HomeMy WebLinkAbout04/05/1988, 2 - AMENDMENT TO THE MUNICIPAL CODE SECTION 13.04.090 TO INCREASE IN WATER ACREAGE AND FRONT FOOTAGE CHARGES. flII�I�fWlgl�l�� llllll Cityof SA1 l LUIS OBISPO MEETING GATE:
U April 5 1988
COUNCIL AGENDA REPORT ITEM NUMBER:
FROM:David F. Romero, Director William T. Hetlan � repared By: Linda Herman
Public Works Department Utilities Mana er Water Conservation Coordinator
SUBJECT:
Amendment to the Municipal Code Section 13 . 04 . 090 to
increase in water acreage and front footage charges.
CAO RECOMMENDAMON:
Adopt resolution revising water acreage and front footage
charges. Pass to print an ordinance amending Municipal Code
Section 13 . 04. 090 establishing an indexing system for annually
updating water acreage and front footage charges.
BACKGROUND:
The City of San Luis Obispo Municipal Code Section 13 . 04 . 090 .
Additional Charges for Service stipulates that in addition to
charges for new water service that there be an acreage charge for
all property that is within the city limits. The acreage charge is
a buy in charge for new development which covers the cost of
existing capital facilities that will benefit the development.
The code stipulates that these charges be based upon the
replacement value of the water treatment, storage and transmission
mains owned by the city, and then divided by the number of acres
served within the city. The code also makes provisions for a front
footage distribution main charge which is based upon a prorata
share of the cost of an adequate water distribution main.
In the past, the City's water acreage and front footage charges
were reviewed and amended periodically by City Council. Staff
generally made recommendations for increases in charges by
utilizing the average Engineering News Record Construction Cost
Index for Los Angeles and San Francisco as a basis for determining
the increase in the replacement value of existing water
facilities.
The index is a weighted-aggregate of the prices of constant
quantitites of construction materials and common labor. Steel ,
lumber, and cement are the standard construction materials used as
components to the index. These materials were chosen for their
relationship to the nation's economy and price structure, making
them least influenced by local conditions. They are also
predominantly used in almost all construction projects.
The index was designed to indicate underlying trends of
construction costs in the United States and to give an estimate of
the basic costs involved in any general-purpose construction
project. Therefore, the construction. cost index is a good
indicator of the change in cost of the replacement value of water
treatment, storage and transmission mains used in determining the
appropriate water acreage and front footage charges for new
connections. Using this basis eliminates the need to calculate the
replacement value each time an increase is needed. ^ /
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COUNCIL AGENDA REPORT
Page Two
Acreage
The water acreage and front footage charges were last amended in
March, 1979. In March 1979, the average of the Los Angeles and San
Francisco construction cost index was 287. It is currently 466 .
This represents an increase in construction cost of 64%. Staff is
recommending that the acreage and front footage charges be increased
by 64% so that they better reflect the current cost of replacement.
The acreage and front footage costs are currently $1160 per acre and
$11.60 per foot respectively. The proposed increase of 64% will
make the charges $1900/acre for the acreage charge and $19. 00/foot
for the front footage charge. Assuming approximately 6 dwelling
units per acres, this results in an increase of $124. 00 over the
existing $193 .00 fee for a total of $317. 00 per new single-family
dwelling unit.
This compares favorably with similar charges from other cities
within the area. Examples of these fees are as follows:
San Luis Obispo (current) $ 193 per single-family dwelling unit
San Luis Obispo (proposed) $ 317 per single-family dwelling unit
Santa Barbara $ 900 per single-family dwelling unit
Simi Valley $1,295 per single-family dwelling unit
Pismo Beach $1,500 per single-family dwelling unit
Templeton $2, 300 per single-family dwelling unit
Morro Bay $2,750 per single-family dwelling unit
This proposed increase in water acreage and front footage fees is an
interim measure to try and bring the fees up-to-date. The Draft
Water Management Plan identified additional connection fees as a
funding source for expansion related capital projects. The
comprehensive financial study currently underway will also evaluate
the fee structure and may make further recommendations.
In addition to increasing the water acreage and front footage fees,
staff is also recommending that the Municipal Code Section 13 . 04 . 090
be amended to require annual review and amendment of the connection
fees in conjunction with the year ending report of the Engineering
News Record Construction Cost Index. It is recommended that the
acreage charges be adjusted automatically each year according to the
construction cost index.
The adjustment will be made based upon a comparison of the average
of the Los Angeles and San Francisco construction cost indexes (CCI
using base year 1967 = 100) for December of the current year and the
CCI of the base year of March 1988 (466) . The calculation will be
made as follows:
Current Year CCI X 1900 = New Water Acreage Fee
466
Current Year CCI X 19.00 - New Water t Footagg Fee
466
���H���ui�IIIIIII�p j��llll MY Of San Cues OBISp0
Nis COUNCIL AGENDA REPORT
Page Three
acreage
This amendment would alleviate the need for Council approval each
time an increase is proposed and will result in smaller incremental
increases instead of large infrequent ones. For example, if the
current code required amendments annually, then the proposed acreage
charges would have been increased by only an average of 6% each
year, instead of a 64%. This automatic increase in relation to the
construction cost index is easier to administer, puts less burden
upon the public to come up with substantial increases in fees over a
short time, and makes the fee more representative of the actual
replacement value of capital facilities.
The increase in the acreage and front footage fees will require
Council approval by resolution. The current Municipal Code Section
13 .04.090 and proposed amendments read as follows:
"In addition to the charges set forth in Section 13.04 . 080,
acreage and distribution charges for water connections shall be
determined//Affd/ /flu'/ice'/ib/M J,/h(�/8�e�feLbfl'/i� /hfe�hildz►tt,d
04//�VO/AW$¢,W and amended annually January 1, of each year,
and such charges shall be payable in advance upon connection to
the water system. The charges shall be determined on the
following basis:
A. An acreage charge for all property that is within the city
limits, requires water service and has not previously received
such service. Such acreage charge shall be based upon the
replacement value of the water treatment, storage and
transmission mains owned by the city, iCYJ� 3d/ Y//lzk / /1Dif
,a � / IitplXYySa(/ /Cid// The acreage charge shall be
adlusted each year in accordance with the Engineering News
Record Construction Cost index or reviewed as necessary. The
annual adjustment will be made based on the average of the Los
Angeles and San Francisco construction cost indexes (CCI) from
the Engineering News Record December publishing and the CCI of
the base year of March 1988 (466 on 1967=100 base) . The
calculation will be made as follows:
Current Year CCI x 1900 = New Water Acreage Fee
466
Current Year CCI % 19.00 = New Water Front Footage Fee
466
Such acreage charge shall be proportionately. . . "
O-3
city Of San LUIS OBISPO
COUNCIL AGENDA REPORT
Page Four
acreage
FINANCIAL
Acreage charges have brought in, on the average, $80, 000 in
revenue for the water fund. Assuming the same level of
development, it is estimated that the proposed increase in acreage
charges will bring in an additional $50, 000 in revenues for a total
of approximately $130,000 each year.
RECOMMENDATIONS
It is recommended that Council approve the proposed amendments to
the Municipal Code Section 13.04. 090 and the corresponding
increases to the existing water acreage and front footage charges
for the City.
RESOLUTION NO. (1988 Series)
A RESOLUTION OF THE COUNCIL OF THE
CITY OF SAN LUIS OBISPO ESTABLISHING
NEW WATER ACREAGE AND FRONT FOOTAGE FEES.
BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The following fees are established in accordance
with provision of Municipal Code Sections 13. 04 . 090 and 4. 20. 040 -
Additional Charges for Water Service:
(1) Acreage Charge: $1,900 per acre
(2) Front Footage Charge $19.00 per foot
SECTION 2 . This resolution shall become effective
immediately upon adoption.
On motion of seconded
by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was passed and adopted this day
of , 1988.
ATTEST:
MAYOR RON DUNIN
CITY CLERK PAM VOGES
ORDINANCE NO. (1988 Series)
AN ORDINANCE OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AMENDING SECTION 13.04.090 OF THE
SAN LUIS OBISPO MINICIPAL CODE
WHEREAS, the Council has determined that water acreage and
front footage charges should be updated annually to reflect changes
in the replacement value of the City's capital facilities and
WHEREAS, the Council had determined that using the Engineering
News Record Construction Cost Index represents changes in
construction costs;
BE IT ORDAINED by the Council of the City of San Luis Obispo as
follows:
SECTION 1. Municipal Code Section 13 . 04.090, Additional
Charges for Water Service, is hereby amended to read as follows:
13. 04. 090 Additional charges for service.
In addition to the charges set forth in Section 13 . 04. 080,
acreage and distribution charges for water connections shall be
determined and amended annually January 1, of each year, and such
charges shall be payable in advance upon connection to the water
system. The charges shall be determined on the following basis:
A. An acreage charge for all property that is within the city
limits, requires water service and has not previously received such
service. Such acreage charge shall be based upon the replacement
value of the water treatment, storage and transmission mains owned
by the city. The acreage charge shall be adjusted each year in
accordance with the Engineering News Record Construction Cost Index
or reviewed as necessary.
a-6
The annual adjustment will be made based on the average of the Los
Angeles and San Francisco construction cost indexes (CCI) from the
Engineering News Record December publishing and the CCI of the base
year of March 1988 (466 on 1967=100 base) . The calculation will be
made as follows:
Current Year CCI X 1900 = New Water Acreage Fee
466
Current Year CCI X 19. 00 = New Water Front Footage Fee
466
Such acreage charge shall be proportionately adjusted for parcels
smaller or larger than one acre. Such charges shall also be levied
against subdividable portions of larger parcels currently being
served when such subdividable portions require additional water
service. Credit shall be allowed for one parcel of land, or the
area actually benefiting from the service to be determined by the
public works director to a maximum of one acre. Parcels larger than
one acre and non-subdividable under the zoning ordinance, codified
in Title 18 of this code, may be charged for the area to be
utilized, as determined by the public works director, with a
minimum share being for one acre. If subdividison (or further
development) is permitted in the future, additional charges will be
required.
�1
SECTION 2. A summary of this ordinance, approved by the City
Attorney, together with the ayes and noes, shall be published at
least five (5) days prior to its final passage in the
Telegram-Tribune, a newspaper published and circulated in said
City, and the same shall go into effect at the expiration of thirty
(30) days after its said final passage. A copy of the full text of
the ordinance shall be on file in the office of the City Clerk on
and after the date following introduction and passage to print and
shall be avaliable to any interested member of the public.
INTRODUCED AND PASSED TO PRINT by the Council of the City of
San Luis Obispo at a meeting held on the day of ,
1988, on motion of , seconded by ,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
Mayor Ron Dunin
ATTEST:
City Clerk Pam Voges