AgdaPkt 2007-06-04 - Laserfiche WebLink

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REPORT To the Honorable Mayor and City Council Frorn the City Manager June 4, 2007 SUBJECT Water Capacity Charge to support increased reliability of the water supply RECOMMENDATION Staff recommends that the Council: {1) approve, by resolution, the amendment of Attachment Q to the Engineering Standards for the City; and (2) introduce an Ordinance to establish a Water Capacity Charge, which requires amendment of the City Ordinance, Chapter 38, Wafer System Regulations, to add Section 38.15, Water Capacity Charge. BACKGROUND The key points regarding the Water Capacity Charge are summarized below: • Currently the City's water demand exceeds the water supply assurance from the San Francisco Regional Water System. • Phase One of the Project (recommendations from the Recycled Water Task Force -recycled water implementation and synthetic field conversion) is funded through approximately $72 million in revenue bonds. The bonds are being repaid through water rates because the band holders require a predictable revenue source. • This payment arrangement creates inequity since new developments/connections will not pay their fair share, but will benefit from the increased water supply assurance. • The purpose of the proposed Water Capacity Charge is to fairly distribute the cost of providing increased water supply reliability to new developments/connections. • The proposed rate for the Water Capacity Charge is considered at the lower range of possible rates because only the cost of phase one of the recycled water project is divided by the overall maximum production capability. • The charge calculation is based on the projected water demand of new connections as derived from factors in the revised Attachment Q of the Engineering Standards. • Revisions to Attachment Q are limited to the residential water use projection, and are consistent with the 2006 Nexus Study based on the 2000 census data by the City's Parks, Recreation and Community Services Department. !n January 2002, the City Council set broad community priorities including addressing water supply assurance by eliminating San Francisco Regiona! Water System contractual supply assurance overdraft by 2010, implementing a water recycling project, and continuing aggressive water conservation efforts. In 2004, after an extended process of community involvement, the City Council adopted the Project alternative recommended by the Community Task Force on Recycled Water. This Project, which includes both facilities for production and distribution of recycled water and replacemen# of grass at athletic fields with synthetic turf, is currently underway. It has been funded through the issuance of approximately $72 million in revenue bonds authorized by the City Council in 2006. Because paying the debt 7A Page 1