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Consent-Community Services # 19.
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| Board of Supervisors |
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| Subject |
| Approve proceedings required by Proposition 218 to increase water and sewer fees for the Wild Wings County Service Area. (No general fund impact) (Bencomo/Espinoza) |
| Recommended Action |
- Initiate proceedings to consider proposed changes in the rate/fee structure for the collection of payment of water services and sewer services for the Wild Wings County Service Area (“CSA”);
- Direct staff to mail notice of the proposed fee increases for water service and sewer service to property owners within the Wild Wings CSA, at least 45 days before the public hearing, including notification of the opportunity to protest the proposed rate structure and increase as well as the notice of the public hearing;
- Direct the Clerk of the Board of Supervisors to publish a notice pursuant to Section 6066 of the Government Code;
- Set 9:00 a.m., on July 16, 2013, as the time and date of the public hearing to consider the proposed fee changes, and to receive and consider all public comments, including, but not limited to, any protests against the proposed fee increases; and
- Direct staff to prepare a resolution authorizing and levying modified and increased fees for water services and sewer services for the Wild Wings County Service Area in the event the increase is not successfully protested.
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| Strategic Plan Goal(s) |
| Provide fiscally sound, dynamic and responsive services |
| Reason for Recommended Action/Background |
The recommended actions are required to obtain authority to modify the rate/fee structure by which the collection for payment of water services and sewer service in the Wild Wings County Service Area occurs. These changes have been included in the Notices of Public Hearing and Protest (Attachment A). If the change or increase is subject to a majority protest, services to the community will be impacted. Based on the Wild Wings CSA full cost recovery of increased prices for operations and maintenance of water and sewer systems, the annual water and sewer expenditures will exceed annual revenue by approximately $ 108,173 collectively in 2013 should the proposed fee increases not occur.
BACKGROUND
Once the fee has changed, each homeowner in Wild Wings CSA will pay the full cost of service to the county, allowing the county to fully cover the expenses of its water and sewer operator on a monthly basis.
For the past several years, the cost to provide water and sewer service has increased significantly, and in order to continue to provide the service at cost, the county needs to increase revenues collected from property owners within the district, based on the forecasts made in the financial analysis (Attachment B). Any change in the fee is subject to Proposition 218, which requires more than 50%, plus one of the property owners to successfully protest a fee increase.
California American Water is the provider of the services through agreement with the CSA. Up until the past several years, the CSA has been paying a steadily increasing water fee which was covered by previous CPI increases. However, in this and the next fiscal year, the costs to the CSA of water and sewer agreements will increase due to additional required labor practices, odor mitigation, increasing infrastructure replacement, aging equipment, water quality treatment, etc. The CSA annual allotment of water per parcel will continue to be the same. However, the current charge of $ .055 or $ .06 (with CPI) per 100 gallons over the threshold of 250,000 gallons is not covering the cost of water production. The cost will increase to $ .30 per 100 gallons over 250,000 in order to cover the cost of water production. These anticipated fee increases were noted in the Public Notice for Increase Proceedings attached (Attachment A).
Currently Homeowners in Wild Wings are paying $486 per year for water base services, meaning for all water usage below 250,000 gallons. This equates to $.1717 per 100 gallons for the production of water below the threshold. Currently the operating cost of production is $.2847 per 100 gallons. This is an obvious disparity for the CSA as there is clearly less revenue that expense in water production. The needed increase is for a flat rate of $875 per year for water used under 250,000 gallons.
Another issue noted in the financial analysis is that per the Engineer’s Report Schedule of Depreciation for the Wild Wings Funds, the CSA Reserve is currently underfunded by approximately $332,000. Included in this increase is a 3 year capital reserve amount to provide for the depletion and shortfall in reserves. This equates to $350 per homeowner per year. Continued depletion of reserves would jeopardize the district’s ability to respond to an emergency, or the need for any capital replacement.
Homeowners in Wild Wings CSA are currently being charged a Water Treatment Charge which was approved in 2004, and implemented this fiscal year of 2012-13. This fee will continue and will not change.
Wild Wings CSA Sewer Charge is currently $1079 per year and will be changing to $1250. This increase will cover the costs of increasing contract expenses and funding of annual reserves as continuing odor mitigation at the Wastewater Treatment Facility. |
| Other Agency Involvement |
| Review of financial analysis has been done by the Wild Wings CSA Advisory Committee and Finance Subcommittee and Public Works Business Services. Supervisor Rexroad’s Office and County Counsel have reviewed as well. The fee increases have been discussed in detail at 2 CSA meetings and at the spring Homeowners Association Meeting as well. At the last CSA meeting, the Wild Wings CSA Advisory Committee made a recommendation that the Board of Supervisors proceed with the process required to raise sewer and water fees in order to maintain full cost recovery. The restructured and increased amounts are reflected in the attached Public Notice for Increase Proceedings. |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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Explanation (Expenditure and/or Revenue) |
| Further explanation as needed: |
| There is no fiscal impact to the general fund. Services provided to the county service area are paid for through revenues collected on the property tax bills of property owners in the CSA. This recommendation would also allow for full cost recovery for the delivery of services and administrative costs. |
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