AgdaPkt 2008-06-09 - Laserfiche WebLink

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78 Page 1 REPORT To the Honorable Mayor and City Council From th~ Oity Manager June 9, 2008 SUBJECT Ordinance amendment to increase the Wastewater Treatment Capacity Fee and modify the fee calculation formula. RECOMMENDATION Introduce an ordinance to amend Section 27.101 of the Municipal Code to increase the Wastewater Treatment Capacity Fee from $2.65 to $7.91 per gallon, and modify the City's fee calculation formula to correlate with method used by the South Bayside Systems Authority. BACKGROUND The City's wastewater is processed at a treatment plant operated by the South Bayside Systems Authority (SBSA), which is owned by four jurisdictions - the cities of Belmont, Redwood City, San Carlos, and the West Bay Sanitary District. In the late 1980's, the SBSA committed to a program for growth entitled Stage 2 Capacity Expansion. Stage 2 Capacity Expansiorr- . increases the plant processing capacity from 24 to 29 million gallons per day (MGD) . provides member agencies the opportunity to purchase additional capacity for future development The Wastewater Treatment Capacity Fee is used to purchase treatment capacity from SBSA and is a "pay-as-you-go" program. The City collects the one-time fee when a new sewer connection is requested for new development. The City then forwards collected fees quarterly to SBSA to purchase additional wastewater processing capacity. The City has purchased 0.794 MGD of the total available 2.685 MGD Stage 2 Capacity Expansion as of the end of Fiscal Year 200612007. Processing capacity currently costs $2.65/gallon and has not been adjusted since 1997. The rate is determined by SBSA and is based on the projected construction costs to expand the physical plant. On July 12, 2007, the SBSA Commission approved a capacity charge increase from $2.65/gallon to $12.40/gallon. However, after review by the SBSA Technical Advisory Committee, the construction costs for wet weather improvements - originally budgeted as part of the Stage 2 Capacity Expansion project - were accommodated in SBSA's ten-year capital improvement project. As result, the originally proposed increase of $12.40/9allon was reduced to $7.91/gallon. On March 12, 2008, the. SBSA Commission voted to establish the cost of treatment capacity as $7.91/9allon (Resolution No. SBSA 08-07). The Wastewater Treatment Capacity Fee is paid by a customer to the City when request is made for a new sewer connection. The City calculates the fee charged to applicants based on an estimate of the amount of waste expected to be generated by a project. A single-family residential unit is expected to generate a volume of 270 gallons of waste per day. At a unit cost of $7.91/gallon, the City's Wastewater Treatment