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Time Set # 21.
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| Board of Supervisors |
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| Subject |
| Hold a Proposition 218 public hearing, tabulate protests and, if no majority protest exists, adopt resolution increasing water fees for future fiscal years in support of the Water System Consolidation Project for the North Davis Meadows County Service Area; adopt related resolutions required for a State Revolving Fund loan to finance the project; adopt resolution extending the term of the $430,000 bridge loan from the Demeter Fund for project design; adopt Addendum to Initial Study/Negative Declaration for project pursuant to CEQA. (Demeter fund impact $430,000) (4/5 vote required) (Blacklock/Gabor) |
| Recommended Action |
- Hold a Proposition 218 public hearing, direct staff to tabulate protests and, if no majority protest exists, adopt resolution increasing water fees for future fiscal years in support of the Water System Consolidation Project for the North Davis Meadows County Service Area (CSA) (Att. C) and direct the Clerk of the Board to forward a certified copy of the resolution to the Department of Financial Services;
- Adopt related resolutions required for a State Revolving Fund (SRF) loan to finance to the project:
- Resolution Pledging Revenues and Funds for the North Davis Meadows County Service Area Water System Consolidation Project (Att. D);
- Authorizing the County Administrator to Sign Financing Agreement, Amendments and Certifications for Funding for the North Davis Meadows County Service Area Water System Consolidation Project (Att. E);
- Resolution Approving Claims for Reimbursement for the North Davis Meadows County Service Area Water System Consolidation Project (Att. F);
- Adopt resolution extending the term of the $430,000 bridge loan from the Demeter Fund for project design (Att. G). (4/5 vote required);
- Adopt the addendum to the Initial Study/Negative Declaration (Att. H and I, respectively) and direct staff to file a Notice of Determination
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| Strategic Plan Goal(s) |
Operational Excellence
Thriving Residents |
| Reason for Recommended Action/Background |
The recommended actions are to adopt a water fee change to cover the cost of providing potable (drinking) water service to the North Davis Meadows CSA via the Water System Consolidation Project, and to adopt resolutions that support financing of the project. Future water service to the community will be adversely impacted unless a fee increase occurs. Any change in the water fee is subject to Proposition 218 which requires the CSA to hold a public protest hearing prior to adopting the proposed fee increase. If more than 50% of the affected property owners submit written protests against the proposed fee increase, the increase cannot be adopted.
Background
Since 2010, the CSA has been working toward a permanent solution for mitigation of water quality concerns in the community, most notably nitrate, hexavalent chromium, aluminum and iron in excess of maximum contaminant levels. After assessing a variety of options for providing a potable water supply that meets all drinking water standards, the County and CSA concluded consolidating with the City of Davis public water system was the most reliable and cost-effective method to comply with California drinking water regulations and to ensure the health and safety of the residents of North Davis Meadows. On February 28, 2016, and again on November 8, 2017 following a change in the project, the Davis City Council directed their staff to provide a water service "will serve" letter to Yolo County for the North Davis Meadows CSA.
On May 31, 2016, a Proposition 218 hearing was held to increase the North Davis Meadows CSA water fee in an amount necessary to repay an anticipated State Revolving Fund (SRF) 20 year planning loan to cover the cost of design of the water consolidation project. The increased water fee was first collected in 2016-17 and is again being collected in 2017-18. While design commenced in December of 2016, it was discovered SRF planning loans must be repaid within 5 years. On behalf of the North Davis Meadows CSA, staff changed course and is in the process of applying for a combined SRF construction loan which includes planning expenses and which can be repaid over 30 years. In the meantime, staff obtained an interim one-year loan from the County for the design work which was already underway. Design ultimately took longer than expected following recommendations from the City of Davis concerning fire protection.
On January 16, 2017, West Yost Associates delivered draft Plans, Specifications & Estimates for the project that estimate construction costs and the costs to decommission/demolish the existing wells at $5,486,000. Design of the project, the fee study, City connection fees, construction management and project management costs bring the entire project estimate to $8,349,301. Beyond these anticipated costs, the State requires x1.1 debt coverage (collection of 110% of the project cost in the event payments are missed) for their loan and their current interest rate is 1.8%.
Final project cost estimates and property owner rates are outlined in the public hearing notice and Engineer's Fee Report attached. Rates recognize and credit fees collected to date for the design. Should construction costs vary, rates will be adjusted accordingly with subsequent Proposition 218 proceedings.
The public notice was mailed to residents by the end of January 2018. On February 1, a CSA Advisory Committee meeting was held to provide the community information about the project and to answer questions from residents. Materials related to the project and Proposition 218 proceedings have also been posted on www.yolocounty.org/North-Davis-Meadows-CSA.
This project will result in water service from the City of Davis to 94 homes, a vacant lot, fire hydrants and common use areas in the North Davis Meadow CSA. The project will also include a connection to the Davis Municipal Golf Course Clubhouse which will be paid for by the City of Davis. |
| Collaborations (including Board advisory groups and external partner agencies) |
| North Davis Meadows CSA Advisory Committee, City of Davis, California Water Resources Control Board, Financial Services, County Counsel |
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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: |
| The loan from the Demeter Fund of up to $430,000 for design of the Water System Consolidation Project is expected to be repaid following award of an SRF loan, anticipated in fall of 2018. |
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