures, including
the creation of fee programs to require new development to pay for its
proportional fair share of the cost of acquiring and improving public facilities
necessary to meet the demands of new residents, employees, customers, and
businesses for such facilities; and,
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WHEREAS, Goal 1-G-6 of Chapter 1 of the General Plan provides that
the City should "Maintain a residential growth management system to ensure
public infrastructure keeps pace with growth'; and,
WHEREAS, Policy 1-P-48 of Goal 1-G-6 of Chapter 1 of the General
Plan provides that the City should "Ensure that all new development provides
necessary public facilities to support the development," and includes program A
which provides that the City should: "Collect proportionate fair share of long-
term infrastructure improvement costs as entitlements are granted" and program
B: "Initiate design of long term infrastructure improvements in a timely manner to
ensure their completeness to coincide with demand'; and,
WHEREAS, Goal 8-G-4 of Chapter 8 of the General Plan provides that
the City should "Manage the wastewater collection and treatment system to
address 100 percent capture and treatment of the City's wastewater in an
economically and ecologically sound manner'; and,
WHEREAS, Policy 8-P-15 of Goal 8-G-4 of Chapter 8 of the General
Plan provides that "Capacity of the water recycling facility shall be maintained,
and expanded as necessary, to keep pace with the City's growth"; and,
WHEREAS, wastewater services provided by the City include, but are
not limited to, wastewater collection, treatment, disposal, solids residual
management and reuse; and,
WHEREAS, to plan for anticipated growth under General Plan 2025, the
City Department of Water Resources and Conservation and its consultants
undertook engineering and financial studies to determine the necessary
infrastructure to provide sufficient wastewater facilities and services to serve
existing and anticipated development under General Plan 2025; and,
WHEREAS, the City retained Bartle Wells Associates to determine,
based in part on the land use designations provided by the General Plan, the
wastewater capacity necessary to maintain the level of such services provided to
the community and to fund new development's share of the costs of maintaining
adequate capacity for wastewater amenities to Petaluma; and,
WHEREAS, an analysis of the capacity charges necessary to recover the
cost of wastewater facilities needed to serve future costumers was prepared by
Bartle Wells Associates dated August 15, 2012, entitled "Water & Wastewater
Capacity Charges" ("Report"), a copy of which is on file in the Office of the City
Clerk, and is hereby incorporated by reference; and,
WHEREAS, the Report, the General Plan and the General Plan EIR
describe the facilities necessary to provide adequate wastewater capacity in the
City; and,
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WHEREAS, the Report, the General Plan and the General Plan EIR
describe the impacts of contemplated future development on existing public
facilities in the City of Petaluma and analyze the need for the new facilities
required by future development within the City of Petaluma, described above and
in the Report; and,
WHEREAS, the Report describes new development's share of the cost of
existing facilities (buy -in), and the costs needed to finance construction of
necessary capital improvements to serve new development as described in the
Report, the General Plan and the City's budget for capital improvements
(collectively, the "Facilities"); and,
WHEREAS, the Report sets forth the relationship between contemplated
future development, the Facilities, and the estimated cost of the Facilities; and,
WHEREAS, the Report estimates the cost in current dollars of the
Facilities, assigns the portion of the cost attributable to new development, and
calculates the fees necessary to raise the revenue necessary to pay for the portion
of the cost of the Facilities attributable to new development; and,
WHEREAS, The Wastewater Capacity Fee is not a "tax" as defined in
Section 1, paragraph (e) of Article XIIIC of the California Constitution
("Proposition 26") because such fee is imposed for a specific benefit conferred or
privilege granted directly to the payer that is not provided to those not charged,
and which does not exceed the reasonable cost to the City of providing the service
or product; and/or the fee is imposed for a specific government service or product
provided directly to the payer that is not provided to those not charged, and which
does not exceed the reasonable cost to the City of providing the service or
product; and/or the fee is imposed for the reasonable regulatory costs to the City
of issuing licenses and permits, performing investigations, inspections and audits,
enforcing agricultural marketing orders and the administrative enforcement and
adjudication thereof, and/or the fee is imposed as a condition of property
development; and,
WHEREAS, the Wastewater Capacity Fee is not subject to the
requirements of Article XIIID of the California Constitution ("Proposition 218")
concerning property related assessments and fees pursuant to Apartment
Association of Los Ai7geles Count), it Cily of Los Angeles (2001) 24 Cal.4" 830,
in that such fee is not applicable to incidents of property ownership, but rather to
actual use of and need for City services and/or facilities; and.
WHEREAS, in accordance with Government Code Section 50076, fees
and charges that do not exceed the reasonable cost of providing the service or
regulatory activity for which the fees are charged and which are not levied for
general revenue purposes are not special taxes as defined in Article 3.5 of the
Government Code; and,
WHEREAS, in accordance with Government Code Section 66016, at
least fourteen (14) days prior to the public hearing at which this Resolution was
adopted, notice of the time and place of the hearing was mailed to eligible
interested parties who filed timely written requests with the City for mailed notice
of meetings on new or increased fees or service charges; and,
WHEREAS, in accordance with Government Code Section 66016, the
Report was available for public inspection, review, and comment for ten (10) days
prior to the public hearing at which the City Council considered the adoption of
this resolution; and,
WHEREAS, ten (10) days advance notice of the public hearing at which
the City Council considered the adoption of this resolution was given by
publication in accordance with Government Code Section 6062a; and,
WHEREAS, on September 10, 2012, the City Council adopted Ordinance
No. 2444 N.C.S., which adds a new Title 19, entitled "Development Fees," to the
Petaluma Municipal Code and amends, repeals and/or recodifies various
provisions authorizing the City's development -related fees, including the City
Facilities Development Impact Fee, Open Space Land Acquisition Fee, Park Land
Acquisition Fee (Non -Quimby Act), Park Land Acquisition Fee (Quimby Act),
Traffic Development Impact Fee, Water and Wastewater Capacity Fees and the
Commercial Development Housing Linkage Fee; and,
WHEREAS, Petaluma Municipal Code Section 19.32.050 authorizes the
City Council to adopt administrative guidelines to provide procedures for
calculation, payment and other administrative aspects of the wastewater capacity
fee.
FINDINGS
WHEREAS, the City Council finds as follows:
A. After considering the Report, the testimony received at the noticed
public meeting at which this resolution was adopted, the
accompanying staff report, the General Plan, the General Plan EIR,
and all correspondence received at or prior to the public meeting
(the "Record"), the Council approved and adopted the Report by
Resolution No. 2014-041 adopted March 3, 2014; and the City
Council further found that the future development in the City of
Petaluma will generate the need for the Facilities, and the Facilities
are consistent with the City's General Plan.
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B. The City currently provides wastewater facilities and treats
wastewater for the conununity and the fee set forth in this
resolution will be used to maintain current service levels. As such,
the Wastewater Capacity Fee as it relates to development within
the City is not a "project" within the meaning of CEQA (Pub. Res.
Code §21080(b)(8)(D)).
C. In adopting this resolution, the City Council is exercising its
powers under Article XI, §§5 and 7 of the California Constitution,
Chapter 5 of Division 1 of the Government Code ("Mitigation Fee
Act"), commencing with Section 66000, Section 54 of the City of
Petaluma Charter, and Chapter 19.32 of the Petaluma Municipal
Code, collectively and separately.
D. The Record establishes:
1. In accordance with section 66013, subdivision a, of the
Mitigation Fee Act, the Wastewater Capacity Fee imposed
by this Resolution ("Fee") does not exceed the estimated
reasonable cost of providing the wastewater services for
which the Wastewater Capacity Fee is imposed, in that the
Fee is calculated based on the relationship between the
value of the City's existing wastewater facilities, and the
value of upgrades and additional capacity needed to serve
new users, and allocates to new wastewater system
customers their fair share of the cost of existing and future
wastewater improvements needed to serve the new
customers. The Fee includes the buy -in component for
existing facilities and projected capital expenditures that
strictly benefit new customers, as described in detail in
Appendix A of the Report, as well as in the City's capital
improvement plan. The Report establishes that wastewater
system improvements are required, and justifies the
changes in the wastewater capacity charge based on the
amount required to "buy into" existing facilities and
anticipated City capital expenditures. The Report explains
how the capacity charges are calculated on the basis of
capital costs related to the upgrades and expansion of the
wastewater system required by the addition of future
connections. The Fee is necessary to cover the City's cost
of improvements required to serve anticipated firture
connections.
2. The cost estimates set forth in the Report are reasonable
estimates for constructing or acquiring the Facilities, and
the Fees expected to be generated by future development
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will not exceed the estimated cost of constructing and/or
acquiring the Facilities; and
3. The method of allocation of the Fee to a particular
development bears a fair relationship and is roughly
proportional to each development's burden on and benefits
from the Facilities to be funded by the Fee, in that the Fee
is calculated based on the wastewater facilities demand
each particular development will generate.
4. The Report is a detailed analysis of the fair proportion of
costs for sewer improvements to be applied to future
development and/or existing customer expansions, based
on the increased demand placed on the overall system.
5. Pursuant to Government Code Section 66483(f), the
Facilities are in addition to the existing facilities serving the
sanitary sewer area covered by the Report at the time of its
adoption.
6. Pursuant to Government Code Section 66483(e) the fee as
set forth in this Resolution as to any property proposed for
subdivision and subject to the Subdivision Map Act
(Government Code Section 66410 et seq.) within the
sanitary sewer area covered by the Report does not exceed
the pro rata share of the amount of the total actual or
estimated cost of all of the planned sanitary sewer facilities
within such sanitary sewer area which would be assessable
on such property proposed for subdivision if such costs
were apportioned uniformly on a per acre basis.
7. The Fee is consistent with the General Plan and, pursuant
to Government Code Section 65913.2, the City Coimcil has
considered the effects of the Fee with respect to the City's
housing needs as established in the housing element of the
General Plan.
ADOPTION OF FEE
NOW, THEREFORE, BE IT RESOLVED:
1. Definitions.
a. "Accessory Dwelling" shall mean a second unit which
meets the standards set forth in Section 7.030 of Chapter 7,
"Standards for Specific Land Uses" of the City of Petaluma
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Implementing Zoning Ordinance ("IZO"), as modified by
any subsequent amendment or successor zoning ordinance
and/or development code provision adopted by the City
which defines Accessory Dwelling, second unit or second
dwelling unit."
b. "BOD" means biochemical oxygen demand.
C. "Commercial' shall mean any development constructed or
to be constructed on land having a General Plan 2025 land
use or zoning designation, as established in the
Implementing Zoning Ordinance, No. 2300 N.C.S., or any
successor ordinance, for facilities for the purchase and sale
of commodities and services and the sales, servicing,
installation, and repair of such commodities and services
and other uses incidental to these activities. Commercial
land uses include but are not limited to: apparel and
clothing stores; auto dealers and malls; auto accessories
stores; banks and savings and loans; beauty salons; book
stores; discount stores and centers; dry cleaners; drug
stores; eating and drinking establishments; Rimiture stores
and outlets; general merchandise stores; hardware stores;
home furnishings and improvement centers; laundromats;
liquor stores; service stations; shopping centers;
supermarkets; bicycle shops; cameras and photographic
supply stores; convenience stores; department stores; drug
stores and pharmacies; jewelry stores; luggage and leather
goods stores; sporting goods and equipment stores;
stationery stores; collectible stores; second hand goods
stores; religious goods stores; hobby materials stores; small
wares stores; plant sales; bowling alleys; coin-operated
amusement arcades; dance halls, clubs and ballrooms;
electronic game arcades; ice skating and roller skating
establishments; pool and billiard rooms; amusement and
theme parks; go-cart tracks; golf driving ranges; miniature
golf courses; water slides; banks and trust companies,
credit agencies; holding companies; lending and thrift
institutions; securities/commodity contract brokers and
dealers; fueling stations and gas stations; security and
commodity exchanges; vehicle finance leasing agencies;
restaurants, cafes and coffee shops; and movie theatres and
civic theatres.
d. "Developed" and "Development" shall mean the
construction or alteration of or addition to, other than by
the City, of any building or structure within the City of
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Petaluma and within any areas served by the City outside
the jurisdictional limits of the City. It shall also mean the
expansion of operations of an existing customer due to
increased intensity of operations, which may include but is
not limited to, increased hours of operations, increased
production, or any other changes that result in an increased
discharge of Industrial Wastewater.
e. "Director" shall mean the Director of Public Works and
Utilities or his/her designee.
f "Domestic Wastewater" means any wastewater which will
enter the City's sanitary sewer from the non -industrial
operation, preparation, cooling and handling of food; or,
containing human waste and similar matter from the
sanitary conveniences of dwellings, commercial building,
industrial facilities and installations.
g. "Dwelling Unit — Single Fancily" means any single-family
residential dwelling or mobile home designed for
occupancy by one family, each of which shall be deemed
equivalent to one dwelling unit.
h. "Dwelling Unit — Multi Family" means any duplex, triplex,
fourplex, townhouse or condominium, apartment house,
lofts, or other multi -residential establishment, designed for
occupancy for living purposes by more than one family,
which is divided into separate residential units, each of
which is designed for occupancy by one family only, each
resident unit shall be deemed equivalent to one dwelling
unit. For example, an apartment complex with 10
apartments shall be considered to have 10 dwelling units.
i. "Facilities" shall include those facilities that are described
in the Report. "Facilities" shall also include comparable
alternative facilities should later changes in projections of
development in the region necessitate construction of such
alternative facilities; provided that the City Council later
determines in accordance with applicable law (1) that there
is a reasonable relationship between Development and the
need for alternative facilities (3) that the alternative
facilities are comparable to the facilities listed in the
Report, and (3) that revenue from fees charged pursuant to
this Resolution will be used only to pay new
Development's fair and proportionate share of the
alternative facilities.
ZL
j. `9rcf" means hundred cubic feet. One hcf is equivalent to
748 gallons.
k. "Industrial" shall mean any development constructed or to
be constructed on land having a General Plan 2025 land use
or zoning designation as established in the Implementing
Zoning Code, Ordinance No. 2300 N.C.S., or any successor
ordinance, for the manufacture, production, assembly, and
processing of consumer goods, uses incidental to those
activities, and research, development and warehousing.
Industrial land uses include, but are not limited to:
assembly; contractor's storage yards; fabrication; lumber
yards; manufacturing; outdoor stockyards and service
yards; printing; processing; warehouses and distribution
centers; wholesale and heavy commercial enterprises;
clothing, fabric and other product manufacturing;
electronics, equipment, and appliance manufacturing; metal
products fabrication, machine and welding shops; paper
product manufacturing; food and beverage product
manufacturing; small-scale manufacturing; lumber and
wood product manufacturing; machinery manufacturing;
motor vehicle and transportation equipment manufacturing;
stone and cut stone product manufacturing; structured clay
and pottery product manufacturing; processing of building
materials, chemicals, fabricated metals, paper products,
machinery, textiles, and/or equipment; and collection,
sorting and processing enterprises.
1. "Industrial Wastewater" means any non-domestic
wastewater which will enter into the City's sanitary sewer
by being discharged from any industrial, manufacturing,
conunercial or business establishment or process; or from
the development, recovery, or processing of any natural
resource.
M. "Mixed Development" shall mean a development that
includes more than one of the types of development defined
in this Section 1. Mixed developments may combine
residential types of development (Single Family and
Multifamily), non-residential types of development
(Commercial. Industrial, and Office), or a combination of
residential and non-residential types of development.
n. "Non -Residential User" includes, but is not limited to. any
corrunercial, industrial or institutional customer.
f-9
o. "Office" shall mean any development constructed or to be
constructed on land having a General Plan 2025 land use or
zoning designation, as established in the Implementing
Zoning Ordinance, Ordinance No. 2300 N.C.S., or any
successor ordinance, for general business offices, medical
and professional offices, administrative or headquarters
offices for large wholesaling or manufacturing operations,
and other uses incidental to these activities. Office land
uses include but are not limited to: administrative
headquarters; business parks; finance offices; insurance
offices; legal offices; medical and health services offices;
office buildings; professional and administrative offices;
professional associations; real estate offices; and travel
agencies.
P. "Residential User" means any single-family residential
dwelling or mobile home designed for occupancy by one
family, and any duplex, triples, fourples, townhouse or
condominium, apartment house, mobile home park or other
multi -residential establishment, designed for occupancy for
living purposes by more than one family, which is divided
into separate residential units, each of which is designed for
occupancy by one family only.
q. "TSS" means total suspended solids.
2. Wastewater Capacity Fee Imnosed.
a. In accordance with Petaluma Municipal Code Chapter
19.32, Government Code Section 66013 and other
applicable law, a Wastewater Capacity Fee shall be
imposed and paid at the times, and in the amounts and
otherwise apply and be administered as prescribed in this
Resolution on Development as described in the Report.
b. In accordance with Government Code Section 66483(a),
the Fee shall apply to development projects subject to the
Subdivision Map Act (Govenunent Code Section 66410 et
seq.) only where the Fee has been in effect pursuant to this
Resolution for a period of at least 30 days prior to the filing
of the tentative or parcel map applicable to such
development project.
[—to
3. Time for hnoosine Fee for Residential Subdivisions.
In accordance with Government Code Section 65961, the Fee for
Single Family and Multiple Family subdivision development for
which tentative or parcel maps are required pursuant to the
Subdivision Map Act (Government Code Section 66410 et seq.)
shall be imposed at the time of the approval of conditions that
apply to the tentative or parcel map for such residential subdivision
development, as applicable. Payment of the Fee shall be deemed to
be a condition of all such tentative or parcel maps.
Notwithstanding this Section 3, the time for payment of the Fee for
all development, including Single Family and Multiple Fancily
subdivisions, shall be as specified in Section 4, below.
4. Time for Fee Pavment.
a. In accordance with Government Code Section 66007, the
Fee shall be charged and paid for each residential
development upon the date of final inspection or issuance
of the certificate of occupancy for such residential
development, whichever is earlier; however, if the Fee is to
reimburse the City for expenditures previously made, or if
the City determines that the Fee will be collected for
Facilities for which an account has been established and
funds appropriated and for which the City has adopted a
proposed construction schedule prior to issuance of the
building permit for such residential development, then the
Fee shall be charged and paid upon issuance of the building
permit for such residential development. However, with
respect to a residential development proposed by a
nonprofit housing developer in which at least forty-nine
percent (49%) of the total units are reserved for occupancy
by lower income households, as defined in Health and
Safety Code Section 50079.5, at an affordable rent, as
defined in Health and Safety Code Section 50053, the
payment procedures described in Government Code
Section 66007(b) (Z) (A) and (B) shall apply.
b. The Fee shall be charged and paid for each non-residential
Development upon issuance of the building pen -nit for such
non-residential Development.
C. The Fee shall be charged and paid for each Mixed
Development upon the times specified in this Section 4 that
apply to such Mixed Development. For example, if a
Mixed Development includes residential Development and
5.
non-residential Development, and the Fee is to reimburse
the City for expenditures previously made, or the City has
made the required determination to permit requiring
payment of the Fee upon issuance of the building permit,
and the procedures in Government Code section
66007(b)(2)(A)-(B) do not apply, the Fee as applicable to
the entire mixed development shall be paid upon issuance
of the building permit for the Mixed Development. If a
Mixed Development includes residential and non-
residential development, and the Fee is not to reimburse the
City for expenditures previously made or the City has not
made the required determination to permit requiring
payment of the Fee upon issuance of the building permit,
the Fee as to the residential portion of the mixed
development shall be paid upon the earlier of the date of
final inspection or issuance of the certificate of occupancy
for such residential portion, and the Fee as to the non-
residential portion of the Mixed Development shall be paid
upon issuance of the building permit for such non-
residential portion.
d. The fee shall be charged and paid in full for each industrial
development upon issuance of the building permit for such
development, or upon issuance of a new or revised
industrial wastewater discharge permit, subject to
applicable law. Alternatively, The fee for industrial
development meeting specific criteria shall be as set forth
in the Resolution for Establishing Administrative
Guidelines Pursuant to Petaluma Municipal Code Section
19.32.050 for the Payment of Wastewater Capacity Fees for
Qualifying Industrial Development.
Amount of Fee. The amount of the Fee shall be as follows:
a. General Connection may be made to the City's wastewater
collection system trunk lines in locations approved by and subject to the
regulations of the City Council, upon payment to the City of the capacity
fees specified below and other specifications hereinafter indicated.
b. Canacity Fee.
i. Residential Users.
A. Dwelling Unit
capacity fee shall
unit.
Single Family. The
be $7,166 per dwelling
B. Dwelling Unit — Multi Family. The capacity
fee shall be $4,744 per dwelling unit.
ii. Accessory Dwelline. The capacity fee shall be
$2,636 per dwelling unit.
iii. Non -Residential Users.
A. Formula. The wastewater capacity fee for
Non-residential Users shall be based upon
the daily flow, BOD and TSS of the
wastewater being discharged, except the
minimum fee shall be same for Residential
Users per Section 5(b) (i) (A). These three
parameters shall be applied as outlined in
Table 12 below from the page 11 of the
Report:
Table 12
City of Petaluma
Wastewater Capacity Charge
Non -Residential Discharge Characteristics
Non -Residential I Unit
Auto repair
( Per service bay
Bakery
1,000 square
(ppd) (ppd)
foot
Barber
1,000 square
919.441
foot
Bowling alley
Per alley
Church
1,000 square
1,225.92
foot
Convalescent home
Per room
Grocery w/ disposal
1,000 square
1,838.88
foot
Grocery w/o disposal
1,000 square
60
foot
Halls ono food service)
1,000 square
foot
Hospitals
Per bed
Hotels and motels with
restaurants
Per room
Flow
BOD TSS
0.125
(gpd)
(ppd) (ppd)
Charge
30
0.063 10.063
919.441
150
0.313 0.313
4,597.21
40
0.083 0.083
1,225.92
150
0.313 ( 0.313
4,597.21
60
0.125 0.125
1,838.88
90 I
0.188 10.188
2,758.33
60
0.125 0.125
1,838.88
60
0.125
0.125
1,838.88
90
0.188
0.188
2,758.33
175
0.365
0.365
5,363.41
90
0.188
0.188
2,758.33
j- 13
Non -Residential
Unit
Hotels and motels without
(ppd)
restaurant
Per room
Misc. Commercial/Industrial
1.000 square
2,758.33
foot
Mortuary
1,000 square
90
foot
Offices, medical and
1,000 square
professional
foot
Restaurants
1,000 square
90 I
foot
Restaurants, fast food
1,000 square
foot
Retail
1,000 square
foot
School
Per 100 students
Service station I
Per fuel pump
Spas and health clubs
Per shower
head
Taverns/bars I
Per seat
Theater
1,000 square
foot
Source: City of Petaluma
Flow
(gpd)
90
60
60
60
BOD
TSS
0.125
(ppd)
(ppd)
Charge
0.188
0.188
2,758.33
0.125
10.125 I
1,838.88
0.125
0.125
900 I 1.877
0.125
I 1,838.88
0.125
1,838.88
1.877
27,583.25
1.188
17,469.39
60
0.125
0.125
1,838.88
560
1.168 I
1.168
17,162.91
30 I
0.063 10.063
919.441
90
0.188
0.188
2,758.33
20 I
0.042 10.042
612.961
90 I
0.188 10.18
8 I
2,758.33
Wherein,
DF = Customer's Daily Flow (gallons per day)
BOD = Customer's Daily Concentration of BOD (ppd)
TSS = Customer's Daily Concentration of TSS (ppd)
B. LoadinH Parameters. Values for DF, BOD
and TSS shall be estimated using Table 12.
The "Type of Business/Industry" to be used
as the basis for the calculation shall be as
determined by the Director or his/her
designee. Loading parameters for uses not
listed in Table 12 shall be as determined by
the Director.
C. Reconciliation. After connection, the City or
the Non -Residential User may request
reconciliation of the capacity fee. For the
reconciliation, the City shall monitor and
track the customer's flow based on water
i— 14
use meter readings for a reconciliation
period not to exceed one year. After the
reconciliation period, the City may
recalculate the capacity fee using the BOD
and TSS values estimated for the initial
capacity fee calculation and the actual
average flows as monitored and recorded by
the City. Reconciliation of Wastewater
Capacity Fees for Qualifying Industrial
Developments shall be in accordance with
the Resolution for Establishing
Administrative Guidelines Pursuant to
Petaluma Municipal Code Section 19.32.050
for the Payment of Wastewater Capacity
Fees for Qualifying Industrial Development.
1. Difference Less Than or Eoual to $250.
If the difference between the
recalculated capacity fee and the original
capacity fee is less than or equal to $250,
no reconciliation shall be made.
2. Difference of $251 or More.
If the recalculated capacity fee exceeds
the original capacity fee paid by $251 or
more, the customer shall pay the total
difference between the original capacity
fee paid and the recalculated capacity
fee. If the recalculated capacity fee is
less than the original capacity fee paid
by $251 or more, the City shall refund
the total difference between the original
capacity fee paid and the recalculated
capacity fee.
D. Capacity Fee on Rebuilding, Remodeling or
Expansion of Existing Non -Residential User
Facilities. In the event of any operational
changes subject to issuance of a new or
revised industrial wastewater discharge
permit, expansion, remodeling or rebuilding
of any non-residential building, structure, or
premises, currently connected to the
wastewater system, in a manner which
increases the loading parameters, an
additional capacity fee shall be due. In no
i—I5
instance shall a refund be granted if the
rebuilding, remodeling or expansion of a
Non -Residential User facility decreases the
size of the building or the loading
parameters. The additional capacity fee for
the expansion, remodeling or rebuilding of
any non-residential building, structure, or
premises, currently connected to the
wastewater system, in a manner which
increases the loading parameters, shall be
calculated as follows:
ACF = NCF — OCF
Wherein,
"ACF" is the additional capacity fee;
"NCF" is the new capacity fee calculated
per Section 5(b) (iii) (A) with the values of
the loading parameters (DF, BOD and TSS)
to be determined based on the facility after
the expansion, remodeling or rebuilding
(note: this is not to be the incremental
increase in loading — it is to represent the
total loading of the facility); and
"OCF" is the old capacity fee calculated per Section
5(b) (iii) (A) with the values of the loading
parameters to be based on the facility prior
to any expansion, remodeling or rebuilding.
For Qualifying Industrial Developments,
"OCF" shall be based on the Vested
Capacity as defined in the Resolution for
Establishing Administrative Guidelines
Pursuant to Petaluma Municipal Code
Section 19.32.050 for the Payment of
Wastewater Capacity Fees for Qualifying
Industrial Development.
1. Industrial Relocation.
This provision shall not be applied to a
non-residential property or building that
was formerly used for an industrial
operation that has vacated the premises,
relocated to a different parcel, and has
received a relocation credit per Section
6.
/-16
C. Annual Economic Adiustment to Canacity Fee. On
July I of each year, commencing on July 1, 2014, the
capacity fees and unit costs described herein shall be
adjusted to account for increases or decreases in the index
set forth below. The capacity fees and unit costs shall be
adjusted as follows.
Annual Economic Adiustment to
Canacity Fee for Residential Customers.
The capacity fee for residential
customers shall be adjusted in
accordance with the following formula:
NCFRes = OCFRes + ((OCFRes) x
(ENR Annual Change))
Wherein,
"NCFRes" is the new or adjusted
capacity fee for
residential customers for the upcoming
fiscal year;
"OCFRes" is the capacity fee in effect
during the current fiscal year; and
"ENR Annual Change" is the percentage
change in the Engineering News Record
Construction Cost Index for the San
Francisco area from December for the
second prior calendar year to December
for the prior calendar year.
2. Annual Economic Adiustment to
Canacity Fee for Accessory Dwellines.
The capacity fee for accessory dwellings
shall be adjusted in accordance with the
following formula:
NCFAcc = OCFAcc + ((OCFAcc) x
(ENR Annual Change))
Wherein,
"NCFAcc" is the new or adjusted
capacity fee for accessory dwellings for
the upcoming fiscal year;
"OCFAcc" is the capacity fee in effect
during the current fiscal year: and
"ENR Annual Change" is the percentage
change in the Engineering News Record
1-17
Construction Cost Index for the San
Francisco area from December for the
second prior calendar year to December
for the prior calendar year.
3. Annual Economic Adiustment to
Canacitv Fee for Non -Residential
Customers.
The unit costs for DF, BOD and TSS
used in calculating the capacity fee for
non-residential customers shall each be
adjusted in accordance with the
following formula:
NUC = OUC + ((OUC) x (ENR Annual
Change))
Wherein,
"NUC" is the new or adjusted unit cost
for DF, BOD or TSS for non-residential
customers for the upcoming fiscal year;
"OUC" is the unit cost for DF, BOD or
TSS in effect during the current fiscal
year; and
"ENR Annual Change" is the percentage
change in the Engineering News Record
Construction Cost Index for the San
Francisco area from December for the
second prior calendar year to December
for the prior calendar year.
d. Computation and Pavment of Capacity Fees.
General. The Director or his/her designee
shall compute all fees as set forth in this
resolution. Payment for the capacity fees
shall be made in full prior to connection to
the wastewater utility or discharge of
wastewater from the facility if there is
already a capacity to the wastewater utility.
Payment of the capacity fees for Qualifying
Industrial Developments shall be in
accordance with the Resolution for
Establishing Administrative Guidelines
Pursuant to Petaluma Municipal Code
Section 19.32.050 for the Payment of
/- is
Wastewater Capacity Fees for Qualifying
Industrial Development,
2. Mixed Use. Parcels that mix Residential
Users and Non -Residential Users must be
separately metered so Residential Users are
served by a meter(s) that is separate from the
meter(s) serving Non -Residential Users.
3. Refund Annlications Based on 2008
Wastewater Capacity Fee Paid. Current
owners of development that paid a
wastewater capacity fee pursuant to
Resolution 2008-097 may apply for a refund
of the difference between the that fee and
the wastewater capacity fee imposed by this
resolution ("current fee"), subject to the
following:
a. To be eligible for a refund, current
development owners must certify in
writing to the City that the owner has not
recovered or is not recovering from third
parties such as tenants or others the
amount of the prior fee paid or the
amount by which the prior fee exceeds
the current fee.
b. Any refunds pursuant to this provision
shall only be paid from existing, un -
obligated, unspent Fee revenue balances.
The City will have no obligation to pay
refunds to any owner absent sufficient
existing, un -obligated, unspent Fee
revenue balance available for that
purpose.
c. If existing, un -obligated, unspent Fee
revenue balances are insufficient to
cover eligible applications for refund,
such eligible applications shall be paid
refunds a pro rata basis in accordance
with applicable law.
—19
6. Allowance for Non -Residential User Relocation Credit.
a. Oualification for Non -Residential User Relocation Credit
i. Annlicabilitv. This section shall apply to Non -
Residential User development only, not to
residential development. If the transfer of an a Non -
Residential User to a different parcel of land does
not impose any additional burden on the City's
wastewater utility, a credit, which shall be referred
to as a relocation credit, may be allowed, provided
that:
A. Same Operation. Essentially the same Non -
Residential operation, as determined by the
Director, has been transferred from one
parcel to another and such operation was
previously connected to the City's
wastewater utility;
B. Ownership. The same person now making
claim to the relocation credit owned the
Non -Residential operation prior to the
transfer and will continue to own the Non -
Residential operation at the new location.
C. Abandonment. The owner has demonstrated
to the satisfaction of the City that the Non -
Residential operation has been abandoned
from the parcel from which the transfer has
occurred, or presented a certification in
writing that such Non -Residential operation
will be abandoned within six (6) months of
the City approving an application for
connection. Should the Non -Residential
operation not be abandoned within the
prescribed period, the relocation credit shall
be revoked and a capacity fee, with respect
to the parcel to which the Non -Residential
operation transferred, shall be due and
payable as of the date said parcel was
connected to the City's wastewater utility.
D. Disconnection. The connection to the
wastewater utility at the prior parcel has
been disconnected and capped, the meter has
IMi9
been removed, and the account closed. Any
subsequent use of the prior parcel requiring
connection to the wastewater system will
pay a new wastewater capacity fee in
accordance with this resolution.
E. Capacity. There is adequate capacity in the
City's wastewater utility to accommodate
connection of the Non -Residential operation
to be transferred.
ii. Basis for Relocation Credit. The capacity fee for the
relocated Non -Residential operation shall be
calculated per Section 5(b) (iii) (A). If the loading
parameters (DF, BOD, TSS) for the Non -
Residential operation at its new location are
equivalent to the loading parameters for the Non -
Residential operation at its prior location, no
additional capacity fee shall be applied. If the
loading parameters for the Non -Residential
operation at its new location will be increased over
the loading parameters for the Non -Residential
operation at its prior location, then an additional
capacity fee shall be calculated per Section 5(b) (iii)
(D).
7. Capacity Fees for Restaurants and Laundromats Usine_ Best
Available Teclnoloev.
If a restaurant or laundromat applies for a wastewater capacity fee
and installs and continues to use the most water efficient hardware,
fixtures, and systems (Best Available Technology) as determined
by the Director, the wastewater capacity fee will be 50% less than
the fee determined by 12.
8. Use of Fee Revenue.
In accordance with Government Code Section 66013(c), the
revenues raised by payment of the Fee shall be placed in a
separate, interest bearing account to pennit accounting for such
revenues and the interest which they generate. Such revenues and
interest shall be used only for the Facilities and the purposes for
which the Fee was collected, which are the following:
a. To pay for acquisition of the Facilities;
1 -21
b. To pay for design, engineering, construction of and
property acquisition for, and reasonable costs of outside
consultant studies related to, the Facilities;
C. To reimburse the City for the Facilities constructed by the
City with funds from other sources including funds from
other public entities, unless such funds were obtained from
grants or gifts intended by the grantor to be used for the
Facilities.
d. To reimburse developers that have designed and
constructed any of the Facilities with prior City approval
and have entered into an agreement, as provided in Section
12 below; and
e. To pay for and/or reimburse costs of program development
and ongoing administration and maintenance of the Fee
program, including, but not limited to, the cost of studies,
legal costs, and other costs of updating the Fee.
9. Standards.
The Standards upon which the need for the Facilities is based are
the standards of the City, including the standards contained in the
General Plan and its EIR and those City standards reflected in the
Report.
10. Periodic Review.
In accordance with Government Code Section 66013(d), the City
shall make available to the public, within 180 days after the last
day of each fiscal year, the following information for that fiscal
year:
a. A description of the charges deposited in the account.
b. The beginning and ending balance of the account and the
interest earned from investment of moneys in the account.
C. The amount of charges collected in that fiscal year.
d. An identification of all of the following:
i. Each public improvement on which charges were
expended and the amount of the expenditure for
each improvement, including the percentage of the
total cost of the public improvement that was
funded with those charges if more than one source
of funding was used.
ii. Each public improvement on which charges were
expended that was completed during that fiscal
year.
iii. Each public improvement that is anticipated to be
undertaken in the following fiscal year.
iv. A description of each interfund transfer or loan
made from the capital facilities fund. The
information provided, in the case of an interfund
transfer, shall identify the public improvements on
which the transferred moneys are, or will be,
expended. The information, in the case of an
interfund loan, shall include the date on which the
loan will be repaid, and the rate of interest that the
fund will receive on the loan.
The information required pursuant to this Section 10 may be
included in the City's annual financial report.
The information prescribed in this Section 10 shall not apply to:
moneys received to construct public facilities pursuant to a
contract between a local agency and a person or entity, including,
but not limited to, a reimbursement agreement pursuant to
Government Code Section 66003, or to charges that are used to
pay existing debt service or which are subject to a contract with a
trustee for bondholders that requires a different accounting of the
charges, or charges that are used to reimburse the local agency or
to reimburse a person or entity who advanced funds under a
reimbursement agreement or contract for facilities in existence at
the time the charges are collected.
11. Subseauent Analvsis and Revision of the Fee.
The Fee set forth herein is adopted and implemented by the City
Council in reliance on the Record identified above. The City may
continue to conduct further study and analysis to detennine
whether the Fee should be revised. When additional information is
available. the City Council may review the Fee to determine that
the Fee amounts remain reasonably related to the impacts of
development within the City of Petaluma and areas included in the
City's General Plan. The City Council may revise the Fee to
i— 23
incorporate findings and conclusions of further studies and any
standards in General Plan and/or the General Plan FIR, as well as
increases due to inflation and increased construction costs.
12. Credits and Reimbursement for Developer Constructed Facilities.
The City and a developer may enter into an improvement
agreement to allow the developer to construct certain of the
Facilities. Entering such an agreement is within the City's sole
discretion. Such agreement shall provide for security for the
developer's commitment to construct the Facilities and shall refer
to this Resolution for credit and reimbursement. If the City enters
into such an agreement with a developer prior to construction of
one or more of the Facilities, the City shall provide the developer a
credit in accordance with the following:
a. Credit Amount. The credit shall be in the amount of the
lowest bid received for construction of the facility, as
approved by the Director. However, in no event shall a
credit pursuant to this provision exceed the estimated cost
of the developer constructed facility as identified in the
Report. For the purposes of this section, such current
facility cost shall be the amount listed in the Report for that
particular facility as subsequently adjusted pursuant to this
Resolution prior to issuance of City approval for that
facility. Once issued, credit pursuant to this section shall
not be adjusted for inflation or any other factor. Credit
provided pursuant to this section is not transferable.
b. Anolication of Credit. Credit pursuant to this section may
be applied by developers against the Fee applicable to a
particular project until the credit is exhausted or an excess
credit results. The total credit shall be divided by the
number of units (for a residential project) to determine the
amount of credit which can be applied against the Fee for
each unit and, if the credit per unit is less than the Fee per
unit, the developer shall pay the difference for each unit. If
a credit pursuant to this section is less than the Fee
applicable to a particular non-residential development
project, the developer shall pay the City the balance in
cash.
C. Reimbursement for Excess Credit. Reimbursement for
excess credit shall only be from remaining unspent Fee
revenues. Once all the Facilities have been constructed or
acquired and to the extent Fee revenues are sufficient to
/- 24
cover all claims for reimbursement of Fee revenues,
including reimbursement for excess credit, developers with
excess credit shall be entitled to reimbursement, subject to
such developers certifying in writing to the City that the
cost of constructing the facility which resulted in an excess
credit was not passed on to homeowners, and indemnifying
the City from land owner claims for reimbursement under
Government Code Section 66000 et seq. and Section 66001
in particular. If remaining fee revenues after all of the
facilities have been constructed or acquired are insufficient
to cover all claims for reimbursement of fee revenues, such
claims, including claims for reimbursement of excess
credit, shall be reimbursed on a pro rata basis in accordance
with applicable law.
13. Effective Date.
This resolution shall become effective 60 days from the date of its
adoption in accordance with California Government Code section
66017, subdivision (a).
14. Severabilitv.
Each component of the Fee and all portions of this Resolution are
severable. Should any individual component of the Fee or other
provision of this Resolution be adjudged to be invalid and
unenforceable, the remaining component or provisions shall be and
continue to be fully effective, and the Fee shall be fully effective
except as to that component that has been judged to be invalid.
15. SUnersession/Reneal/Savines.
All resolutions and parts thereof in conflict with the provisions of
this resolution are superseded and repealed, effective on the
effective date of this resolution. However, violations, rights
accrued, liabilities accrued, or appeals taken, prior to the effective
date of this resolution, under any chapter, ordinance, or part of an
ordinance, or resolution or part of a resolution, shall be deemed to
remain in full force for the purpose of sustaining any proper suit,
action, or other proceedings, with respect to any such violation,
right, liability or appeal.
I -25
Attachment 2
RESOLUTION ESTABLISHING ADMINISTRATIVE GUIDELINES PURSUANT
TO PETALUMA MUNICIPAL CODE SECTION 19.28.050 FOR PAYMENT OF
WASTEWATER CAPACITY FEES FOR QUALIFYING INDUSTRIAL
DEVELOPMENT
WHEREAS, the City Council last updated the City's Wastewater Capacity Fee
for New Development by Resolution No. 2014-041 N.C.S., adopted March 3, 2014; and,
WHEREAS, ten (10) days advance notice of the public hearing at which the City
Council considered the adoption of this resolution was given by publication in
accordance with Government Code Section 6062a; and,
WHEREAS, the City had prepared an Economic Development Strategy which
identified food and beverage processing as one of seven economic growth opportunities
for the City; and
WHEREAS, the Economic Development strategy contained analysis of a dozen
food and beverage processing companies with 1,150 employees earing from $11 to $51
per hour that supported an additional 3,670 jobs and generated $1.3 billion in economic
activity in the region and $99.4 million in state and local tares; and
WHEREAS, industry leaders have indicated that the current payment policies of
the wastewater capacity fees detrimentally affects their business growth because all fees
are due contemporaneously with issuance the building permit or industrial wastewater
discharge permit; and
WHEREAS, the City Council adopted Resolution No. 2013-025 N.C.S. entitled,
Establishing the City Council's Goals and Priorities for 2013 and 2014 which sets the
following goal: "Goal: Attract and Retain Businesses in Petaluma to enhance the tax
base, jobs and quality of life for the community;" and
WHEREAS, said goal contains the following priority: "Priority: Focus attention
on supporting food and beverage processing, manufacturing and alternative energy
business clusters'; and
WHEREAS, the wastewater enterprise fund currently carries outstanding debt of
approximately $122 million with a blended average interest rate of 3.02% for the
construction of the Ellis Creek Water Recycling Facility; and
WHEREAS, the City has experienced a significant increase in hydraulic, organic,
and solids loading to its sewer system as a result, in part, of increased or intensification of
operations of industrial customers that have not, heretofore, been required to pay
wastewater capacity fees commensurate with those increases in loading and impact on the
City's sewer system; and
WHEREAS, as a result, the City has not been able to collect the funds needed to
make upgrades and expand capacity to meet those impacts; and
WHEREAS, Petaluma Municipal Code Section 19.32.050 authorizes the City
Council to adopt administrative guidelines to provide procedures for calculation, payment
and other administrative aspects of the wastewater capacity fee.
NOW, THEREFORE, BE IT RESOLVED, that the City Council does hereby
establish Administrative Guidelines Pursuant to Petaluma Municipal Code Section
19.28.050 for the Payment of Wastewater Capacity Fees for Qualifying Industrial
Developments incorporated herein as Exhibit A, to be effective December 1, 2015.
1-2
Exhibit A
CITY OF PETALUMA, CALIFORNIA
MEMORANDUM
Public Works & Utilities
202 N. VcDoivell Bh d., Petaluma, CA 94954
(707) 778-4546 Fax (707) 778-4508
DATE: December 1. 2014
TO: Qualifying Industrial Developers
FROM: Dan St. John, RASCE — Director, Public Works and Utilities
SUBJECT: Administrative Guidelines for the Payment of Wastewater Capacity Fees for
Qualifying Industrial Development
Purpose: The purpose of these administrative guidelines is to provide a qualifying
industrial development an alternate schedule of payment to comply with the City's
Resolution for Wastewater Capacity Fees. In addition, these guidelines address the
process of reconciliation of wastewater capacity fees after completion and start-up of an
industrial development, including existing industrial developments that have significantly
increased hydraulic, organic, and/or solids discharges to the City sewer system since July
1, 2011 or since the date an industrial development paid wastewater capacity fees to the
City related to previous building permit and/or industrial wastewater discharge permit,
whichever date is later.
2. ADDlicability: These Administrative Guidelines shall apply to any existing or proposed
industrial development that meets the following criteria and shall hereafter be referred to
as a Qualified Industrial Development:
A. New or Expanded Industrial Developments:
A new or expanded Industrial Development that, based on projected
hydraulic, organic, and solids loading to the City sewer system, result in
an estimated wastewater capacity fee of $350,000, or more, and
ii. Will hire and continuously employ 35 or more additional employees in the
City of Petaluma within a two-year time frame from the date of certificate
of occupancy of a new or expanded facility, if applicable; or date of
obtaining a new or revised industrial discharge permit, whichever is later.
B. Existina Industrial DeveloDments: An Industrial Development that discharges to
the City sewer system of sufficient hydraulic, organic, and/or solids loading that
would result in a computed wastewater capacity fee of $100.000 or more based on
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Resolution #: 201.1-Y\\ N.C.S.
measurements and monitoring as required by the Sewer Use and Source Control
Ordinance (Petaluma Municipal Code Section 15.44-15.76).
Pavment of Wastewater Canacitv Fees: A developer of a new or expanded Qualified
Industrial Development may elect to pay the requisite wastewater capacity fee as follows:
A. Initial oavment: The developer shall pay:
i. a minimum of $125,000, of the calculated Wastewater Capacity Fee, if the
fee is between $250,000 and $1,000,000, or
ii. a minimum of $250,000 of the calculated Wastewater Capacity Fee, if the
fee is between $1,000,000 and $2,500,000, or
iii. a minimum of 10 percent of the calculated Wastewater Capacity Fee, if
the fee is greater than $2,500,000.
The wastewater capacity fee shall be based on the rates that are applicable at the
time of issuance of the building permit and/or the industrial wastewater discharge
permit and shall be due upon issuance of either permit.
B. Monthly navments: Beginning with the first month following payment of the
initial payment, the developer, or successor shall make equal monthly installment
payments until the balance of the wastewater capacity fee is paid in full, or until
the industrial development permanently ceases sewer discharges to the City sewer
system. The monthly payment amount shall be based on principal and interest of
the outstanding balance calculated for a 20 -year payment term based on an
interest rate as defined below.
C. Interest Rate: Interest rate shall be equal to the City's average interest paid on
bonds and loans used by the City to finance major sewer improvement projects,
plus 0.25 percent to cover City administration costs. The current average interest
rate on bonds and loans used to finance major sewer improvement projects is 3.02
percent; therefore the monthly payments shall be based on 3.27 percent interest.
Only the principal portion of the monthly payments shall apply to the payment of
the wastewater capacity fee. The interest rate shall remain fixed for the term of
the repayment period for the development regardless of whether the City obtains
additional loans or bonds that would cause the interest rate to be different that
stated above for a new development.
D. Vested Canacitv:
i. The calculation of Wastewater Capacity Fees, including reconciliation of
those fees, shall tale into consideration the Vested Capacity of a
Qualifying Industrial Development.
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Resolution #t: 2014 -XXX N.C.S.
An existing or expanded industrial development shall be entitled to
discharge wastewater to the City sewer system based on the hydraulic,
organic, and solids loading used to calculate a wastewater capacity fee that
was paid in conjunction with an issued building permit and/or industrial
discharge permit in the past.
iii. If no such fee has been paid to the City in the past, then a development has
a vested wastewater discharge capacity equal to the average flow,
Biochemical Oxygen Demand (BOD), and Total Suspended Solids (TSS)
discharged for the year ending June 30, 2011 based on records maintained
by the City for compliance with the Sewer Use and Source Control
Ordinance (Petaluma Municipal Code Section 15.44-15.76).
4. Reconciliation of Wastewater Capacity Fees: Reconciliation of the assessed wastewater
capacity fees for a Qualifying Industrial Development shall be as follows:
A. New or Expanded Development Within five years of payment of a wastewater
capacity fee, the developer or successor, or the City may request a reconciliation
of the wastewater capacity fees paid to the City. Not more than two
reconciliations shall be requested by either party during the five-year period. The
City shall establish a reconciliation period of up to 12 -months in which sewer
flows, and BOD and TSS loadings are monitored from the subject development.
A new capacity fee shall be calculated at the rates established by the Wastewater
Capacity Fee Resolution as applicable on the date the fee was paid for the flows
and loadings determined by monitoring during the reconciliation period. Payment
shall be made as specified in paragraph 5.C.1 and 2 of the Wastewater Capacity
Fee Resolution, except that the City shall reimburse any Initial Payment and/or
Montlrly Payments based on how the fee was originally allocated between the
Initial and Monthly Payments (e.g. reimbursement may be a combination of an
adjustment to the Initial Payment and/or to the Monthly Payments).
B. ExistinH Develonment: If, in the course of monitoring sewer discharges from an
existing industrial development, the City determines that the total discharges
would result in a capacity fee, based on the currently applicable Wastewater
Capacity Fee Resolution, of ten percent or more than that calculated for the vested
capacity for the development based on the same rates, then the City shall notify
the development and assess a monthly capacity rental fee as follows. High flows
resulting from storm events would not be tal.en into consideration for the purpose
of determining the wastewater capacity fee for this purpose:
i. The City will notify the industrial development or discharger of the City's
intent to charge a rental fee for the excess capacity fee above the
developer's vested capacity unless the discharge in reduced to within the
development's vested capacity, and
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Resolution #: 2014-Y1\ N.C.S.
ii. The City will provide the industrial user a 30 -day correction period to
reduce wastewater flows and loading to within ten percent of the vested
loading, and
iii. If, after the 30 -day correction period, the developer has not reduced the
wastewater flows and loading in accordance with 4.B.ii, above, the City
will begin charging a monthly Capacity Rental Fee based on measurement
of actual wastewater flows and loadings obtained through the industrial
discharge control program.
iv. Canacitv Rental Fee: The monthly capacity rental fee shall be based on
the difference between the wastewater capacity fee calculated on the
actual flows and loadings measured for the month and that for the vested
capacity. The monthly rental fee shall be the principal and interest
calculated on the difference described above based on the interest rate
defined in paragraph 3.C. and a 20 -year repayment period (e.g. Rental
Rate = [Difference X 0.03217 / 12] + [Difference / 240]).
V. Additional Vested Capacity: The industrial development or discharger has
the option of purchasing additional vested capacity, subject to availability,
to avoid the monthly capacity rental rate fee should the increases be
determined to be permanent.
vi. The provisions of this paragraph shall take effect beginning April 1, 2015,
notwithstanding the 30 -day notification and correction.
Enforcement of Payment: the City shall retain all legal and administrative power
currently applicable to payment of sewer charges in order to enforce payment including,
but not limited to, revocation of the development's industrial wastewater discharge
permit, and/or cessation of wastewater service, pursuant to the Sewer Use and Source
Control Ordinance (Petaluma Municipal Code Section 15.44-15.76).
A. Late Charees: Should the developer or successor fail to pay within 30 days of
receiving a monthly statement, the City may charge a late payment penalty of five
percent of the amount due.
B. If monthly payments received by the City from the developer are insufficient to
pay the entire amount due for wastewater usage fees, penalties, and the capacity
fee payments or capacity rental fee, the amount paid shall first be applied to
wastewater usage fees.
6. Refund Annlications Based on Wastewater Canacitv Fee Paid under the Current Fee
Resolution. Current owners of Qualifying Industrial Development that paid a wastewater
capacity fee pursuant to Resolution 2014 -XXX may apply for a refund of the difference
between that fee and the wastewater capacity fee that would have been imposed by a
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Resolution #: 2014 -XXX N.C.S.
future wastewater capacity fee resolution (`future fee") that may be adopted by the City
within four years of this Resolution, subject to the following:
A. To be eligible for a refund, current development owners must certify in writing to
the City that the owner has not recovered or is not recovering from third parties
such as tenants or others the amount of the prior fee paid or the amount by which
the prior fee exceeds the future fee.
B. Any refunds pursuant to this provision shall only be paid from existing, un -
obligated, unspent Fee revenue balances. The City will have no obligation to pay
refunds to any owner absent sufficient existing, un -obligated, unspent Fee revenue
balance available for that purpose.
C. If existing, un -obligated, unspent Fee revenue balances are insufficient to cover
eligible applications for refund, such eligible applications shall be paid refunds on
a pro rata basis in accordance with applicable law.
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Resolution #: 201.1 -XXX N.C.S.