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HomeMy WebLinkAbout2007-03-13 - AGENDA REPORTS - SAND CANYON SEWER FEE (2)PUBLIC HEARING 1011.14 04 SUBJECT: DEPARTMENT: Agenda Item: 7 CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval:-nl Item to be presented by: March 13, 2007 Ingrid Hardy ADOPTION OF SEWER CONNECTION FEE FOR SAND CANYON SEWER LINE Administrative Services RECOMMENDED ACTION City Council conduct a public hearing, and adopt a resolution to establish the sewer Connection Fee and its associated Application Fee for the Sand Canyon sewer area. BACKGROUND The Preserve in Sand Canyon (the "Developer") has requested reimbursement from surrounding property owners who benefit from and connect to the sanitary sewer improvements that were required as a result of development within the Sand Canyon area. The sanitary sewer improvements are located along Sand Canyon Road between Mandalay Road and Live Oak Springs Road. The Sand Canyon sewer improvements will serve the entire Sand Canyon area to the South of Live Oak Springs Canyon Road, from the ridgeline to the East of Sand Canyon Road, to the limits on the West side of Sand Canyon Road, and to the South all the way up to the limits of the National Forest. This area is depicted on the map on file with the City Clerk's Office. New development where the exterior boundary is within 200 feet of the existing sewer line will be required to connect Existing development will have the option to connect to the Sand Canyon sewer. Currently, existing development is utilizing septic, and it will be each property owner's voluntary option whether or not to participate in and connect to the Sand Canyon sewer. Cost estimates provided by the Developer and City staff have determined total project costs to be $1,071,834.12. The financial burden of the sewer improvements is upon the Developer. In an Adopted: Lima 07-13 effort to defray the financial burden, the parcels within the Sand Canyon sewer area that choose to connect to the sewer improvements will pay a Connection Fee. The Connection Fee will be reimbursed to the Developer no later than 30 days of the City's collection of payment from the benefiting property owners. Sand Canyon Overlay The City will overlay the streets in the sewer improvement area. After the streets have been overlaid, pursuant to City Council direction, the City does not allow the issuance of any permits to dig into the road for the next five years, unless it is an emergency such as a broken utility line. As such, property owners must connect to the system prior to the overlay. Public Participation To inform property owners of the proposed connection fee, staff mailed a letter to all affected property owners describing the sewer connection fee and provided a fact sheet on the frequently asked questions in connecting to a sewer line. The letter also discussed the City's plan to resurface Sand Canyon Road in June 2007, thus limiting the sewer connection time frame for property owners adjacent to the new sewer line. Lastly, staff held a public participation meeting on Thursday, March 1. The meeting addressed the background of the project, the concept and determination of the Connection Fee, the Sand Canyon Road overlay and the moratorium, and sewer lateral connections. Determination of Connection Fee: Arriving at the amount of the sewer connection fee per parcel includes the assumption that new connections to the utility system pay a proportionate share of the cost of the facilities required to serve the Sand Canyon sewer area's wastewater demands. In order to determine each user's proportionate share of the project costs, it is important to establish an equivalency connection unit, as it relates from one connection to another, in a manner that reasonably reflects each parcel's proportional use of the system. Equivalency factors classify wastewater connections; they serve as the means by which the cost of utility facilities can be allocated to types of new connections that are proportional to the demands they place'on the system. Each parcel within the Sand Canyon sewer area was assigned to a class based on actual or proposed land use. Land use refers to the type of development behind the wastewater connection, such as a single-family residence, church, subdivision, or other. Each parcel's land use was assigned utilizing Los Angeles County secured roll information and data from City Records. After each parcel was classified based on land use, they were then assigned an equivalency ratio. An equivalency ratio is the differential between the average demands of the basic connection class and those of other classes. Single-family residences are assigned to the basic class. The equivalency connection unit ("ECU") for the basic class is assigned 1.00. Those parcels not assigned to the basic class were assigned ECUs based on their proportionate demands placed on the system. Industry standards and equivalency factors that have been used by the City in the past were used to assign ECUs to those parcels. Once the basis for the sewer connection fee is determined (cost and demand), the Connection Fee per ECU can be calculated. The cost basis is the numerator of the computation: it represents the cost of the Sand Canyon Sewer that is or will be available to serve the Sand Canyon Sewer Area demands. The demand basis is the denominator of the computation; it represents the number of ECUs that can be served by the identified improvements. Then, multiplying the calculated sewer connection fee per ECU by the number of ECUs assigned to the parcel, a schedule of sewer connection fees for each parcel is derived. The cost per ECU in the Sand Canyon sewer area is $1,837.85. This includes the reimbursement for construction costs initially incurred by the Developer and the upfront administrative costs the Developer paid to the City to establish the sewer Connection Fee. Additionally, property owners will pay an application fee of $76.65 per application. For a parcel that is assigned multiple ECUs and subdivides but does not develop all of the newly created parcels, the parcel owner shall be responsible for paying the sewer connection fee on those parcels that are developed. ECUs will be recalculated on all of the newly created parcels in order to determine the total sewer connection fee for each developing parcel and the sewer connection fee for each parcel that remains undeveloped. Additionally, a parcel's ECU assignment will be recalculated if that parcel develops in a manner that is different from the original land -use assignment at the time of establishing the sewer Connection Fee. The ECU recalculation will be based upon the new land -use classification. The sewer connection fee for that parcel will then be recalculated by multiplying the number of newly assigned ECUs by the $1,837.85 fee per ECU. Furthermore, if another application is required, the property owner will be required to pay another application fee. The Connection Fee is an established fee and will not be annually adjusted by any inflationary factor, while the application fee for administrative costs incurred by the City will be adjusted each fiscal year by the Consumer Price Index (CPI) for all Urban consumers in Los Angeles -Riverside -Orange County for December of the preceding fiscal year. Termination of Fee The industry standard for a connection fee of this type is 20 years. As such, staff recommends the termination of the proposed connection fee be May 14, 2027 or when payments to the developer total $954,211.72, whichever occurs first. ALTERNATIVE ACTIONS Other direction as determined by City Council. FISCAL IMPACT There is no fiscal impact to the City for the establishment of the Sand Canyon sewer connection fee. ATTACHMENTS Resolution Sand Canyon Sewer Connection Parcel Roll available in the City Clerk's Reading File Sand Canyon Sewer Connection Fee Report available in the City Clerk's Reading File CITY OF SANTA CLARITA NOTICE OF PUBLIC HEARING SEWER CONNECTION FEE FOR SAND CANYON PUBLIC NOTICE IS HEREBY GIVEN: A Public Hearing will be held before the City Council of the City of Santa Clarita on March 13, 2007, at or after 6:00 p.m. in the City Hall Council Chambers 23920 Valencia Blvd., I" Floor, to consider fees to establish a sewer connection fee and the associated application fee within the Sand Canyon area. The purpose of the sewer connection fee is to provide a mechanism for the developer of the sewer in the Sand Canyon area to recover costs. The connection fee amount will be based on a fair share use of the sewer and will be collected from property owners, who choose to connect to the system, upon connection to the sewer system. The purpose of the sewer application fee is to recover the costs associated with processing the applications of property owners that connect to the sewer line. Pr000sed Sewer Connection Fee The Sand Canyon Sewer Connection Fee Report sets forth the total cost of the improvements. If the proposed connection fee and associated application fee is approved, beginning May 14, 2007, the City Council may impose the connection fee at any rate or amount that is less than or equal to the net connection fee amount. In subsequent fiscal years beginning with fiscal year 2007/2008, the application fee will be increased each year based upon the greater of the latest Consumer Price Index for the Los Angeles -Orange -Riverside County Area. Sewer Connection Fee Report For a detailed description of the boundaries of the proposed connection fee area, the improvements, and the proposed connection fees, please refer to the Sand Canyon Sewer Connection Fee Report prepared in connection with the proposed project. This report is on file in the office of the City Clerk, 23920 Valencia Boulevard, Santa Clarita, California. Proponents, opponents, and any interested persons may appear and be heard on this matter at that time. Further information may be obtained by contacting Ingrid Hardy, Management Analyst, at (661) 286-4068. Dated: February 27, 2007 Sharon L. Dawson, CMC City Clerk Publish Date: March 2, 2007 S:TNUATinanee011 Cloyd\03.13PH notioe.doc Ra