HomeMy WebLinkAbout04-03-2018 Item 11 - Capital Facilities Fee Program Update/Nexus Study (AB 1600) Ordinance (1st Reading) and Water and Wastewater Development Impact Fees (by Resolution)
Meeting Date: 4/3/2018
FROM: Michael Codron, Community Development Director
Prepared By: Xzandrea Fowler, Community Development Deputy Director
SUBJECT: CAPITAL FACILITIES FEE PROGRAM UPDATE/NEXUS STUDY (AB 1600)
ORDINANCE INTRODUCTION AND WATER AND WASTEWATER
DEVELOPMENT IMPACT FEE PROGRAM
RECOMMENDATION
1. Receive a presentation on the Capital Facilities Fee Program Nexus Study, which identifies
various infrastructure projects associated with transportation, parkland and park
improvements, police, fire, and general government facilities, and calculates new
development’s fair share of the cost of these facilities; and
2. Consider recommended policy adjustments to reduce the fair share for new development to
ensure the feasibility of various development types, including multi -family and smaller
single-family units; and
3. Introduce an Ordinance and Resolution to adopt and implement the recommended Capital
Facilities Fee Program; and
4. Adopt a Resolution to adopt and implement the recommended Water and Wastewater
Development Impact Fee Program.
REPORT-IN-BRIEF
This project is an important implementation item for the 2014 Land Use and Circulation Element
update and accomplishes key action items identified in the Major City Goals for Fiscal Health
and Responsibility, and Housing Production. This report and accompanying documentation
includes the necessary analysis and studies to substantiate revisions and additions to the City’s
current development impact fees. The nexus studies that have been prepared to support the
Capital Facilities Fee Program, and the Water and Wastewater Development Impact Fee
Program, provide the City of San Luis Obispo with the necessary technical documentation to
support the potential adoption of:
1. An updated transportation development impact fee;
2. A modified parks and parkland in-lieu fee;
3. Updated water and wastewater development impact fees; and
4. New general government, police, and fire development impact fees.
The adoption of a revised Capital Facilities Fee Program, and Water and Wastewater
Development Impact Fee Program, and the careful investment of development impact fee
revenues along with other local, State, and Federal sources of funding for infrastructure, will
ensure that adequate infrastructure will be available to support growth of the City as envisioned
in the General Plan and enhance quality of life for existing residents.
In total, the projects included in the Nexus Study will cost $360 million to deliver (excluding
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cost associated with parkland acquisition and improvement projects that will be identified in the
update of the Parks and Recreation Element/Master Plan). Of this total, $209 million is identified
as the maximum amount that could be recovered through impact fees, consistent with the
requirements of AB 1600. As illustrated in the following table, the gap between the “Total Cost”
and the “Reduction Strategy CFFP Revenue” (equal to $214 million) will require funding from
other sources (grant, regional, General Fund) and is not currently included in General Fund long-
range forecast projections. The proposed reduction strategy is intended to ensure development
feasibility, and incentivize smaller, more affordable housing units. The strategy increases the gap
between the total project cost and the available fee revenue to pay for those projects by $63
million.
DISCUSSION
General Plan Policies
The City of San Luis Obispo General Plan, Land Use Element Policy 1.13.9, Costs of Growth,
states the following:
The City shall require the costs of public facilities and services needed for new
development be borne by the new development, unless the community chooses to help pay
the costs for certain development to obtain community-wide benefits. The City shall
consider a range of options for financing measures so that new development pays its fair
share of costs of new services and facilities which are required to serve the project, and
which are reasonably related to the new growth attributable to the development.
Some of these “costs of growth” are paid for by new development either through the direct
construction of an infrastructure project (such as a roadway or water line needed to serve that
development), or by payment of a development impact fee. During previous study sessions on
this topic, the Council has directed staff not to charge the maximum fees to ensure that
development remains feasible, and to incentivize the construction of smaller, more affordable
housing units. The fee structures recommended have all been evaluated to ensure feasibility, and
are tiered to incentivize smaller, more affordable housing units.
Mitigation Fee Act
The Mitigation Fee Act (Assembly Bill 1600) is contained in California Government Code
Section 66000 et.seq., established constitutional limits and “ground rules” for the imposition and
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administration of impact fee programs. The Act became law in January 1988 and requires local
governments to document the following when adopting an impact fee:
1. Identify the purpose of the fee;
2. Identify the use of the fee revenues;
3. Determine a reasonable relationship between the use of the fee and the type of
development paying the fee;
4. Determine a reasonable relationship between the need for the fee and the type of
development paying the fee; and
5. Determine a reasonable relationship between the amount of the fee and the cost of the
facility attributable to development paying the fee.
In summary, a fee cannot collect more than the cost of the public facility needed to accommodate
the new development paying the fee. AB 1600 establishes the legal requirement for there to be a
nexus between the project and fee. In addition, fee revenues can only be used for their intended
purpose.
Previous City Council Direction
On October 17, 2017, the City Council participated in Study Session #1 (Attachment F) to
review and provide direction on the preliminary results of the Capital Facilities Fee Program
Nexus Study. The preliminary results presented during that study session represented the
maximum fees that could be charged to development based on a list of identified
facilities/infrastructure improvements and/or service levels desired, consistent with legal nexus
requirements and fair-share analysis that are necessary to support development through the
buildout of the 2035 General Plan. The Council considered the effect of implementing a
maximum fee program and provided staff with guidance regarding policy considerations that
incorporate analysis of the total fee burden, impacts to affordable housing objectives,
identification of alternative infrastructure funding sources, refinement of the list of identified
transportation and park and recreation facilities/infrastructure improvements.
In response, staff and the consultant team revised preliminary nexus study results and presented
them to the City Council on January 9, 2018 during Study Session #2 (Attachment G). Council
directed staff to evaluate further policy adjustments to ensure feasibility, even if it resulted in a
recommendation to charge less than the maximum fees identified in the Nexus Study, to collapse
the transportation component of the fee program into a single Citywide program “one happy
family”, and to incentivize the development of missing middle housing by reducing the overall
fee burden on the development of small lot single family unit and multi-family residential units.
Provided below is a Table that summarizes how the Transportation Impact Fee component of the
CFF Program has evolved through this process over the course of the last six months. The
recommended fees shown in the previous table reflect the fee reduction strategy that was
developed to address Council direction from the study sessions and feedback from outreach with
the development community and stakeholders.
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Water and Wastewater Capacity and Connection Fees
On October 17, 2017, City Council also considered final adoption of the Water and Wastewater
Capacity and Connection Fees (Attachment I). City Council deferred the adoption of the
proposed fees to better understand the total fee burden on new development.
The October 17, 2017 staff report included a recommendation and three alternatives
(Attachment H). Based on Council direction received during the subsequent study session
related to the CFF Study and the total fee burden, Alternative 1 for water and Alternative 3 for
wastewater proposed on October 17, 2017 are now recommended. This change results in the
removal of $22.7 million and $10.9 million of capital infrastructure for water and wastewater
respectively from the fee program placing a greater portion of the capital improvement cost on
water and wastewater ratepayers. Returning to the term “development impact fee” instead of the
term “capacity and connection fee” will best communicate the alternative fee.
Community Outreach
Staff actively engaged with a variety of stakeholders throughout the process, beginni ng with a
Developer’s Roundtable meeting in June 2017, followed by additional meetings in October 2017,
December 2017, and March 2018. All of which were well attended by a variety of
representatives from the development community. In addition to those meetings, staff presented
the evolving fee programs to the Chamber of Commerce, EVC, Home Builders Association,
Save Our Downtown, the Bicycle Advisory Commission, and the Planning Commission.
Following the completion of the administrative draft Capital Facili ties Fee Program Nexus Study
staff embarked on a “Outreach Roadshow” from February 26, 2018 to March 9, 2018. During
this time frame staff shared the findings of the Nexus Study and met individually with
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developers, property owners, and stakeholders in the community to discuss how the
recommended fees would impact their specific projects. Some of those meetings resulted in
further refinement of the nexus study analysis and the feasibility considerations.
Recommended Capital Facilities Fee Levels
The recommended fee levels for the Capital Facilities Fee Program reflect a reduction strategy
that was developed by staff and the consultant team in response to Council direction received
during the two study sessions along with feedback received from the development community
and stakeholders throughout the process. Provided below is a summary of the components of the
policy reduction strategy:
• Transportation – the Single-family fee is tiered to incentivize smaller, more affordable
units, maximum fee applies to single family units that are 1,400 sq. Ft. and larger, and for
single family units that are less than 1,400 sq. Ft. fees decrease proportionally by size.
• Transportation – Multi-family fee is tiered so that the multi-family fee never exceeds the
single-family fee for the same unit size.
• Transportation – Retail and Hotel uses are discounted by 60% (modified from existing
50% discount).
• Transportation – Office and Industrial uses are discounted by 15%.
• Parkland – Only single family and multi-family development will be charged impact fees.
Non-residential uses will not be charged development impact fees.
• Public Safety – Police fees are discounted by 50%.
• General Government – Fees will not be charged. The impact of this approach is that
should City administrative facilities need to expand as the Community grows, 100% of
the costs will need to be borne by other sources.
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While development impact fees overall are increasing, it is important to point out that with the
policy level recommendations, the Transportation Impact Fee component is decreasing by
approximately 11% or $13 million as compared to the City’s current transportation impact fee
program. Because multiple fee program areas are being consolidated into a Citywide fee, some
areas will realize an increase whereas some will realize a decrease in rates. An example of this is
within the Margarita Area, transportation fees for a single-family resident base fee will be
reduced from $12,928 to $9,828, over a $3,000 reduction per unit. This is consistent with
previous recommendations to reduce the geographic disparities and overall complexity of the
City’s development impact fee programs.
Implementation and Administration of the Capital Facilities Fee Program
The updated CFF and corresponding fee schedule will need to be adopted by City Council
Resolution (Attachment B) as enabled by the City’s Fee Ordinance (Attachment A). What this
means is that the existing Ordinance allows the City Council to adopt, by Resolution, a fee
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schedule consistent with supporting technical analysis and findings provided in the CFF Study.
The Resolution approach to setting the fee allows periodic adjustments of the fee amount that
may be necessary over time, without amending the enabling Ordinance. The existing Ordinance
will also need to be amended to address the primary implementation and administrative issues
and procedures associated with the CFF. In Section 8: Implementation and Administration of
CFF, of the CFF Study provided in Attachment C, there is a summary of the key
implementation and administrative elements.
Water and Wastewater Capacity and Connection Fee/Development Impact Fee Program
The Water and Wastewater Capacity and Connection Fee Study (Fee Study) commenced
separately from the CFF Study. The City contracted for these services with HDR Engineering,
Inc. A study session was conducted on February 7, 2017 during which time the Council directed
Utilities Department staff to explore various options for the Capacity and Connection Fee Study.
At the October 17, 2017 Council meeting, the Utilities Department presented four fee options
and recommended the fees found in Option 2 (water) and Option 4 (wastewater). These options
used a methodology that equitably distributed capacity-related investments between new
development and existing water and wastewater ratepayers.
The fees recommended on October 17, 2017 included a prioritized list of capital projects from
water and wastewater master plans prepared following the update of the General Plan Land Use
Element in 2014. The project costs in the Fee Study were equitably distributed between existing
customers through rates (84% of project costs) and new development through the recommended
fees (16% of project costs).
It is important to note the October 17, 2017 recommended fees included only the highest priority
water and wastewater projects necessary to provide the required capacity for the General Plan
that, apart from water source of supply and the WRRF project, could be feasibly delivered over
the next ten years. This differs from the methodology applied citywide to calculate maximum
fees.
At the October 17, 2017 meeting, Council took no action on the fees, but provided feedback.
Council supported staff’s recommendation to eliminate the wastewater catchment area fees in
favor of the citywide wastewater fee and the tiering of residential fees where reduced fees were
available for smaller residential units. Council directed staff to return with its recommended fees
with the City’s CFF Study so that the feasibility of the City’s entire fee program could be
considered comprehensively.
Citywide Fee Fee Per EDU
Existing Water Fee $11,322
Water Option 1 $11,872
Water Option 2* $15,780*
Existing Citywide Wastewater Fee $3,830
Wastewater Option 1 / Option 3 $8,165 / $10,721
Wastewater Option 2 / Option 4* $9,522 / $12,602*
NOTE:
* October 17, 2017 Staff recommendation.
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Capacity and Connection Fees Incorporated into Overall Fee Burden “Prototypes”
Subsequently, the October 17, 2017 and January 9, 2018 study sessions focused on the Capital
Facilities Fee Study, EPS, Inc. (CFF Study consultant team) incorporated the Utilities
Department staff-recommended Options 2 (water) and 4 (wastewater) into its overall fee burden
prototypes.
When included with other proposed fees from the CFF Study, the total fee burden exceeded
thresholds identified by EPS for various residential and non-residential prototypes. Council
provided direction to Community Development staff to look for ways to reduce the total fee
burden.
To assist with balancing the various fee requirements throughout the City, the alternatives
presented in the Utilities Department October 17, 2017 staff report (Alternative 1 – Water and
Alternative 3 – Wastewater) were applied to the prototypes. These alternatives, which, apart
from the elimination of the wastewater catchment areas and the expanded tiered Equivalent
Dwelling Unit (EDU) pricing, are similar in methodology to the fees the City has currently and
are now being recommended. Selection of these options helps bring the total fee burden in line
with the identified thresholds for new development.
Because of this change, the following is eliminated from the water fee program:
• Buy-in to the capacity available from existing water distribution, storage, and
treatment infrastructure.
• Contribution toward capital projects identified in the Potable Water Distribution
System Operations Master Plan that are not debt financed.
• Contribution toward expansion of recycled water infrastructure described in
the Recycled Water Master Plan.
• Contribution toward expansion of the City’s groundwater program.
With the reduction in the water fee program under Alternative 1 (summarized in Table 2),
funding for capital projects would be from water rates. Due to the timing of necessary
improvements, offsite improvements may be required in some locations for development to
proceed due to existing conditions.
Because of this change, the following is eliminated from the wastewater fee program:
• Buy-in to the capacity available from existing wastewater collection system
and water resource recovery infrastructure.
• Contribution toward prioritized capital projects identified in the Wastewater
Collection System Infrastructure Renewal Strategy providing capacity to serve
future development that are not debt financed.
• Contribution toward water resource recovery capital projects that are not debt
financed.
With the reduction in the wastewater fee program under Alternative 3, summarized in the table
below, funding for capital projects would be from wastewater rates. Due to the timing of
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necessary capacity improvements, offsite improvements may be required in some locations for
development to proceed due to existing capacity constraints.
Current (2017-18)
Development Impact Fees October 2017 Staff Recommendation April 2018 Staff Recommendation***
Fee
Program Per EDU Fee
Program
∆ from Current
Fee Program Per EDU Fee
Program
∆ from Current
Fee Program Per EDU
Water $65.9
million $11,322 $91.8
million +$26 million $15,780 $69.1
million +$3.2 million $11,872
Wastewater $35.1
million* $3,820** $73.3
million +$38.2 million $12,602 $62.4
million +$27.3 million $10,721
NOTES:
* Includes $12.8 million of catchment area improvements.
** Additional catchment area fees, where applicable.
*** Staff recommendation for April 2018 includes Alternative 1 (Water) and Alternative 3 (Wastewater) from October 17, 2017 Council Agenda
Report, provided as Attachment H.
Changing from the October 17, 2017 staff recommendation to the alternatives (Alternative 1 for
Water and Alternative 3 for Wastewater) impacts the City’s water and wastewater ratepayers.
Water Alternative 1 shifts $22.7 million to the water ratepayer, increasing the ratepayer burden
from approximately 84 percent of capacity related costs to 88 percent of these costs. Wastewater
Alternative 3 shift $10.9 million to the wastewater ratepayer from approximately 84 percent of
capacity related costs to 86 percent of these costs.
Impact on Water and Wastewater Ratepayer
October 2017 Staff Recommendation April 2018 Staff Recommendation*
WATER:
New Development $ 91,800,000 16% $ 69,100,000 12%
Water Ratepayer $ 481,950,000 84% $ 504,650,000 88%
TOTAL: $ 573,750,000 100% $ 573,750,000 100%
WASTEWATER:
New Development $ 73,300,000 16% $ 62,400,000 14%
Wastewater Ratepayer $ 389,406,250 84% $ 395,725,000 86%
TOTAL: $ 458,125,000 100% $ 458,125,000 100%
NOTE:
* Staff recommendation for April 2018 includes Alternative 1 (Water) and Alternative 3 (Wastewater) from October 17, 2017 Council Agenda
Report, provided as Attachment H.
Recommended Water and Wastewater Development Impact Fees
Both the water and wastewater development impact fee programs establish citywide fees,
eliminating the current wastewater catchment area fees applicable in areas served by wastewater
lift stations. The fee programs will continue to be referred to as “development impact fees” as the
recommended fees are not at the level that included the buy-in component to system capacity.
The residential “tiers” are proposed to align water consumption and wastewater generation with
residential unit size. Non-residential fees continue to be assessed by meter size equivalency.
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Recommended Water and Wastewater Development Impact Fees
Residential (by Unit Size)
EDU
Water
Development
Impact Fee
Wastewater
Development
Impact Fee
Residential Unit (1,201+ square feet) 1.0 $11,872 $10,721
Residential Unit (801 to 1,200 square feet) 0.8 $9,497.60 $8,577
Residential Unit (451 to 800 square feet) 0.7 $8,310.40 $7,505
Mobile Home 0.6 $7,123.20 $6,433
Studio Unit (450 square feet or less) 0.3 $3,561.60 $3,216
Non-Residential (by Meter Size)
¾” 1.0 $11,872 $10,721
1” 1.7 $20,182 $18,226
1.5” 3.4 $40,365 $36,451
2” 5.4 $64,109 $57,893
3” 10.7 $127,030 $114,715
4” 16.7 $198,262 $179,041
6” 33.4 $396,525 $358,081
Impact Fee Program Feasibility Considerations
City staff and the consultant team, with the assistance of the development community, created
general development prototypes for evaluation that represent current development projects in the
City. Those prototypes represent the following types of development:
• Single family residential units (large lot to small lot)
• Multi-family residential units
• Office/Service
• Industrial
• Retail
The CFF Study consultant team conducted market research and interviewed developers in San
Luis Obispo to obtain project-specific information to estimate appropriate values. Provided
below is a summary of the analysis methodology, the specific case studies that were evaluated,
and the estimated total fee burden thresholds that were evaluated.
The feasibility analysis charts, provided in Attachment E, illustrate existing fee levels compared
with the revised fee levels for a series of development prototypes against the back-drop of
industry standard infrastructure burden feasibility norms.
Throughout the charts, there are some areas where the consultant team made certain assumptions
and used some judgement about which fees to show and/or the best way to illustrate the cost of a
fee that is otherwise not straight-forward to calculate. Notes are included throughout to explain
any assumptions that were used. In addition, because affordable housing fees, public art-in-lieu
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fees and school district fees are not part of this update, they are shown in aggregate, though the
detail of each fee is shown on the data table that accompanies each feasibility chart.
In all cases, the development impact fees reflected on the charts are based on the staff
recommended fee level.
Benchmark Cities Analysis
Under the recommended fee program, the City’s Transportation Impact fee rates will be on the
lower end of spectrum as compared to comparable agencies, and one of the lowest rates
particularly for high traffic generating land uses. For example, the chart below depicts the
proposed transportation impact fee rates for Retail & Office land uses among these various
agencies. The order of magnitude in comparison is similar for other land use rates as well such as
residential and industrial.
CONCURRENCES
The proposed update to the City’s development impact fee programs combined sound technical
analysis with a collaborative, iterative, and informed decision-making process. The technical
analysis was grounded in legally defensible nexus. The recommendations are supported by the
Public Works, Utilities, Police, Fire and Park and Recreation Departments.
ENVIRONMENTAL REVIEW
The adoption of the proposed Ordinance and Resolutions is (1) not a Project under the
California Environmental Quality Act (”CEQA”) and is therefore exempt pursuant to CEQA
Guidelines section 15378(b)(4): (2) statutorily exempt pursuant to CEQA Guidelines section
15273(a)(4) (Rates, Tolls, Fares and Charges for obtaining funds for capital projects necessary to
maintain service within existing service area); (3) not intended to apply to specific capital
improvement projects and as such it is speculative to evaluate such projects now and any
specifically identified transportation projects were already evaluated under CEQA and imposed
as mitigation measures in previously certified EIRs and /or adopted mitigated negative
declarations; and/or (4) not intended to, nor does it , provide CEQA clearance for future
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development-related projects by mere payment of the fees. Each of the foregoing provides a
separate and independent basis for CEQA compliance and when viewed collectively provides an
overall basis for CEQA compliance.
FISCAL IMPACT
The City of San Luis Obispo’s Economic Development Strategic Plan identifies the cost of
infrastructure as one of the major barriers to the creation of head of household jobs. The attached
Nexus Study is an important tool for understanding these costs, and how to ensure that they are
allocated in a way that is consistent with City policy. By identifying who benefits from a given
infrastructure project, costs can be assigned to new development (through a development impact
fee), or to existing development (e.g. through contributions made by the General Fund or through
water and sewer rate increases).
The General Plan includes an important policy regarding the cost of growth:
1.13.9. Costs of Growth
The City shall require the costs of public facilities and services needed for new development
be borne by the new development, unless the community chooses to help pay the costs for a
certain development to obtain community-wide benefits. The City shall consider a range of
options for financing measures so that new development pays its fair share of costs of new
services and facilities which are required to serve the project, and which are reasonably
related to the new growth attributable to the development.
The CFF Study is a tool to help the City establish an effective AB 1600 (Mitigation Fee Act)
Program to offset the cost of infrastructure needed to support build-out of the General Plan. The
facilities and infrastructure projects identified in the CFF Study have been determined to be
necessary to support the community’s plan. The projects come from the General Plan Land Use
and Circulation Elements, the Bicycle Transportation Plan, various specific plans, the Draft
Facilities Master Plan, the Fire Master Plan and other forward-looking planning documents.
In total, the projects included in the CFF Study will cost $360 million to deliver (excluding cost
associated with parkland acquisition and improvements projects that will be identified in the
update of the Parks and Recreation Element/Master Plan). Of this total, $209 million is identified
as the maximum amount that could be recovered through impact fees, consistent with the
requirements of AB 1600. The gap between the full cost recovery and the recommended number
will require funding from other sources and is not currently included in long-range forecast
projections. However, the City Council has previously determined that the maximum fees should
not be charged to ensure that new development (smaller, more affordable housing units in
particular) remains feasible. In other words, the City Council is choosing to help pay the costs to
help obtain community-wide benefits.
Based on the Council’s direction, the proposed fee program includes policy reductions to the
maximum fees that could be charged in the areas of General Government (no fee being charged),
Transportation (reductions for smaller units), Water and Wastewater (reduced scope of impact
fee program), Public Safety (reduced fee), and Parks (no fee charged for commercial). With
these policy reductions implemented, the total amount expected to be recovered through the
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City’s development impact fee program is $146 million, which includes the administrative fee.
Securing Supplemental Funding
The CFF Program is not appropriate for funding the full amount of all capital costs identified in
the CFF Study. The difference between the $360 million total project cost and the $146 million
in expected fee revenue is $214 million. As a result, the City will have to identify funding and
pay for improvements related to existing developments and improvements not funded by the
CFF Program or any other established funding source. Examples of such sources include the
following:
1. General Fund Revenues - The city could allocate a portion of its General Fund revenues
for discretionary expenditures. Currently existing General Fund contributions to capital
projects are supported primarily by Measure G revenues. These revenues have been
primarily allocated toward maintaining existing infrastructure and forecasts show that
sacrifices would need to be made to our existing maintenance programs to fund project
enhancements or new projects. Council could direct some of these funds toward CFF
Program projects. This could reduce the amount available for maintaining existing
infrastructure. In addition, Council could allocate other General Funds currently utilized
on other service priorities toward CFF Program projects.
2. Assessments and Special Taxes – The City could fund a portion of capital facilities
costs using assessments and special taxes. For example, the establishment of a Mello-
Roos Community Facilities District would allow the City to levy a special tax to pay debt
service on bonds sold to fund construction of capital facilities or to directly fund capital
facilities. The City could also seek voter approval of a special tax through ballot initiative
to provide funding for a range of capital improvements. There will be more detailed
discussion of funding alternatives at the April 17, 2018 Council meeting regarding
Funding the Future of SLO.
3. Regional, State or Federal Funds – The City might seek and obtain grant of matching
funds from Regional, state and Federal sources to help offset the costs of required capital
facilities and improvements. As part of its funding effort, the City should continue to
research and monitor these outside revenue sources and apply for funds as appropriate.
4. Other Grants and Contributions – A variety of grants or contributions from private
donors could help fund several capital facilities. For example, private foundations and/or
charity organizations may provide money for certain park and recreation or cultural
facilities.
As part of the adoption of the CFF Program, the City will need to adopt a finding that it will
obtain and allocate funding from various other sources for the fair share of the cost s of
improvements identified in the CFF Study that are not funded by the CFF Program as well as any
additional funding required to “backfill” any policy-based fee reductions. If additional funding
does not materialize, then substantial revisions will need to be made to the program or General
Plan policy changes will need to be made to change planned levels of services. Any
supplemental funding identified will be incorporated into the CFF Program as part of the next
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five-year update.
ALTERNATIVES
The following alternatives are available to the Council should you choose to not adopt the
reduced fees as recommended by staff:
1. Adopt a Capital Facilities Fee Program Update that charges the maximum fees. This
alternative is not recommended because it could create total fee burden feasibility issues
for new development, particularly small-lot, single-family development and multi-family
development.
2. Adopt a Water and Wastewater Development Fee Program that charges fees in
accordance with staff’s October 17, 2017 recommendation (Water Option #2 and
Wastewater Option #4). Those options ensure that existing ratepayers and new
development equitably apportion costs related to existing and future capital expenditures.
However, this alternative is not recommended because it could create total fee burden
feasibility issues for new development, particularly small lot single family development.
3. Do not adopt and implement the Capital Facilities Fee Program Update and continue to
charge the existing development impact fees that are currently in place for Transportation
and Parkland. However, this alternative is not recommended because the current fee
program does not include the infrastructure projects needed to support new development
through the buildout of the General Plan.
Attachments:
a - CFFP Ordinance
b - CFFP Resolution
c - Capital Facilities Development Impact Fee Nexus Study
d - 2018 Resolution Water and Wastewater
e - Feasibility Charts
f - Council Reading File - Council Agenda Report - Study Session #1
g - Council Reading File - Council Agenda Report - Study Session #2
h - Council Reading File - Council Agenda Report Water and Wastewater 10_17_17
i - Capacity Fee and Connection Fees Study Draft Final
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O ______
ORDINANCE NO. _____ (2018 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING THE MUNICIPAL CODE TO
ESTABLISH CAPITAL FACILITIES FEE PROGRAM AND MAKE
RELATED AND CONFORMING AMENDMENTS TO CHAPTER 4.56
(ORDINANCE NO. 1256 (1994 SERIES)) TO INCLUDE THE CAPITAL
FACILITIES FEE PROGRAM, AND ADOPTING CEQA EXEMPTION
FINDINGS
WHEREAS, existing local, state and federal resources are insufficient to meet the City of
San Luis Obispo’s capital improvements infrastructure and facility needs for transportation, parks
and recreation, general government, and public safety; and
WHEREAS, new development generally increases the demand for capital infrastructure
improvements and facilities and affect the quality of the community’s infrastructure; and
WHEREAS, the public interest, convenience, health, safety and/or welfare require that
fire, parks and recreation, police, and transportation infrastructure be provided for the maintenance
and enhancement of the quality of life of the City’s residents; and
WHEREAS, the City of San Luis Obispo has a critical need to ensure that impacts from
new development to transportation, fire, parks and recreation, police, and general government
(hereinafter defined as “capital improvements”) are addressed, and development impact fees are a
commonly-used mechanism to address this need; and
WHEREAS, Article XI, Section 5 of the California Constitution provides that the City, as
a home rule charter city, has the power to make and enforce all ordinances and regulations in
respect to municipal affairs, and Article XI, Section 7, empowers the City to enact measures that
protect the health, safety, and/or welfare of its residents; and
WHEREAS, Section 203 of the San Luis Obispo City Charter provides that the City has
the right and power to make and enforce all laws and regulations in respect to municipal affairs ;
and
WHEREAS, the Mitigation Fee Act (AB 1600), codified in California Government Code
Sections 66000-66025, establishes the legal requirements for a jurisdiction to implement a
development impact fee program in conformance with constitutional standards; and
WHEREAS, many cities and counties have adopted and imposed capital improvement
impact fees on new development to ensure that impacts from new development are addressed; and
WHEREAS, on August 16, 2016, the City Council initiated proceedings to adopt impact
fees by directing staff to prepare a nexus study for development impact fees for transportation,
park and recreation, public safety, and general government capital improvements and identified
and appropriated funding for this purpose; and
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WHEREAS, policies supporting development impact fees for capital improvements are
included in the recently adopted specific plans and related General Plan amendments, for Avila
Ranch, San Luis Ranch, Orcutt Area, Margarita Area, and the Airport Area, as well as the 2014
Land Use and Circulation Element (LUCE) of the City’s General Plan, the 2015 Housing Element,
and the 2013 Economic Development Strategic Plan; and
WHEREAS, on April 21, 2017, the Community Development Director, on behalf of the
City Manager, further initiated proceedings by to entering into a professional services contract
with Economic Planning Solutions, Inc. (EPS) to conduct a citywide impact fee nexus study and
implementation strategy; and
WHEREAS, EPS has prepared a Nexus Study entitled “Capital Facilities Development
Impact Fee Nexus Study,” for the City of San Luis Obispo, dated March 20, 2018, a copy of which
was previously provided to the City Council and made available to the public; and
WHEREAS, the Nexus Study has documented and confirmed that development in San
Luis Obispo will result in further growth, and that such growth will place additional burdens on
capital improvements infrastructure for transportation, parks and recreation, public safety, and
general government in the City; and
WHEREAS, the Nexus Study further identified the locations and types of development
that will generate those impacts, and thus established the reasonable relationship between the
location and type of development projects paying the fees and the need for capital improv ement
infrastructure for transportation, parks and recreation, public safety, and general government
generated by such development; and
WHEREAS, the Nexus Study provided data outlining the various capital improvement
infrastructure that are required to meet the need generated by new development projects in the
City; and
WHEREAS, it is the City’s policy that new development should contribute its fair share
to capital improvement infrastructure for transportation, parks and recreation, public safety, and
general government through the imposition of impact fees which will be used to finance, defray,
or reimburse the City for the appropriate portion of the cost of capital infrastructure improvements
which serve such development; and
WHEREAS, the Nexus Study established factors that reasonably estimate the level of
impacts on capital improvement infrastructure for transportation, parks and recreation, public
safety, and general government from new development based on the type of development project,
and thus determined that there is a reasonable relationship between the type of development project
paying the fees and the need for capital improvement infrastructure for transportation parks and
recreation, public safety, and general government; and
WHEREAS, the Nexus Study established eligible uses of revenues from capital
improvement infrastructure for transportation, parks and recreation, public safety, and general
government, based on the types of impacts from development projects, and thus determined that
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there is a reasonable relationship between the type of development project paying the fees and the
use of the fee revenues; and
WHEREAS, the Nexus Study applied factors that reasonably estimate the level of
impacts on capital improvement infrastructure for transportation, parks and recreation, public
safety, and general government per unit of development and that vary by the type of development
project, to calculate the fee on a development project, and thus determined that there is a reasonable
relationship between the amount of the fee and the cost of the capital improvement infrastructure
for transportation, parks and recreation, public safety, and general government fees attributable to
the development project on which the fee is imposed; and
WHEREAS, through the payment of the fee, developers of residential and non-residential
projects will address a portion of the impact of their developments on capital improvement
infrastructure for transportation, parks and recreation, public safety, and general government; and
WHEREAS, impact fees are necessary to maintain an adequate level of capital
improvement infrastructure for transportation, parks and recreation, public safety, and general
government; and
WHEREAS, the proposed impact fees adopted under this Ordinance are lower than the
maximum legal fees documented in the Nexus Study; and
WHEREAS, EPS also studied the economic feasibility of new development in San Luis
Obispo to provide a basis for creating an impact fee program that can be implemented without
adversely affecting San Luis Obispo’s ability to attract new development; and
WHEREAS, the proposed impact fees for capital improvement infrastructure for
transportation, parks and recreation, public safety, and general government balances the need for
such improvements with the goal of not impeding the construction of new development; and
WHEREAS, the City will obtain and allocate funding from various other sources for the
fair share of the costs of improvements identified in the Nexus Study that are not funded by the
impact fees as well as any additional funding required to supplement any policy-based fee
reductions; and
WHEREAS, the capital improvement infrastructure for transportation, parks and
recreation, public safety, and general government fee proposals were discussed in four Developer’s
Roundtable meetings (including June 29, 2017, October 5, 2017, December 11, 2017, and March
1, 2018) which consisted of City staff and a cross section of stakeholders with interest associated
with the impact fee program and such materials were also made available to the public; and
WHEREAS, the capital improvement infrastructure for transportation, parks and
recreation, public safety, and general government fee proposals were discussed at one duly noticed
meeting of the Planning Commission during a study session on October 11, 2017; and
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WHEREAS, the capital improvement infrastructure for transportation, parks and
recreation, public safety, and general government fee proposals were discussed at two duly noticed
meetings of the City Council during study sessions on October 17, 2017 and January 9, 2018; and
WHEREAS, following those study sessions the City Council directed city staff return with
revisions to the impact fees and accompanying legislation; and
WHEREAS, the impact fees were scheduled to be considered at regular, duly noticed
(including newspaper ads published on March 17, 2018 and March 24, 2018) meeting of the City
Council on April 3, 2018; and
WHEREAS, this Ordinance was considered, after a duly noticed public hearing, at a
regular meeting of the City Council on April 3, 2018.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows/or that (whatever action is needed):
SECTION 1. Recitals. The recitals contained in this Ordinance are true and correct and
are an integral part of the Council’s decision, and, are hereby adopted as findings.
SECTION 2. Environmental Determination. The City Council finds and determines the
adoption of this Ordinance is (1) not a Project under the California Environmental Quality A ct
“CEQA”) and is therefore exempt pursuant to CEQA Guidelines section 15378(b)(4); (2)
statutorily exempt pursuant to CEQA Guidelines section 15273(a)(4) (Rates, Tolls, Fares and
Charges for obtaining funds for capital projects necessary to maintain service within existing
service area); (3) not intended to apply to specific capital improvement projects and as such it is
speculative to evaluate such projects now and any specifically identified transportation projects
were already evaluated under CEQA and imposed as mitigation measures in previously certified
EIRs and /or adopted mitigated negative declarations; and/or (4) not intended to, nor does it,
provide CEQA clearance for future development-related projects by mere payment of the fees.
Each of the foregoing provides a separate and independent basis for CEQA compliance and when
viewed collectively provides an overall basis for CEQA compliance.
SECTION 3. This Ordinance shall be known as the “Capital Facilities Development
Impact Fees Ordinance.”
SECTION 4. Chapter 4.56 of the City of San Luis Obispo Municipal Code is hereby
repealed and replaced in its entirety with Exhibit A.
SECTION 5. Severability. If any subdivision, paragraph, sentence, clause, or phrase of
this Ordinance is, for any reason, held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the
remaining portions of this Ordinance, or any other provisions of the city' s rules and regulations.
It is the city' s express intent that each remaining portion would have been adopted irrespective of
the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
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SECTION 6. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The
Tribune, a newspaper published and circulated in this City. This Ordinance shall go into effect at
the expiration of thirty (30) days after its final passage.
INTRODUCED on the day of ____, 2018, AND FINALLY ADOPTED by the Council
of the City of San Luis Obispo on the ____ day of ____, 2018, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
Acting City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
______________________________
Teresa Purrington
Acting City Clerk
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EXHIBIT A
Chapter 4.56 - DEVELOPMENT IMPACT FEES
Sections:
4.56.010 - Purpose.
The council declares that the fees required to be paid by this chapter are established for the
purpose of protecting the public health, safety and general welfare, and implementing the policies
of the general plan, by providing adequate public facilities to support orderly development.
4.56.020 - Definitions.
Unless otherwise required by the context, the following definitions shall govern the
construction of this chapter:
"Commercial development" means the development or use of land for any retail, office,
service commercial or other business purpose.
"Council" means the city council of the city of San Luis Obispo.
"Development" or "development project" means any project undertaken for the purpose of
development, and includes a project involving the issuance of a permit for construction or
reconstruction, but not a permit to operate. Development or development project shall include: (i)
approvals of land divisions pursuant to Title 16 of this code, including approval of lot line
adjustments, certificates of compliance, parcel maps, tract maps and condominium conversions;
(ii) land use approvals pursuant to Title 17 of this code, including re-zonings or the approval of
development plans, site plans, minor use permits, variances, but excepting approval of San Luis
Obispo general plan/land use ordinance amendments; (iii) For the issuance of any occupancy
permit or final building inspection; and (iv) all other approvals of real property development,
which approvals are subject to the jurisdiction of the city of San Luis Obispo and which approvals
are subject to the exercise of the discretion of the city council, planning commission, or community
development director. For purposes of this chapter, new development includes any change of use
or occupancy which increases the traffic service requirements of a development.
"Dwelling unit" means a structure, or portion of a structure that is used for separate residential
occupancy by an individual, a family or group of unrelated individuals.
"Impact fee" means a monetary exaction charged to the applicant in connection with approval
of a development project for the purpose of defraying all or a part of the cost of the public facilities
related to the development project. This definition does not include fees specified in Government
Code Section 66477, or fees for processing applications for permits or approvals.
"Imposition of fees" occurs when they are imposed or levied on a specific development.
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"Multifamily residential development" means development or use of land for residential
purposes involving more than one dwelling unit in a single structure.
"Public facilities" means public improvements, public services or community amenities.
"Single-family residential" means development or use of land for residential purposes
involving no more than one dwelling unit in a single structure.
4.56.030 - Fees—Imposition and application.
This chapter establishes development impact fees which are imposed as a condition of
approval upon all development projects for which a building permit is issued on or after the
effective date of the ordinance codified in this chapter. Those impact fees are established for the
following public facilities:
A. General Government Impact Fee;
B. Fire Impact Fee
C. Parkland In-Lieu Fee;
D. Parks and Recreation Development Impact Fee;
E. Police Impact Fee; and
F. Transportation Impact Fee.
Water and wastewater impact fees shall be governed by Title 13. These impact fees are
established in order to pay for the capital costs of public facilities reasonably related to the needs
of new development in the city. At least once every five years, the council shall review the basis
for the impact fees to determine whether the fees are still reasonably related to the needs of new
development. In establishing these fees, the council has considered the effect of the fees with
respect to the city's housing needs as established in the housing element of the general plan.
4.56.040 - Fees to be set by resolution.
The amount of fee assessments shall be determined by resolution adopted by the city council.
Fees shall be adjusted annually by modifying the adopted value up or down in conformance with
the Engineering News Record Construction Cost Index. The factor for the adjustment of the fees
shall be calculated and established each January by the director of financial services, utilizing the
following formula:
Factor =
1 + Current Index - Base Index for Date of Adoption
Base Index for Date of Adoption
4.56.050 - Payment of fees.
Except as otherwise provided in Section 66007 of the Government Code, impact fees shall be
paid to the city at the time a building permit is issued. In cases where payment of all or part of the
required fee is deferred at the time of building permit issuance, the community development
director may require that the applicant, at the applicant's expense, execute a contract with the city
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to pay all deferred impact fees prior to final inspection and/or issuance of a certificate of occupancy
for the project. The contract shall specify the amount of the unpaid fee and a legal description of
the property affected. It shall be recorded in the office of the county recorder and shall constitute
a lien for the payment of the fees, which shall be enforceable against the successors in interest of
the property owner. When impact fees are paid in full, the city, at the expense of the applicant or
property owner, shall execute a release of any lien securing those impact fees.
4.56.060 - Protests.
Any party subject to the fees established by this chapter may protest the imposition of those
fees by meeting all of the following requirements:
A. Tendering any required payment in full or providing satisfactory evidence of
arrangements to pay the fee when due or ensure performance of the conditions necessary
to meet the requirements of the imposition of the fee.
B. Serving written notice of protest on the city council which notice shall contain all of the
following information:
1. A statement that the required payment is tendered, or will be tendered when due,
under protest;
2. A statement informing the city council of the factual elements of the dispute and the
legal theory forming the basis for the protest.
C. Serving the written notice of protest, no later than ninety (90) days after the date of the
imposition of the fees.
The city council shall consider that protest at a hearing to be held within sixty (60) days after
serving the written notice of protest. The decision of the city council shall be final.
4.56.070 - Exemptions.
The fees imposed under this chapter shall not apply to the following:
A. The United States or to any agency or instrumentality thereof, the state of California or
any county or other political subdivision of the state of California;
B. Remodeling or alteration of an existing residential building, but only if the number of
dwelling units is not increased or the use changed;
C. That portion of a structure that existed before the addition of dwelling units or the
enlargement of floor area in a nonresidential structure. If a structure is destroyed or
demolished and replaced within two years from the date of demolition, the impact fees
shall be based on the service requirements of the new development less the service
requirements of the development which it replaced.
4.56.080 - Credits and reimbursement.
If the applicant for approval of any development project is required by the city, as a condition
of approval to construct facilities, the cost of which has been used in the calculation of impact fees
which apply to that project, the applicant may receive a credit against those impact fees, up to the
amount charged for the same type of facility. If the cost of the improvements constructed by the
applicant exceeds the amount of the impact fees charged to the development project for the same
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type of facility, the excess cost may be reimbursed to the applicant from other impact fee revenues
within a reasonable time. To qualify for reimbursement, the applicant must enter into a
reimbursement agreement with the city, and any such agreement must specify the amount to be
reimbursed and the approximate schedule of the reimbursement.
4.56.090 - Disposition and use of fees.
The director of financial services shall establish a separate fund or account for each type of
facility listed in Section 4.56.030. All impact fees collected by the city shall be deposited in the
fund or account established for the specific type of facility for which the fee is collected. Any
interest earned on funds deposited in a fund or account shall be deposited in that fund or account.
Funds deposited in those accounts shall be used only to pay for design an d construction,
including construction administration, of projects identified in resolutions or other formal city
council action adopted pursuant to Section 4.56.030 as the basis for the impact fees, or for
reimbursements as provided in Section 4.56.080.
4.56.100 - Refunds.
If impact fees collected by the city have not been expended or designated for the intended
purpose within five years following their collection, the city shall either refund those fees as
provided in Section 66001 of the Government Code, or make findings as required by that section
to retain the fees. The refund provision of this chapter shall apply only to moneys in possession of
the city and need not be made with respect to any bonds, letters of credit or other items given to
secure payment at a future date.
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R ______
RESOLUTION NO. _____ (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING AND ESTABLISHING CAPITAL
FACILITIES FEE, ALSO REFERRED TO AS DEVELOPMENT IMPACT
FEES
WHEREAS, existing local, state and federal resources are insufficient to meet the City of
San Luis Obispo’s capital improvements infrastructure and facility needs for transportation, parks
and recreation, general government, and public safety; and
WHEREAS, new development generally increases the demand for capital infrastructure
improvements and facilities and affect the quality of the community’s infrastructure; and
WHEREAS, the public interest, convenience, health, safety and/or welfare require that
fire, parks and recreation, police, and transportation infrastructure be provided for the maintenance
and enhancement of the quality of life of the City’s residents; and
. WHEREAS, the City of San Luis Obispo has a critical need to ensure that impacts from
new development to transportation, fire, parks and recreation, police, and general government
(hereinafter defined as “capital improvements”) are addressed, and development impact fees are a
commonly-used mechanism to address this need; and
WHEREAS, Article XI, Section 5 of the California Constitution provides that the City, as
a home rule charter city, has the power to make and enforce all ordinances and regulations in
respect to municipal affairs, and Article XI, Section 7, empowers the City to enact measures that
protect the health, safety, and/or welfare of its residents; and
WHEREAS, Section 203 of the San Luis Obispo City Charter provides that the City has
the right and power to make and enforce all laws and regulations in respect to municipal affairs;
and
WHEREAS, the Mitigation Fee Act (AB 1600), codified in California Government Code
Sections 66000-66025, establishes the legal requirements for a jurisdiction to implement a
development impact fee program in conformance with constitutional standards; and
WHEREAS, many cities and counties have adopted and imposed capital improvement
impact fees on new development to ensure that impacts from new development are addressed; and
WHEREAS, policies supporting development impact fees for capital improvements are
included in the recently adopted specific plans and related General Plan amendments, for Avila
Ranch, San Luis Ranch, Orcutt Area, Margarita Area, and the Airport Area, as well as the 2014
Land Use and Circulation Element (LUCE) of the City’s General Plan, the 2015 Housing Element,
and the 2013 Economic Development Strategic Plan; and
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WHEREAS, the City Council introduced an Ordinance to establish a Capital Facilities Fee
Program that identified the impact fees that are necessary to maintain an adequate level of capital
improvement infrastructure for transportation, parks and recreation, public safety, and general
government at a duly noticed public hearing, at a regular meeting of the City Council on April 3,
2018; and
WHEREAS, the City Council adopted Ordinance #### amending Chapter 4.56 of the
Municipal Code to establish a Capital Facilities Fee Program that identified the impact fees that
are necessary to maintain an adequate level of capital improvement infrastructure for
transportation, parks and recreation, public safety, and general government at a duly noticed public
hearing, at a regular meeting of the City Council on April 17, 2018. The Capital Facilities Fee
Program, as codified in Chapter 4.56, states that the amount of each Capital Facilities Fee be
established by Resolution of the City Council; and
WHEREAS, an analysis of the required Capital Facilities Development Impact Fees to
support the City’s capital improvement infrastructure for transportation parks and recreation,
public safety, and general government was identified in the Capital Facilities Development Impact
Fee Nexus Study, and cost information for capital projects have been completed for the fees
identified as included in the attached Exhibits A and incorporated herein by this reference.
WHEREAS, by this Resolution, the City Council intends on establishing the amount of
such rates and charges.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Findings
a) The purpose of development impact fees is to protect the public health, safety, and
general welfare by providing adequate transportation, park and recreation, fire,
police, and general government facilities to satisfy the needs of new development
and to mitigate the impacts of new development on the City’s capital facilities and
improvements.
b) The development impact fees collected pursuant to this resolution shall be used
only to pay for facilities and improvements identified in the development impact
fee analysis and shall not be in lieu of any other fee or tax as may be required by
the Municipal Code.
c) There is a reasonable relationship between the types of development on which the
development impact fees are imposed and the use of the development impact fees
and the need for the facilities and improvements. All new development requires
adequate water supply, treatment and distribution as well as wastewater collection
and treatment facilities to protect the public health and safety.
d) As required by Government Code Section 66001 et seq., there is a reasonable
relationship between the amount of the development impact fee and the cost of the
facilities and improvements attributable to the developments on which the
development impact fees are imposed. The estimated costs of facilities and
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improvements, including financing costs, to be paid for as shown in the Capital
Facilities Development Impact Fee Nexus Study, for the City of San Luis Obispo,
dated March 20, 2018 2018, prepared by Economic Planning Systems, Inc. the
findings and analysis of which are hereby incorporated by reference, have been
allocated to new development.
SECTION 2. Cost Estimates. At any time that the actual or estimated costs of facilities
identified in the development impact fee analysis changes, the Finance Director shall review the
development impact fee and determine whether the change affects the amount of the development
impact fees. If the development impact fees are significantly affected, the Finance Director shall,
within thirty (30) days, recommend to the Council a revised fee for their consideration.
SECTION 3. Amount of Development Impact Fees. Effective July 1, 2018, development
impact fees for capital improvement infrastructure associated with transportation, parks and
recreation, public safety, and general government shall be in the amounts set forth in Exhibits A
and B attached hereto. Unless otherwise acted upon by the Council, the amount of the development
impact fees will automatically be adjusted on July 1 of each subsequent year by the Municipal
Cost Index for the prior year.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
Acting City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
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City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
Acting City Clerk
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EXHIBIT A
CAPITAL FACILITIES DEVELOPMENT IMPACT FEES
Effective July 1, 2018
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Public Review Draft Report
Capital Facilities Development
Impact Fee Nexus Study
Prepared for:
City of San Luis Obispo
Prepared by:
Economic & Planning Systems, Inc.
March 20, 2018
EPS #161187
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Table of Contents (continued)
1. INTRODUCTION AND OVERVIEW ................................................................................. 1
Background .............................................................................................................. 1
Legal Context ........................................................................................................... 2
Summary of Maximum Fees ....................................................................................... 3
CFF Implementation .................................................................................................. 6
Organization of Report ............................................................................................... 7
2. DEMOGRAPHIC AND LAND USE FORECASTS .................................................................... 8
Growth through 2035 ................................................................................................ 8
Development Capacity ............................................................................................. 11
Changes in Growth Forecasts/Development Capacity ................................................... 12
3. TRANSPORTATION IMPACT FEE ................................................................................ 14
Mitigation Fee Act Nexus Findings ............................................................................. 14
Background ............................................................................................................ 15
Geography of Transportation Fee Program ................................................................. 16
Land Use Categories and Growth Assumptions ............................................................ 17
Transportation Improvements and Cost Estimates ...................................................... 19
Fee Calculation ....................................................................................................... 21
4. PARKLAND IN-LIEU FEE AND PARKS AND RECREATION DEVELOPMENT IMPACT FEE ..................... 28
Service Standards and Cost Estimates ....................................................................... 28
Park In-Lieu Fee ..................................................................................................... 31
Mitigation Fee Act Nexus Findings ............................................................................. 32
Impact Fee Technical Analysis .................................................................................. 33
Combined Schedule of Park Fees .............................................................................. 37
5. GENERAL GOVERNMENT IMPACT FEE ......................................................................... 39
Mitigation Fee Act Nexus Findings ............................................................................. 39
Service Standards and Cost Assumptions ................................................................... 39
Cost Allocation and Fee Calculations .......................................................................... 40
6. POLICE IMPACT FEE ............................................................................................. 43
Mitigation Fee Act Nexus Findings ............................................................................. 43
Capital Improvements and Cost Estimates ................................................................. 43
Cost Allocation ........................................................................................................ 45
Fee Calculation ....................................................................................................... 46
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Table of Contents
7. FIRE IMPACT FEE ................................................................................................ 49
Mitigation Fee Act Nexus Findings ............................................................................. 49
Capital Improvements and Cost Estimates ................................................................. 50
Cost Allocation ........................................................................................................ 52
Fee Calculation ....................................................................................................... 53
8. IMPLEMENTATION AND ADMINISTRATION OF CFF ........................................................... 55
Fee Collection and Amount ....................................................................................... 55
Annual Review, Accounting, and Updates ................................................................... 56
Securing Supplemental Funding ................................................................................ 57
Appendices
APPENDIX A: Transportation Impact Fee Improvement List and Cost Allocation
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List of Tables (continued)
Table 1 Maximum CFF Program Fee Schedule .................................................................. 4
Table 2 Population, Jobs and Service Population ............................................................... 9
Table 3 Population and Employment Densities ................................................................ 11
Table 4 Development Capacity in City Transportation Model............................................. 12
Table 5 Land Use Category Descriptions ........................................................................ 13
Table 6 Land Use Category Definitions .......................................................................... 18
Table 7 Summary of Types of Transportation Improvements and Costs ............................. 19
Table 8 Summary of Cost Allocations ............................................................................ 20
Table 9 Citywide Growth Projections ............................................................................. 23
Table 10 Citywide Trip Generation .................................................................................. 24
Table 11 Average Cost per Trip ...................................................................................... 25
Table 12 Trip Generation Rates and Components of Maximum Fee Calculations.................... 26
Table 13 Summary of Maximum Citywide Transportation Fees ........................................... 27
Table 14 Current Parkland and Recreation Facilities Land .................................................. 29
Table 15 Effective Parks Standards ................................................................................. 30
Table 16 Maximum Park In-Lieu Fees ............................................................................. 32
Table 17 Parkland and Improvements Cost Multiplier ........................................................ 34
Table 18 Service Population Generation by Land Use ........................................................ 35
Table 19 Maximum Parks Development Impact Fees by Land Use ....................................... 36
Table 20 Parkland In-Lieu/Parks Development Impact Fee Combined Schedule .................... 38
Table 21 General Government Cost Estimates and New Growth Allocation ........................... 40
Table 22 General Government Facilities Fee Calculation .................................................... 41
Table 23 New Police Vehicle Cost Estimates ..................................................................... 44
Table 24 Police Headquarter Cost Estimate ...................................................................... 45
Table 25 Total Police Capital Costs ................................................................................. 45
Table 26 Police Capital Improvement Cost Allocations ....................................................... 46
Table 27 Police Services Facilities Fee Calculation ............................................................. 48
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List of Tables
Table 28 Fire Station Improvements and Estimated Costs ................................................. 50
Table 29 Fire Services Vehicles, Equipment, and Estimated Costs ....................................... 51
Table 30 Fire Improvement/Vehicle Replacement Costs .................................................... 52
Table 31 Fire Costs and Cost Allocation ........................................................................... 53
Table 32 Fire Services Facilities Fee Calculation ............................................................... 54
List of Figures
Figure 1 Map of Current Transportation Fee Subareas ...................................................... 15
Figure 2 Revised Geographic Areas of Updated Transportation Fee Program ........................ 16
Figure 3 Allocation to New Development ......................................................................... 21
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Economic & Planning Systems, Inc. 1 P:\161000s\161187SLO_CFF\Report\161187_Admin Draft_SLOCFF Nexus Study_2018_03_20.docx
1. INTRODUCTION AND OVERVIEW
This Capital Facilities Fee (CFF) nexus study (Study) provides the City of San Luis Obispo with
the necessary technical documentation to support the potential adoption of updated
transportation and parks impact fees and new general government, police, and fire impact fees.
Consistent with City policy, the fee programs will help ensure that new development contributes
its fair share to needed infrastructure and public facilities, helping to sustain the City’s quality of
life and economic vitality as growth occurs.
Background
This CFF study is a key implementation action of the 2014 Land Use and Circulation Element
General Plan Update and is guided by General Plan Policy 1.13.9, which requires that new
development pays its proportionate share of infrastructure costs. The Study also builds off the
City’s Economic Development Strategic Plan and four prior study sessions held with the City
Council to discuss policies and practices for infrastructure financing.
Over the last 30 years, the changing fiscal situation in California has steadily under-funded local
infrastructure. Accordingly, many cities have adopted a policy of “growth pays its own way,”
requiring new development to fund infrastructure expansion through the imposition of capital
facilities fees, also known as development impact fees. The adoption of a revised CFF program
and the careful investment of development impact fee revenues along with other local, State,
and federal sources of infrastructure and capital facilities funding will serve as an important
stimulus for economic development, providing certainty to developers about the rules and
financial obligations they will face while ensuring that adequate infrastructure will be available to
support growth and enhance competitiveness.
The City of San Luis Obispo currently has established transportation and parks programs with
fees that vary by geographic subarea of the City. While the current configuration of the existing
development impact fee programs has served an important role in funding infrastructure
improvements throughout the City over the last twenty years, changing economic circumstances
and infrastructure needs, new Specific Plans, and the City’s recently adopted public financing
policies warrant an update of these programs. The City also charges other impact fees and in-
lieu fees on a Citywide and/or Specific/Master Plan Area basis that are not evaluated in this
Study, but are relevant when development feasibility and other policy issues are considered in
establishing a recommended set of fees.1
This Study has been prepared by Economic & Planning Systems, Inc. (EPS) under the
management of the Community Development Department and based on significant input from
the Public Works, Parks and Recreation, Utilities, Police and Fire Departments, input from
stakeholders, and direction from City Council. The City Council will determine the preferred CFF
1 For example, water, wastewater, affordable housing, and public art fees. New development is also
subject to school district capital facilities fees. The water and wastewater development impact fees
are being updated through a separate study.
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levels, including fees potentially below their maximum, justifiable levels, based on a range of
policy considerations.
Legal Context
Consistent with General Plan policy, this Study provides the necessary technical analysis to
support a new schedule of development impact fees up to the calculated justifiable maximum to
be established by Impact Fee Ordinance and Resolution and an updated Parkland Dedication
Ordinance. Fees evaluated include an update to transportation and parks fees and new police,
fire, and general government fees. Collectively, these individual fee programs are referred to as
the Capital Facilities Fee Program.
The City currently has an impact fee ordinance that enables the collection of fees for capital
facilities, pursuant to the Mitigation Fee Act and Government Code Section 66000 et seq. The
Mitigation Fee Act sets forth the procedural requirements for establishing and collecting
development impact fees. These procedures require that "a reasonable relationship, or nexus,
must exist between a governmental exaction and the purpose of the condition." The updated
and new fees described in this Study are consistent with the requirements of the Mitigation Fee
Act (Government Code Section 66000 et seq.) and the most recent relevant case law. The
updated parkland in-lieu fees are consistent with the Quimby Act (Government Code Section
66477).
The key requirements of the Mitigation Fee Act that determine the structure, scope and amount
of the potential CFF Program are as follows:
Collected for Capital Facility and Infrastructure Improvements Only. Development
impact fee revenue can be collected and used to cover the cost of capital facilities and
infrastructure that are required to serve new development in the City. Impact fee revenue
cannot be used to cover the operation and maintenance costs of these or any other facilities
and infrastructure.
Used to Fund Facility Needs Created by New Development Rather than Existing
Deficiencies. Impact fee revenues can only be used to pay for new or expanded capital
facilities needed to accommodate growth. Impact fee revenue cannot be collected or used to
cover the cost of existing deficiencies in the City’s capital facilities or infrastructure. In other
words, the cost of capital projects or facilities that are designed to meet the needs of the
City’s existing population must be funded through other sources. The costs associated with
improvements that serve the needs of both new development and the existing population
and employment are split on a “fair share” basis according to the proportion attributable to
each. Thus, the CFF Program funding will need to be augmented by the City and other
revenue sources to meet overall funding requirements.
Fee Amount Must Be Based on A Rational Nexus. The amount of an impact fee must be
based on a reasonable nexus, or connection, between new development and the needs and
corresponding costs of the capital facilities and improvements need to accommodate it. As
such, an impact fee must be supported by specific findings that explain or demonstrate this
nexus or relationship. In addition, the impact fee amount must be structured such that the
revenue generated does not exceed the cost of providing the facility or improvement for
which the fee is imposed.
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Summary of Maximum Fees
Based on the capital facilities needed to serve future development in the City of San Luis Obispo,
the associated portion of costs that can be allocated to new development, and the proportionate
allocation between different land uses, Table 1 presents the maximum Capital Facilities Fees
that can charged to new development to fund transportation, parks, general government, police,
and fire improvements. The provisions of the Mitigation Fee Act allow jurisdictions to include the
costs of administering the impact fee program in the maximum fee. Administration requirements
include collecting and allocating impact fee revenue, record keeping and reporting of fund
activity, and periodic updates to the fee program. This analysis assumes that administrative
costs will equal 1.75 percent of the total fee program cost.2
The CFF revenues generated by the maximum fee schedule would cover new developments’
share of the infrastructure and improvement needs associated with new development and not
funded by direct developer contributions. The derivation of the maximum fees is provided in the
subsequent chapters, though a brief summary of the planned use of fee revenues is provided
below. As discussed in a subsequent section, to the extent fees are adopted at below their
maximum levels, the requirement for funding from other sources would increase.
Transportation Improvements. The updated transportation component of the CFF would
fund needed additions and improvements to roadways to accommodate future trip generation
projected as a result of new development. Improvements include new interchange
improvements, new intersections and signalizations, new roadways and roadway
improvements, new bicycle and pedestrian improvements, and multimodal facilities, among
others. Under the maximum fee schedule, about $135.9 million in 2018 dollars would be
generated for transportation improvement investments through buildout of the General Plan.
Parkland Acquisition and Parks and Recreation Facilities. The updated Citywide
parkland in-lieu fee and new parks and recreation development impact fees would be used to
acquire parkland consistent with the City’s parkland service standards and to improve new
and existing parks to meet the demand of future residential growth in the City. These
updated/ new park fees will not apply to all areas in the City, so the additional fee revenues
are dependent on the geographic location of new development. For example, all new
development under the MASP and OASP will continue to be subject to the existing,
established standards/ requirements of those Specific Plans. In addition, the Avila Ranch and
San Luis Ranch requirements are/ will be addressed in their respective Development
Agreements.
2 The administrative add-on to the maximum development impact fees varies among California
jurisdictions. Where included, the addition is typically between 1.0 and 3.0 percent. This CFF
Program applies a 1.75 percent factor, in the middle of the range, and below the City’s 2.65 percent
building and planning cost for services fee.
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General Government/City Administrative Facilities. The general government
component of the CFF would help fund the expansion and addition of administrative facilities.
Based on the forecasts of new development through 2035, fee revenues under the maximum
fee schedule would total $4.3 million in 2018 dollars.
Police Service Facilities and Equipment. The new police component of the CFF would help
fund construction of a new police headquarters facility and the purchase of police-related
equipment to serve new development in the City of San Luis Obispo. Based on the forecasts
of new development through 2035, fee revenues under the maximum fee schedule would
total $8.9 million in 2018 dollars.
Fire Service Facilities and Equipment. The new fire component of the CFF would help
fund construction of a new fire station which will benefit the system as a whole, as well as
the purchase of related fire protection vehicles and equipment to serve new development in
the City of San Luis Obispo. Based on the forecasts of new development through 2035, fee
revenues under the maximum fee schedule would total $3.5 million in 2018 dollars.
CFF Implementation
Fee Schedule Determination
This Study provides the City of San Luis Obispo with the necessary technical documentation to
support the adoption of updated transportation and parks impact fees and new general
government, police, and fire impact fees at the maximum levels shown. The City Council can
choose to adopt fees below these maximum levels. In cases where the maximum fee calculation
is informed by a capital improvement list – for example, transportation, police, and fire – the
adoption of fees below the maximum level requires the City to “backfill” with additional funding
from other sources. This is in addition to the funding required from other funding sources that
will be required to fund the portions of the capital improvement costs that cannot be allocated to
new development.
As discussed in the City Council Study Sessions, there are several economic and policy reasons
why a City might choose to adopt fees below the maximum level.3 One common reason relates
to concerns over development feasibility, where substantial increases in development impact
fees are expected to substantially reduce the feasibility of new development and/or create
substantial disincentives to the types of development that City policy is explicitly seeking to
encourage. The City’s current fee program includes such policy discounts – specifically a 50
percent discount in the retail and hotel transportation development impact fees.
As discussed in the City Council Study Sessions, it is the cumulative set of development fees that
is important to development feasibility (along with real estate market conditions and other
development costs), not just individual fee components. As a result, the collective fee burdens
were considered as part of the development feasibility analysis. This analysis, in addition to
3 When there is concern about fee levels, the first step is to consider the capital improvements lists
that drive the maximum fee levels, where applicable, and ensure all improvements are necessary.
Once the City staff determined that all improvements were required, policy-based discounts are
considered, recognizing the need to “backfill” funding.
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stakeholder input, identified potential feasibility concerns around small single family detached
homes and non-residential development, including, but not limited to, retail, industrial, and
service uses.4
Fee Adoption and Implementation
Once selected, the preferred CFF program and fee schedule will be adopted through Ordinance
and Resolution. The new Ordinance will address the primary implementation and administrative
issues and procedures associated with the CFF. Then actual fee levels will be set by Resolution.
The Resolution approach to setting the fee allows periodic adjustments of the fee amount that
may be necessary over time, without amending the enabling Ordinance. A list of the key
implementation and administrative elements as required by Mitigation Fee Act are addressed in
Chapter 8.
Organization of Report
The report is divided into eight chapters, the first of which is this Introduction and Overview.
Chapter 2 provides a summary of the demographic and land use forecasts. Chapters 3 through
7 describe the capital improvements, costs of those improvements and the cost allocation for
transportation, parks, general government, police, and fire facilities. These chapters also
provided the required nexus findings. Key implementation and administrative elements as
required by Mitigation Fee Act are addressed in Chapter 8.
4 Fee comparisons with peer/neighboring jurisdictions also provide insights into potential economic
development implications of new fee levels. A fee comparison was provided as part of the City Council
Study Sessions.
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2. DEMOGRAPHIC AND LAND USE FORECASTS
This Chapter describes the demographic and land use assumptions utilized in this Study that are
an important driver of the maximum development impact fee estimates. The estimates are used
for the following primary purposes in the fee calculations:
Estimates of existing population and employment levels are used to determine existing,
effective service standards for specific capital improvement categories.
Estimates of future population and employment growth in the City inform the determination
of the future need for specified capital facilities which can be appropriately funded by the fee.
Estimates related to population and employment density (e.g., persons per housing unit or
employees per square foot) are used to allocate costs between land uses.
This Chapter is divided into two main sections as the timeframe used for the transportation
impact fee calculations is different than the timeframe used for the general government, police,
fire, and parks and recreation fee calculations. As described in more detail below, the non-
transportation development impact fees focus on the period through 2035 and are tied to the
General Plan’s growth policies on housing unit/population growth and associated expectations
concerning the relationship between population and job growth. The transportation development
impact fees are tied to City’s transportation model which considers development capacity in the
City under the City’s General Plan. The development capacity provides more growth potential
than the 2035 forecasts and would be built out over a longer, but uncertain timeframe.
The use of different timeframes is reasonable as long as the capital improvements included in the
development impact fee calculations are specifically tied to the growth forecasts/capacities used.
In other words, the non-transportation development impact fees should only consider the capital
improvements required to serve new development through 2035, while the transportation
development impact fees should consider the transportation improvements required to serve new
development through the buildout of the City’s development capacity.
Growth through 2035
The development impact fee calculations for general government, police, fire, and parks and
recreation (as well as the park in-lieu fee) are all driven, in part, by: (1) estimates of current
population, jobs, and service population; (2) the forecast of future population, jobs, and service
population through 2035; and (3) assumed population and employment densities.5 Table 2
shows the 2017 (current) estimates, the forecasted 2035 estimates, and the associated new
growth. Table 3 indicates the population density (persons per housing unit) and employment
5 Service population is a weighted blend of population and jobs. In this case, it weights population at
1.0 and jobs at 0.5. As a metric of capital facilities demand, it effectively gives residents twice the
weight of workers.
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densities (jobs per 1,000 square feet). The estimates shown in Tables 2 and 3 are described
below along with their sources.
Table 2 Population, Jobs and Service Population
Housing Units
The 2017 City housing unit count is reported as 21,140 housing units by the California
Department of Finance. The City’s Land Use and Circulation Element of its General Plan (LUCE)
states that “the City shall manage the growth of the city’s housing supply so that it does not
exceed one percent per year on average”. This growth limit was articulated as starting in 2013
and allows for a total housing unit count of 25,762 units in 2035. As a result, there is a
forecasted growth of 4,622 housing units between 2017 and 2035 at an average annual rate of
1.1 percent. This represents an increase of 21.9 percent in housing units through 2035.
Population
The 2017 City population is reported as 46,724 persons by the California Department of Finance.
As noted above, the City’s Land Use and Circulation Element of its General Plan (LUCE) states
that “the City shall manage the growth of the city’s housing supply so that it does not exceed
one percent per year on average” and the LUCE provides the limits on the number of persons as
well as the number of housing units that limits population growth to one percent per year. This
growth limit was articulated as starting in 2013 and allows for a total population count of 56,686
residents in 2035. As a result, there is a forecasted growth of 9,962 residents between 2017
and 2035 at an average annual rate of 1.1 percent. This represents an increase of 21.3 percent
in population/residents through 2035.
Increase
Item 2017 2035 Growth over 2017
Housing Units 21,140 25,762 4,622 21.9%
Population 46,724 56,686 9,962 21.3%
Jobs 52,092 63,199 11,107 21.3%
Service Population (1) 72,770 88,286 15,516 21.3%
(1) Service population is a blended measure of population and jobs that assigns a lower weighting to jobs
due to the lower capital facilities demands of workers relative to residents. For the purposes of this
analysis, residents are given a 1.0 service population weighting and jobs/ workers a 0.5 weighting.
Sources: California Department of Finance; City of San Luis Obispo Land Use and Circulation Element (LUCE);
LUCE Fiscal Impact Analysis and Public Financing Plan; U.S. Census Bureau American Community Survey;
City of San Luis Obispo Community Development Department; Economic & Planning Systems, Inc.
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Jobs
There is more uncertainty over the level of job growth between 2017 and 2035. The LUCE Fiscal
Impact Analysis and Public Facilities Financing Plan indicated a potential increase of 13,967 jobs
between 2014 and 2035, while SLOCOG provided a range of forecasts indicating a range of
additional jobs from 3,733 to 9,548 between 2015 and 2035. City Community Development staff
indicated that in recent years, job growth has outpaced population growth, while the LUCE
indicates that “the Council shall consider establishing limits for the rate of non-residential
development if the increase in non-residential floor area for any given five-year period exceeds
five percent”. Based on recent trends and City policy, it was assumed that the pace of job
growth would be the same as the rate of population growth (1.1 percent) between 2017 and
2035. The 2017 job count of 52,092 was based on a modest increase over the SLOCOG job
estimate for 2015. The 2035 job count was then estimated at 63,199, representing a growth of
11,107 between 2017 and 2035. This represents an increase of 21.3 percent in jobs through
2035.
Service Population
The service population represents a combined weighting of population and jobs. This measure
allows for allocations of demand for capital facilities across residential and non-residential land
uses. A common basic approach used in development impact fees in California is to give new
employment/jobs half the weight of a new resident. In other words, it is assumed that residents,
because they are in the City for larger portions of their days, will generate twice the demand for
capital facilities (police, fire, parks, city administration) than workers. As a result, service
population is calculated by giving residents a weighting of 1.0 and workers a weighting of 0.5.
As shown in Table 2, the 2017 service population estimate is 72,770 and the 2035 service
population is 88,286. This represents an increase of 15,516 in service population or 21.3
percent.
Population Density
When the LUCE-allowed population and housing unit growth are considered in conjunction with
the City’s current housing occupancy rate of 92.5 percent6 and the ratio between single family
and multifamily population density in the City7, the resulting persons per housing unit estimates
are 2.51 persons per single family unit and 1.81 persons per multifamily unit (see Table 3).
Employment Density
The gross building square feet of workspace required on average to accommodate jobs in
different land use categories was identified in the LUCE Fiscal Impact Analysis and the Public
Financing Plan. These estimates are generally consistent with employment densities used in
other studies and are reflected in Table 3. As shown, the average square feet required per job
ranges from 300 square feet on average for office development to 750 square feet on average
for industrial development. Stated in another way, office developments are assumed to have the
highest employment density with about 3.3 jobs per 1,000 square feet relative to 1.33 jobs per
6 California Department of Finance
7 US Census American Community Survey
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1,000 square feet of industrial development. The LUCE analysis did not provide specific
employment densities for service and institutional land uses, which are assumed to be consistent
with the employment density for retail development for the purposes of this analysis.
Table 3 Population and Employment Densities
Development Capacity
The development impact fee calculations for transportation facilities are driven by a different set
of future development forecasts that are tied to the City’s development capacity. The
development capacity encompasses a larger amount of overall development as it is not
constrained to the 2035 time horizon, but considers the overall amount of development that
could occur through buildout of the existing development capacity under the current General
Plan.8 Development capacity was used for the transportation impact fee for consistency
purposes, as this is the growth forecast incorporated into the City’s transportation model which is
a key determinant of other components of the transportation impact fee calculation.
8 City staff has made adjustments to the development capacity estimates to include major
development projects in the pipeline such as Avila Ranch, Froom Ranch, and San Luis Ranch.
Item
Residential (1)
Single Family Units 2.51 persons per housing unit
Multifamily Units 1.81 persons per housing unit
Non-Residential (2)
Office 300 gross building square feet/ employee
Retail 550 gross building square feet/ employee
Industrial 750 gross building square feet/ employee
Institutional 550 gross building square feet/ employee
Service 550 gross building square feet/ employee
Lodging 1.0 lodging rooms/ employee
(1) Derived from LUCE, California Department of Finance, and U.S. Bureau data.
(2) From the LUCE Fiscal Impact Analysis and Public Financing Plan, except for
Institutional and Service uses which assume the same employment density as Retail.
Sources: California Department of Finance; City of San Luis Obispo LUCE; LUCE Fiscal Impact Analysis;
U.S. Census Bureau American Community Survey; City of San Luis Obispo Community Development
Department; Economic & Planning Systems, Inc.
Density
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City Public Works/Transportation staff provided the existing development, the capacity buildout
development, and associated level of future development capacity included in the City’s
transportation model (see Table 4).
Table 4 Development Capacity in City Transportation Model
As shown in Table 4, there is substantial capacity for new single family, multifamily, office,
services, and retail development. Industrial and institutional development capacity is more
modest. There is also capacity for a number of new hotels, including in the Downtown area and
elsewhere. As expected, development capacity is higher than the forecasted development
through 2035 (see Table 2). For example, there is a total development capacity of 6,136 new
housing units compared to an estimated potential growth of 4,622 units through 2035.
Table 5 provides the definitions of the different land uses associated with the City’s development
capacity estimates. These are the same definitions applied to the other development impact
fees, except where specifically noted.
Changes in Growth Forecasts/Development Capacity
Over time, it may become apparent that the growth forecasts through 2035 and the
development capacity estimates require refinement. Business and real estate market cycles,
growth management policies, and changes in land use designations could all affect the
expected/potential level of growth and development. Consistent with other development impact
fee programs, these changes are captured in the periodic updates to Capital Facilities Fee
Programs that support a re-calibration of fee program assumptions as conditions change over
time.
Land Use Existing Growth Buildout % Growth
Residential (Dwelling Units)
Single Family 8,289 3,102 11,391 37%
Multifamily 12,084 3,034 15,118 25%
Total Residential Units 20,373 6,136 26,509 30%
Non-Residential (Sq.Ft.)
Office/Service 2,487,603 3,911,560 6,399,163 157%
Retail 5,290,842 1,043,493 6,334,335 20%
Industrial 2,987,985 115,185 3,103,170 4%
Institutional 340,771 44,439 385,210 13%
Total Non-Residential Sq.Ft.11,107,201 5,114,677 16,221,878 46%
Lodging (Rooms)2,183 651 2,834 30%
Sources: City of San Luis Obispo; Economic & Planning Systems, Inc.
are greater than the General Plan growth forecasts that focus on potential growth through 2035.
(1) Transportation model growth forecasts based on development capacity. As a result, growth forecasts
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Table 5 Land Use Category Descriptions
Land Use Category Description and Examples [1]
Single Family Single family detached dwelling units, single family attached dwelling units
including Townhome-style units. A single Accessory Dwelling Unit (ADU) is
allowed as part of the construction of a single family home and is not
charged separate impact fees.
Multifamily Multifamily attached dwelling units and mobile homes.
Office Uses include professional services, financial institutions, administration-type
uses, including administration of private-sector utilities, and certain types of
services, such as tax return preparation, advertising agencies, photography
studios, pest control, building maintenance, employment agencies, security
and computer-related services.
Services Uses include offices and clinics of medical and health practitioners, religious
organizations, membership organizations, certain transportation uses,
beauty/barber shops, funeral services, and repair shops.
Retail Uses include regional- and neighborhood-serving retail establishments,
including retail as part of mixed-use developments. Specific uses include
restaurants, gas stations and auto care, movie theaters, fitness facilities,
warehouse stores, department stores, grocery stores, and amusement and
recreation services.
Industrial Uses include construction, manufacturing, and transportation uses, as well
as warehousing and storage. Ancillary office space included as part of
industrial development is included.
Institutional Uses include City, County, and State offices and facilities, health care
facilities such as Mental Health and Public Health services, Social services
such as County Social Services, CA Employment Development and
Rehabilitation, Homeless shelters, and cultural and public recreation
facilities.
Lodging Uses include resorts, hotels, motels, and bed and breakfast inns.
Sources: City of San Luis Obispo Parcel Data SIC Correspondence; Economic & Planning Systems, Inc.
[1] This table provides a summary only. For more specific direction, refer to the City of San Luis Obispo Parcel Data
SIC Correspondence table.
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3. TRANSPORTATION IMPACT FEE
This Chapter establishes the maximum transportation impact fees under the Mitigation Fee Act
that could be required of new development in the City of San Luis Obispo. These fees would
represent an update to the existing transportation impact fee programs in the City. The fees will
apply to all new development in the City unless project-specific terms or agreements may apply.
The updated transportation component of the CFF is intended to address the need for
transportation facilities to accommodate new development in the City of San Luis Obispo. These
include multimodal projects such as regional interchanges, intersection improvements, street
widening and extension projects, pedestrian and bicycle improvements, and transit
improvements. As noted previously, it is the City’s policy to ensure that new development pays
for its fair share of the cost of transportation improvements, and the transportation impact fee
program is one of the City’s key strategies for doing so.
Mitigation Fee Act Nexus Findings
Nexus findings are provided below addressing: 1) the purpose of the fee; 2) the specific use of
fee revenue; 3) the relationship between the facility and the type of development; 4) the
relationship between the need for the facility and the type of development; and 5) the
relationship between the amount of the fee and the proportionality of cost specifically
attributable to development. The technical information and calculations provided below support
these nexus findings/requirements.
Purpose
The revenue collected from the transportation fee program will help maintain adequate levels of
transportation service in the City of San Luis Obispo by mitigating the impact that new
development will have on the City’s transportation system.
Use of Fee
Fee revenue will be used to help fund City transportation improvements or the City’s share of
regional improvements, including regional interchanges, intersection improvements, street
widening and extension projects, pedestrian and bicycle improvements, and transit
improvements, as well as the reimbursement of upfront investments from other City funds for
transportation improvements required to serve future growth. A detailed project list is included
in Appendix A of this study.
Relationship
New residential and commercial development in the City of San Luis Obispo will increase the
average number of daily trips in the City, thereby increasing demands for and travel on the City’s
transportation network. Average daily trip data by land use category underscores the relationship
between the type of new development and the needed transportation facilities.
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Need
Each new development project will add to the incremental need for transportation capacity and
improvements in the City. The transportation improvements considered in this study are
considered necessary to meet the City's future transportation needs under General Plan buildout.
Proportionality
The maximum fee levels are tied to fair share cost allocations to new development in the City
using the City’s transportation model or proportional growth forecasts as appropriate for each
improvement item.
Background
The City’s existing transportation impact fees include a Citywide transportation fee as well as
fees applicable to sub-areas of the City, which generally correspond to the Specific Plan areas.
The City’s transportation impact fee program was originally established in 1995. In 2006, the
first comprehensive update in over 10 years was completed by MuniFinancial. Apart from annual
adjustments to the fees, the citywide program has not been updated since 2006.
Over the years, the transportation fee evolved into a relatively complex fee program with a
Citywide fee, three subarea fees associated with the different growth areas, and an additional
subarea-fee associated with an individual transportation improvement. A map of the current
transportation subareas is provided as Figure 1. The “Triple Fee Zone” is a geographic subarea
in the City where the Citywide fee, the LOVR subarea fee, and the AASP fee apply to new
development.
Figure 1 Map of Current Transportation Fee Subareas
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The variation in fees between geographic subareas, the lack of consistency of land use categories
between subareas, the specifics of the allocations of improvement costs for some improvements,
and lack of clarity in terms of which fees apply have resulted in questions concerning whether
the existing fee program could be improved from administrative efficiency, economic
development, and other perspectives.
In a series of Council study sessions in 2014, the Council directed staff to work with consultants
to update the transportation impact fee, and in so doing, to work towards simplifying the existing
fee programs where possible (e.g., reconcile land use categories, reduce geographic fee level
variations).
Geography of Transportation Fee Program
In response to this direction, this fee update creates a citywide fee geography that subsumes the
Airport Area Specific Plan and Margarita Area Specific Plan subarea transportation impact fee
programs. The Los Osos Valley Road Subarea and the Orcutt Area Specific Plan Subarea remain
in place, such that new development in either of those two areas will pay the appropriate
Citywide fee plus the applicable subarea fee.
Figure 2 below presents the revised geographies associated with the updated transportation fee
program.
Figure 2 Revised Geographic Areas of Updated Transportation Fee Program
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Land Use Categories and Growth Assumptions
Within this citywide fee geography, a simplified and consistent set of land use categories was
identified. The land use categories are:
Residential
— Single family
— Multifamily
Non-Residential
— Office/Service
— Retail
— Industrial
— Institutional
— Lodging
For the transportation fee, the “office” and “service” categories are combined due to the
similarity of uses. Examples of types of development anticipated within each of these land use
categories are provided in Table 6.
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Table 6 Land Use Category Definitions
Land Use Category Description and Examples [1]
Single Family Single family detached dwelling units, single family attached dwelling units
including Townhome-style units. A single Accessory Dwelling Unit (ADU) is
allowed as part of the construction of a single family home and is not
charged separate impact fees.
Multifamily Multifamily attached dwelling units and mobile homes.
Office Uses include professional services, financial institutions, administration-type
uses, including administration of private-sector utilities, and certain types of
services, such as tax return preparation, advertising agencies, photography
studios, pest control, building maintenance, employment agencies, security
and computer-related services.
Services Uses include offices and clinics of medical and health practitioners, religious
organizations, membership organizations, certain transportation uses,
beauty/barber shops, funeral services, and repair shops.
Retail Uses include regional- and neighborhood-serving retail establishments,
including retail as part of mixed-use developments. Specific uses include
restaurants, gas stations and auto care, movie theaters, fitness facilities,
warehouse stores, department stores, grocery stores, and amusement and
recreation services.
Industrial Uses include construction, manufacturing, and transportation uses, as well
as warehousing and storage. Ancillary office space included as part of
industrial development is included.
Institutional Uses include City, County, and State offices and facilities, health care
facilities such as Mental Health and Public Health services, Social services
such as County Social Services, CA Employment Development and
Rehabilitation, Homeless shelters, and cultural and public recreation
facilities.
Lodging Uses include resorts, hotels, motels, and bed and breakfast inns.
Sources: City of San Luis Obispo Parcel Data SIC Correspondence; Economic & Planning Systems, Inc.
[1] This table provides a summary only. For more specific direction, refer to the City of San Luis Obispo Parcel Data
SIC Correspondence table.
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Transportation Improvements and Cost Estimates
The improvements that are the basis for the transportation impact fee update are derived from
several sources:
The 2014 Land Use and Circulation Element (LUCE)
The City’s existing citywide transportation impact fee program, which was adopted in 2006
The Los Osos Valley Road Subarea Transportation Impact Fee
The Margarita Area Specific Plan Subarea Transportation Impact Fee
The Airport Area Specific Plan Subarea Transportation Impact Fee
The Orcutt Area Specific Plan Subarea Transportation Impact Fee
Total Project Costs
The infrastructure identified in this Study has been identified because the improvements are
necessary to support buildout of the current General Plan, for consistency with General Plan
policy, and/or because there are reimbursement commitments in place. Table 7 provides a
summary of improvements and costs by broad category.
Table 7 Summary of Types of Transportation Improvements and Costs
The detailed project improvement list is provided as Appendix A. The project list was prepared
by City staff and reviewed at the request of Council to make sure the scope of the improvements
is consistent with the amount of development that is expected under General Plan buildout. Full
project cost estimates for each improvement are presented. For regional projects, cost estimates
are prepared by CalTrans; in other cases, cost estimates are provided by developers who will
have responsibility for building the improvements; and still, in other cases, cost estimates are
provided by Wallace Group, a cost estimator consultant to the City. For those projects for which
Improvement Category Cost Percentage
Interchanges $57,660,377 21.2%
Intersection $50,380,000 18.5%
Street Widening $46,371,495 17.1%
Street Extension $53,667,341 19.8%
Pedestrian/ Bicycle $54,166,000 19.9%
Transit $6,500,000 2.4%
Other $2,900,000 1.1%
Total $271,645,214 100.0%
Sources: City of San Luis Obispo; Wallace Group; Cambridge Systematics; and
Economic & Planning Systems, Inc.
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financing costs are included, those cost estimates were provided by the City’s engineering and
cost consultant. All costs are provided in 2018 dollars. It is important to note that the capital
improvement list represents a current list of transportation improvements for the purposes of the
calculation of the development impact fee and broader financial planning. Over time, as part of
the periodic, formal updates, it is possible that new projects may be added and current projects
modified.
Costs Included in Fee Program
The full project costs associated with each improvement are not necessarily included in the
transportation fee program. For example, for some project-specific improvements that are
adjacent to new development, a portion of the construction cost will be borne by developers with
property fronting or adjacent to the improvement in the form of development exactions. Aside
from developer exactions, funding from other sources is also assumed for certain projects,
including funding from SLOCOG and other grant sources, to the extent these sources are known
at this time. Where other funding sources are available, that available funding is subtracted from
the total project costs and only the balance of the project costs is included in the fee program.
As presented in Table 8, the total cost for all transportation-related improvements is estimated
to be $271.6 million, and the share of this cost that is included in the City’s CFF program is
$216.6 million. For each improvement item, Appendix A provides detailed information of the
costs allocated to the fee program (CFF Cost).
Table 8 Summary of Cost Allocations
Cost Allocation to New Development
The allocation of costs between new and existing development and by land use is a critical
component of the fee nexus analyses. All of the transportation improvements included in the
CFF, listed in Appendix A and summarized in Table 7, will benefit new development in the City.
While each of the improvements on the project list benefits new development in the City to some
degree, in some cases an identified improvement may benefit new development in the larger
region, such as an interchange improvement, and some improvements also may benefit existing
development in the City or the region. To ensure that new development in the City is not paying
on behalf of existing development in the City, future regional development, or to mitigate
existing deficiencies in the transportation network, only the share of costs that is proportionally
Item Amount
Total Transportation Project Costs (Including Financing) $271,645,214
Direct Developer Contribution $31,265,720
Grants/Other Sources $23,800,000
Costs Included in Fee Program $216,579,494
Sources: City of San Luis Obispo; Wallace Group; and Economic & Planning Systems, Inc.
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related to the benefit received by new development is included in the fee program. This detailed
allocation, which varies by improvement, is shown in Appendix A and illustrated in Figure 3.
Figure 3 Allocation to New Development
Fee Calculation
The fee calculations are based on an average cost per trip that is the result of dividing the costs
of the improvements that are attributable to new development by the number of average daily
trips (ADT) that are generated by the projected new development. The average cost per trip is
then multiplied by the ADT associated with each land use category to calculate maximum fees by
land use category. These steps are described in more detail below.
Geographic Area Adjustments
Prior to calculating the fees, two geographic area adjustments are made. Due to the pre-existing
Los Osos Valley Road subarea fee which was established in 2003 and which is proposed to
remain in place and due to a direct contribution that the San Luis Ranch development is making
towards the Prado Road interchange, adjustments to the Citywide fee are made for these two
areas to avoid over-charging for the same project costs.
To calculate these adjustments, three steps, labeled A through C, are required:
A. Base Citywide Fee. The base Citywide fee is calculated based on the cost of all
improvements except the Los Osos Valley Road Interchange and the Prado Road Interchange
and using the full growth forecast.
B. Prado Road Interchange Add-on. An adjustment for the San Luis Ranch project is made
because the San Luis Ranch developer has a 28 percent fair share allocation obligation
towards the Highway 101/Prado Road Interchange improvements plus related financing.
Because the developer is paying this obligation directly, the developer should not also pay Total Project Costs $271.6 MillionRegional Funding:
$23.9 Million
Developer Contribution:
$31.3 Million
Grants/Other Sources:
$23.8 Million
Existing Development:
$49.3 Million
New Development:
$143.4 Million
Less Fees Collected:
$135.5 Million
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the component of the citywide fee that is attributable to the Prado Road Interchange project.
The San Luis Ranch add-on is calculated based on the cost of the Prado Road Interchange
(net of San Luis Ranch’s direct obligation) and using the Citywide growth forecast less the
development anticipated as part of the San Luis Ranch project. This add-on applies to all new
development in the City except the San Luis Ranch project.
C. Los Osos Valley Road Interchange Add-on. New development in the Los Osos Valley
Road subarea will pay a Citywide fee plus the existing Los Osos Valley Road subarea fee,
which funds a portion of the Highway 101/Los Osos Valley Road Interchange improvements
plus related financing. Therefore, new development in the Los Osos Valley Road subarea
should not pay the LOVR subarea fee plus the component of the citywide fee that is
attributable to the Los Osos Valley Road Interchange improvement. The Los Osos Valley Road
Interchange add-on is calculated based on the cost of the interchange improvement (beyond
the cost that is already the basis of the LOVR subarea fee) and using the citywide growth
forecast less the development anticipated in the Los Osos Valley Road subarea. This add-on
applies to all new development in the City except for new development in the Los Osos Valley
Road subarea.
Citywide Growth Projections and Trip Generation
Citywide growth projections indicate new development of 6,136 residential units, 651 hotel
rooms, and 5.1 million square feet of non-residential uses, as shown on Table 9. Average Daily
Trip (ADT) generation rates were provided by City staff in collaboration with the City’s
transportation consultant and based on trip generation data from the Institute of Transportation
Engineers (ITE). Based on the development forecast assumed in the transportation model,
Citywide growth is forecast to generate 233,000 new trips, consisting of 89,000 new trips
attributable to residential growth and 144,000 new trips attributable to non-residential growth.
Table 10 presents the trip rate estimates by land use category and total trips based on the
growth forecasts.
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Table 9 Citywide Growth Projections
Land Use Existing Growth Buildout % Growth
Residential (Dwelling Units)
Single Family 8,289 3,102 11,391 37%
Multifamily 12,084 3,034 15,118 25%
Total Residential Units 20,373 6,136 26,509 30%
Non-Residential (Sq.Ft.)
Office/Service 2,487,603 3,911,560 6,399,163 157%
Retail 5,290,842 1,043,493 6,334,335 20%
Industrial 2,987,985 115,185 3,103,170 4%
Institutional 340,771 44,439 385,210 13%
Total Non-Residential Sq.Ft.11,107,201 5,114,677 16,221,878 46%
Lodging (Rooms)2,183 651 2,834 30%
Sources: City of San Luis Obispo; Economic & Planning Systems, Inc.
are greater than the General Plan growth forecasts that focus on potential growth through 2035.
(1) Transportation model growth forecasts based on development capacity. As a result, growth forecasts
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Table 10 Citywide Trip Generation
Cost per Trip
The cost allocation to new development divided by the total new trips generated by new
development results in average cost per trip of approximately $410 for the Citywide base fee, as
shown on Table 11. The average cost per trip for the Prado Road Interchange is approximately
$136, and the average cost per trip for the Los Osos Valley Road Interchange is approximately
$60.
Land Use Existing Growth
Residential
Single Family 16.24 per unit 134,611 50,376 184,986
Multifamily 12.62 per unit 152,467 38,281 190,748
Subtotal 287,078 88,656 375,735
Non-Residential
Office/Service (1) 18.45 per 1,000 sq.ft. 45,885 72,151 118,036
Retail (2)56.92 per 1,000 sq.ft. 301,140 59,393 360,532
Industrial 11.33 per 1,000 sq.ft. 33,852 1,305 35,157
Institutional (3)18.45 per 1,000 sq.ft. 6,286 820 7,105
Lodging (4)16.38 per room 35,758 10,663 46,421
Subtotal 422,921 144,332 567,252
Total Trips 709,999 232,988 942,987
% of Total Buildout Trips 75.29% 24.71% 100.00%
(1) Trip generation rates based on an average of office and service trip rates provided by the City of San
Luis Obispo.
(2) Trip generation rates based on an average of low and medium retail trip rates provided by the City of
San Luis Obispo.
(3) Trip generation rates based on office/service trip rates provided by the City of San Luis Obispo.
(4) Trip generation rates based on motel trip rates provided by the City of San Luis Obispo.
Sources: City of San Luis Obispo and Economic & Planning Systems, Inc.
Rates Buildout
Trip Generation
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Table 11 Average Cost per Trip
Fees by Land Use Category
Using the calculated cost per trip and the average daily trips for each land use category, the
maximum justifiable fees for the Citywide base fee component are calculated and presented in
Table 12. The San Luis Ranch and the Los Osos Valley Road subarea add-ons are shown on the
same table.
In combination, these three steps are the components of the maximum Citywide fees.
Specifically, the maximum Citywide fee is the sum of the base Citywide fee, the Los Osos Valley
Road Interchange add-on, and the Prado Road Interchange add-on (Step A + Step B + Step C).
For new development in the Los Osos Valley Road subarea, the maximum Citywide fee is the
base Citywide fee plus the Prado Road Interchange add-on (Step A + Step B). For the San Luis
Ranch project, the maximum Citywide fee is the sum of the base Citywide fee and the Los Osos
Valley Road Interchange add-on (Step A + Step C). The resulting maximum fees are shown
below in Table 13.
New Trips2 Average Cost
Geography/Improvement Total Costs Net Costs
1 (ADT) per Trip
Citywide Base $103,077,781 $95,480,903 232,988 $409.81
Prado Road Interchange $28,663,545 $28,663,545 211,038 $135.82
Los Osos Valley Road Interchange $11,636,833 $11,636,833 195,346 $59.57
Total $143,378,158 $135,781,280
Sources: City of San Luis Obispo; Economic & Planning Systems, Inc.
Cost Allocations to New
Development
1 Removes existing transportation impact fee fund balances from the total costs allocated to new growth. Latest fee
balances available from City (June 30, 2017) indicate a total fee balance of about $7.6 million, including $6.1 million in
Citywide Transportation Impact Fee fund, $1.1 million in Airport Area Impact Fee Fund, and $417,300 in the Margarita
Area Specific Plan Fund. The fund balance of $129,400 for Los Osos Valley Road is not included.
2 For the Prado Road Interchange, the estimate of new trips is the number of Citywide trips less the trips associated with
the San Luis Ranch project. Similarly, for the Los Osos Valley Road Interchange, the estimated of new trips is the
number of Citywide trips less the trips associated with anticipated new development in the Los Osos Valley Road
subarea.
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4. PARKLAND IN-LIEU FEE AND PARKS AND RECREATION
DEVELOPMENT IMPACT FEE
This Chapter establishes the maximum parkland in-lieu fees under the Quimby Act and the
maximum parks and recreation capital facilities fees under the Mitigation Fee Act (parks
development impact fees) that could be required of new development in the City of San Luis
Obispo. These fees would represent an update to the existing parkland in-lieu fees and the
establishment of new parks development impact fees.
Any updated/new adopted fees will apply to all new development (unless particular exceptions
are specified in adoption) in the City, outside of areas with Specific Plans and/or under
Development Agreements that specify different requirements for parkland and park capital
facilities. For example, the Margarita Area Specific Plan, the Orcutt Area Specific Plan, and the
Avila Ranch project within the Airport Area Specific Plan all have specified park requirements
through their Specific Plans or Development Agreements
The City currently has a parkland in-lieu fee established under the Quimby Act (California
Government Code 66477) within the Subdivision Map Act that applies to new single family
developments and multifamily condominium developments in the City of San Luis Obispo. The
parkland in-lieu fees were first established in 1994 and have been updated periodically since.
The City currently has no parks development impact fees under the Mitigation Fee Act (California
Government Code 66000 et seq.). The parks development impact fees could require new rental
multifamily and non-residential development to contribute for their impacts on demand for
parkland and parks and recreation capital facilities as well as for new single family and
condominium development to contribute for its impacts on parks and recreation capital facilities.
The City is embarking on a Citywide Park and Recreation Master Plan that, when completed, will
provide detailed information on the specific investments in new parkland and parks and
recreation facilities that will be undertaken. Once the Master Plan is completed, the new
information developed will be useful to the future update of any adopted parks development
impact fees.
Service Standards and Cost Estimates
The existing, effective park service standards and average parkland and park recreation facilities
costs estimates are important determinants of both the maximum park in-lieu fees and the
maximum park development impact fees. These fee determinants are described below.
Existing Parks Service Standards
For the purpose of both Quimby Act parkland in-lieu fees and Mitigation Fee Act parks and
recreation development impact fees, the City’s existing parks service standard - as defined by
the relationship between the existing inventory of parkland and facilities and the current
population/service population – is important. Table 14 shows the inventory of existing parks
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Table 14 Current Parkland and Recreation Facilities Land
Existing Park and Recreation Land * Acreage
Existing Parklands
Damon Garcia Sports Field, Broad @Tank Farm 22.0
Chinese Garden, Santa Rosa @ Marsh 0.3
DeVaul Park , west end of Madonna 0.9
Emerson Park, Nipomo @ Pacific 3.3
French Park, Poinsettia @ Fuller 10.0
Laguna Hills Park, San Andriano Ct.3.2
Demonstration Garden, South @ Broad 0.1
Vista lago Park, Vista del lago 0.2
Stoneridge Park, 535 Bluerock Dr 1.0
Buena Vista Park, Buena Vista Ave.0.5
Sinsheimer Park/ Sports Complex, 900 Southwood 21.7
Mitchell Park, Osos @ Bucheon 3.0
Anholm Park, Mission St 0.1
Throop Park, Cuesta @ Cerro Romauldo 3.0
Santa Rosa Park, Santa Rosa @Oak 11.0
Johnson Park, Augusta 5.0
Meadow Park, South @ Meadow 16.0
Ellsford Park, San Luis Drive near California 1.0
Osos Triangle Park, Osos @ Church 0.2
Las Praderas Park, Las Praderas and Mariposa 0.4
Priolo-Martin Park, Vista del Collados & Vista del Arroyo 0.5
Laguna Lake Park, 500 Madonna Rd 40.0
Jack House Gardens, Marsh @ Beach 0.8
Laguna Lake Golf Course, 11175 LOVR 27.0
Railroad Bike Path, Orcutt to Jennifer 10.0
Poinsettia Creek Walk, Poinsettia @ Rosemary 2.0
Total Existing Parklands 183.2
Existing Recreational Facilities
Rodriguez Adobe, Purple Sage Lane 1.4
Islay Hills Park, Tank Farm @ Orcutt 6.0
Canet Adobe, 464 Dana St.0.5
Mission Plaza, Broad @ Monterey 3.0
Ludwick Center, Santa Rosa @ Mill 1.0
Jack House, 536 Marsh St 0.1
Senior Center, 1445 Santa Rosa St 0.1
Meadow Park Center, 2333 Meadow St 0.1
Total Existing Recreational Facilities 12.2
Total Existing Parklands and Recreational Facilities 195.4
* This does not include the substantial inventory of City open space.
Sources: City of San Luis Obispo; Economic & Planning Systems, Inc.
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and recreation facilities land as developed by City staff, excluding the City’s substantial inventory
of open space. As shown, the City’s parks and recreation facilities are spread across 195.4 acres
of land, including 183.2 acres associated with existing parks and an additional 12.2 acres
associated with additional recreation facilities.
For the purposes of parks fee calculations, this inventory is then converted into a parks standard
per 1,000 residents and per 1,000 service population. As shown in Table 15, the effective parks
standard is 4.18 acres per 1,000 residents and 2.69 acres per 1,000 service population. As
discussed in Chapter 2, service population is a metric that takes into account both residents and
workers that captures their relative demand for capital facilities.
Table 15 Effective Parks Standards
For the calculation of City of San Luis Obispo parks fees, both of these service standards are
important as follows:
Parkland In-Lieu Fees. Under the Quimby Act, all cities can establish parkland in-lieu fees
using a base standard of 3.0 acres per 1,000 residents. To the extent a city provides a
service standard above 3.0 acre per 1,000 residents, the City may use this higher standard,
but cannot use a standard above 5.0 acres per 1,000 residents. For the City of San Luis
Obispo, the maximum park in-lieu fee estimates are therefore based on the standard of 4.18
acres per 1,000 residents.
Park Development Impact Fees. For development impact fees under the Mitigation Fee
Act, if the City establishes its maximum fee schedule based on the current, effective service
standard, the City ensures new development is paying its proportional share with no fee-
related requirement to backfill for existing deficiencies. City staff has indicated that parks
and recreation facilities are used by both residents and workers, so the service standard of
2.69 acres per 1,000 service population is used (rather than the per 1,000 resident standard)
Item
2017 City Residents
2017 Jobs
2017 City Service Population (1)
2017 Park and Recreation Land 195.39 acres
Park Acres per 1,000 Residents 4.18 acres
Park Acres per 1,000 Service Population 2.69 acres
(1) Service population is a measure of relative demand between residents and employees
Jobs/ employees are given half the weight of a resident.
Sources: City of San Luis Obispo; California Department of Finance (population);
SLOCOG (jobs); Economic & Planning Systems, Inc.
46,724
52,092
72,770
Amount
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to establish the maximum development impact fees on new residential and non-residential
development.9
Cost Estimates
The fee estimates are driven by costs, including estimated average per acre land value costs for
parkland and average per acre costs of parkland improvements. The costs of acquiring land for
parks and the costs of improving parkland vary on a project-by-project basis. The City recently
evaluated the value of land and the cost of parkland improvements in the Orcutt Area and these
estimates are considered reasonable average planning-level cost estimates for the purposes of
this fee update/establishment. Based on the information provided by City staff, the average cost
estimates are as follows:
Parkland. Average land cost of $300,000 per acre.
Parkland Improvements. Average improvement cost of $427,000 per acre.
Park In-Lieu Fee
Under the Quimby Act, the parkland in-lieu fee is applied to single family development and
multifamily condominium development through the Subdivision Map Act. The Quimby Act
requires the maximum parkland in-lieu fee to be established based on: (1) parkland service
standard per 1,000 residents; (2) land value estimates; and, (3) persons per household.
As shown in Table 16, the existing standard is 4.18 acres per 1,000 residents (see Table 15),
the existing land cost is $300,000 per acre (see above), and the persons per unit are 2.51
persons per single family unit and 1.81 persons per multifamily/condominium unit (see Chapter
2).
As shown, the resulting, parkland cost per new resident is about $1,255, which translates into
the following maximum parkland in-lieu fees under the Quimby Act:
Single Family Development. $3,151 per unit.
Condominium Development. $2,269 per unit.
9 It is important to note that, because single family and multifamily condominium development, will
pay the parkland in lieu fee to cover their parkland impacts, they would only pay the park and
recreation capital facilities portion of the new park development impact fees (i.e. not the parkland
portion).
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Table 16 Maximum Park In-Lieu Fees
Mitigation Fee Act Nexus Findings
Development impact fees can be charged to new development under the Mitigation Fee Act.
Nexus findings are provided below addressing: 1) the purpose of the fee; 2) the specific use of
fee revenue; 3) the relationship between the facility and the type of development; 4) the
relationship between the need for the facility and the type of development; and 5) the
relationship between the amount of the fee and the proportionality of cost specifically
attributable to development. The technical information and calculations provided below support
these nexus findings/requirements.
Purpose
The fee will support provision of adequate levels of parkland and parks and recreation facilities in
the City as new development occurs and will help ensure that new development pays its fair
share of capital facilities costs consistent with City policy.
Use of Fee
Fee revenue will contribute funding towards acquisition of parkland and the improvement of
existing and newly acquired parkland.
Item Source/ Calculation
Existing Standard (a)4.18 acres/ 1,000 persons See Table 15
Cost/ Acre (1)(b)$300,000 per acre City Staff/ Orcutt Area
Cost/ 1,000 persons (c)(c) = (a) * (b)
(d)(d) = (c) / 1,000
Single Family (e)2.51 persons/ housing unit
Multifamily (f)1.81 persons/ housing unit
Single Family (g)$3,151 per unit (g) = (d) * (e)
Parkland In-Lieu Fee
Multifamily/ Condominiums (h)$2,269 per unit (h) = (d) * (f)
Parkland In-Lieu Fee
(1) Per acre land and improvement costs provided by City staff based
on recent values from the Orcutt Area.
Sources: City of San Luis Obispo; Economic & Planning Systems, Inc.
$1,254.54
Parkland
In-Lieu Fee
Cost per Person
$1,254,537
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Relationship
New residential and non-residential development and the associated new residents and workers
in San Luis Obispo will increase the City’s demand for parkland and parks and recreation
facilities. Fee revenue from this new development will be used to provide acquire additional
parkland and improvements thereby increasing the availability of improved parkland consistent
with the demand of the new residents and workers.
Need
Each new residential and non-residential development project will add to the incremental
demand/need for parkland and parks and recreation facilities. As a result, new parkland
acquisition and improvements are necessary to maintain the City's existing level of service.
Proportionality
The existing, effective parks service standard in the City is used to ensure that new development
is required to fund sufficient parkland and parkland improvements to maintain the existing
service standards in the City, but no more. In this way, the contribution of new development is
proportional to its impact and is not expanded beyond its appropriate share.
Impact Fee Technical Analysis
The Mitigation Fee Act maximum parks development impact fee calculations are driven by: (1)
the parkland service standard per 1,000 service population; (2) the land value and parkland
improvement cost estimates; and (3) the persons per household/employment densities.
As shown in Table 17, the existing parks service standard is 2.69 per 1,000 service population.
The service population service standard is applied as it appropriately distributes demand between
residential and non-residential development. When this service standard is combined with the
cost estimates (described above), an average cost of about $806 per new service population is
estimated for parkland acquisition and an average cost of about $1,147 per new service
population is estimated for parkland improvements. For land uses, where parkland and parkland
improvements will be part of the new maximum development impact fee (i.e., all land uses
except single family development and multifamily/condominium development where the parkland
in-lieu fee applies), both of these fee components will apply.
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Table 17 Parkland and Improvements Cost Multiplier
Item
Parks Standard 2.69 acres/ 1,000
serv. pop.
2.69 acres/ 1,000
serv. pop.
Cost/ Acre $300,000 per acre $427,000 per acre $727,000 per acre
Cost/ 1,000 Service Population
Service Population
(1) Per acre land and improvement costs provided by City staff based on recent values from the Orcutt Area.
Sources: City of San Luis Obispo; Economic & Planning Systems, Inc.
$805,512
$806
$1,146,512
$1,147
$1,952,024
$1,952
Land (1)Improvements (1)
Average Cost per New
(Mitigation Fee Act) (Mitigation Fee Act)Total
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To determine the maximum parks and recreation development impact fees, the per service
population cost is applied to the relevant service population generation per residential unit type
or per non-residential square foot or room (for hotels/motels). Table 18 shows the estimated
service populations. As shown, the persons per household and employment density (square feet
per job) estimates, derived in Chapter 2, are converted into service population factors using the
service population multipliers (i.e. one worker represents 50 percent of the demand of one
resident). In Table 19, these service population generation factors are then applied to the cost
per service population estimates in Table 17, for parkland and park improvements as
appropriate, to derive the maximum development impact fees applicable to the different land
uses.
Table 19 Maximum Parks Development Impact Fees by Land Use
As shown, the maximum development impact fees are:
Single Family. $2,880 per single family unit for parkland improvements (cost of parkland
impacts covered through separate parkland in-lieu fee).
Multifamily (Condominiums). $2,074 per multifamily/condominium unit for parkland
improvements (cost of parkland impacts covered through separate parkland in-lieu fee).
Multifamily (Apartments). $3,530 per multifamily/apartment unit in total, including
$1,457 per unit for parkland and $2,074 per unit for parkland improvements.
Item Land (1) Improvements Total
Residential (per Unit)
Single Family na $2,880 $2,880
Multifamily (Condominiums)na $2,074 $2,074
Multifamily (Apartments)$1,457 $2,074 $3,530
Non-Residential (Per Sq. Ft.)
Office $1.34 $1.91 $3.25
Retail/ Service/ Institutional $0.73 $1.04 $1.77
Industrial $0.54 $0.76 $1.30
Lodging (per room)$403 $573 $976
(1) Single Family and Multifamily/ Condominiums do not pay parkland component of development
impact fee. Their parkland requirements are covered through the Parkland In-Lieu Fee under
the Quimby Act.
Sources: San Luis Obispo General Plan/ LUCE; City of San Luis Obispo; Economic & Planning Systems, Inc.
Parks Development Impact Fee
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Office. $3.25 per office building square foot for both parkland and parkland improvements.
Retail/Service/Institutional. $1.77 per retail/service/institutional building square foot for
both parkland and parkland improvements.
Industrial. $1.30 per industrial building square foot for both parkland and parkland
improvements.
Hotel. $976 per hotel room for both parkland and parkland improvements.
While these maximum parks development impact fees are driven by the existing service
standard (and not on a capital improvement list), the City has provided some examples of
envisioned new investment in parkland acquisition and parkland improvements to indicate the
potential use of the fees. City Parks Department staff indicated the following as examples of
envisioned future developments that parks development impact fees could contribute to (more
detailed plans will be developed as part of City’s upcoming Parks Master Plan):
Parkland. Pocket Park (Toro @ Marsh), Cheng Park Expansion (Santa Rosa @ Marsh).
Recreational Facilities. Margarita Area Sports Fields, Rosa Butron Adobe and Grounds,
Creek Plaza (Higuera @ Nipomo), Emerson Parks public restrooms, Mission Plaza
performance platform.
Community Landscaped Improvements. Mission Plaza Creek Walk/Linear Park, Mission
Plaza renovation.
Combined Schedule of Park Fees
The park in-lieu fees and park development impact fees addressed in this Chapter and described
above are adopted under two distinct California codes. Table 20 shows both the maximum park
in-lieu fees and park development impact fees together in a schedule for the pertinent land uses
so the overall maximum fees can be viewed together.
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Table 20 Parkland In-Lieu/Parks Development Impact Fee Combined Schedule
Item Land Improvements
Residential (per Unit)
Single Family $3,151 $2,880 $6,030 per unit
Multifamily (Condominiums)$2,269 $2,074 $4,342 per unit
Multifamily (Apartments)$1,457 $2,074 $3,530 per unit
Non-Residential
Office $1.34 $1.91 $3.25 per sq.ft.
Retail/ Service/ Institutional $0.73 $1.04 $1.77 per sq.ft.
Industrial $0.54 $0.76 $1.30 per sq.ft.
Lodging $403 $573 $976 per room
(1) Shows both Park In-Lieu fees under the Quimby Act and Park Development Impact Fees
under the Mitigation Fee Act.
Sources: City of San Luis Obispo; Economic & Planning Systems, Inc.
Total
Maximum Parks Fees (1)
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5. GENERAL GOVERNMENT IMPACT FEE
This Chapter establishes the maximum general government fees under the Mitigation Fee Act
that could be required of new development in the City of San Luis Obispo. The general
government portion relates to the administrative functions of the City associated with serving the
public.
Mitigation Fee Act Nexus Findings
Nexus findings are provided below addressing: 1) the purpose of the fee; 2) the specific use of
fee revenue; 3) the relationship between the facility and the type of development; 4) the
relationship between the need for the facility and the type of development; and 5) the
relationship between the amount of the fee and the proportionality of cost specifically
attributable to development. The technical information and calculations provided below support
these nexus findings/requirements.
Purpose
The fee will support provision of adequate levels of general government facilities in the City as
new development occurs and help ensure that new development pays its fair share of
administrative capital facilities costs consistent with City policy.
Use of Fee
Fee revenue will contribute funding for expansion of general government facilities to maintain the
existing service general government service levels for new growth.
Relationship
New residential and non-residential development and the associated new residents and workers
in San Luis Obispo will increase the City’s demand for general government services, and thus
require additional facilities to maintain existing service standards for new growth.
Need
Each new residential and non-residential development project will add to the incremental
demand/need for general government services and facilities. As a result, new general
government space is necessary to maintain the City's existing level of service.
Proportionality
The identified general government investments are required to ensure new development can be
served without reducing the quality of service to the existing service population. As a result, the
full cost of maintaining existing service standards is allocated to new development. Costs are
allocated between land uses based on their relative service populations.
Service Standards and Cost Assumptions
Since most general government services serve both the needs of residents and businesses
(employees), it is assumed that both residential and non-residential development will pay a
general government impact fee. Thus a service population is used to determine existing service
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standards. As described in Chapter 2, the service population gives a resident equivalent
weighting of 1.0 for residents and 0.5 for employees (i.e. two employees generate the equivalent
demand of general government space as one resident).
The cost of the general government capital facilities is based on maintaining existing service
standards for new growth. City staff identified that existing general government services are
currently provided through the 40,000 square feet of administrative facilities which includes
23,000 square feet of City Hall space, and 17,000 square feet of Public Works/Community
Development office space. Based on the existing service population of 72,800, the existing
citywide service standard is approximately 549 square feet per 1,000 service population. This
same standard of space per service population is applied to the new growth of 15,500 service
population, as estimated in Chapter 2, resulting in the need for an additional 8,500 square feet
of general government facilities space. Although construction costs vary by project, EPS used an
average construction cost estimate of $500 per square feet resulting in a total construction cost
of approximately $4.3 million.
Cost Allocation and Fee Calculations
As mentioned, the general government capital facility cost is calculated based on maintaining the
same level of service for new development as is currently provided to existing service population.
As shown in Table 21 the total cost of maintaining service standards for new growth is $4.3
million and is allocated entirely to new growth. This $4.3 million is then divided by the new
service population of 15,500 to reach an average cost per new service population of $274.64.
This average cost per service population is used to derive the general government impact fee
based on relative demand from residents and employees for each land use, as shown in Table
22.
Table 21 General Government Cost Estimates and New Growth Allocation
City Hall 22,971
Public Works/ Community Development Office 17,000
Total Existing Administrative Facilities 39,971
Existing Service Population (1)
Implied Citywide Existing Service Standard 549 Sq.Ft./1,000 Serv. Pop.
New Service Population (1)
Square Footage Allocated to New Growth 8,522
Average Administrative Facilities Construction Cost $500
Development Cost Allocated to New Growth
Average Cost per New Service Population
Sources: City of San Luis Obispo; and Economic & Planning Systems, Inc.
Item Assumptions
72,770
15,516
Sq.Ft.
Sq.Ft.
$274.64
$4,261,246
Sq.Ft.
per Sq.Ft.
Sq.Ft.
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While these maximum general government development impact fees are driven by the existing
service standard (and not on a capital improvement list), the City has provided some examples
of envisioned new investment in general government improvements to indicate the potential use
of the fees. For example, City Staff indicated that the funds collected could contribute to the
repurposing of the City Hall Annex (The Little Theater) to expand City Hall facilities.
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6. POLICE IMPACT FEE
This Chapter establishes the maximum police fees under the Mitigation Fee Act that could be
required of new development in the City of San Luis Obispo. The City of San Luis Obispo’s Police
Department is responsible for a range of services in the City, including patrol services, 911-
dispatch, a traffic safety unit, neighborhood services, records unit, and investigations.
Mitigation Fee Act Nexus Findings
Nexus findings are provided below addressing: 1) the purpose of the fee; 2) the specific use of
fee revenue; 3) the relationship between the facility and the type of development; 4) the
relationship between the need for the facility and the type of development; and 5) the
relationship between the amount of the fee and the proportionality of cost specifically
attributable to development. The technical information and calculations provided below support
these nexus findings/requirements.
Purpose
The fee will help ensure there are sufficient police facilities and vehicles to serve new
development.
Use of Fee
Fee revenues will be used to help construct a new police headquarters and purchase vehicles to
maintain the existing ratio of police vehicles to service population.
Relationship
New development in the City will increase demand for police services thereby contributing to the
need for an expanded police headquarters facility and the need for police vehicles.
Need
Each new residential and non-residential development project will add to the incremental
demand/need for police facilities and vehicles. As a result, improvements to facilities as well as
the need for additional police vehicles in order to maintain existing service standards are
required.
Proportionality
Vehicles: The identified new police vehicles reflect the required investments to maintain existing
police vehicle service standards in the City. As a result, the full cost of these vehicles is allocated
to new development.
Construction of New Police Headquarters: Construction of a new police headquarters will
serve both the existing service population and the new service population. The allocation of the
police headquarters cost is tied to the proportional demand attributable to new growth.
Capital Improvements and Cost Estimates
The Police Department identified two primary improvement types that would help serve new
growth, including construction of a new police headquarters for the City and police vehicles.
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Police Vehicle Improvements
The total cost of new police vehicle purchases is based on the City’s existing service standards.
Currently, the Department identified 44 police vehicles for 59 sworn officers, resulting in a ratio
of 0.75 police vehicle(s) to one sworn officer. These 59 sworn officers serve an existing service
population of 72,800, resulting in a ratio of 0.81 sworn officers per 1,000 service population.
With projected service population growth of 15,500, and a service standard of 0.81 officers per
1,000 service population, approximately 13 new officers will be required. Based on the ratio of
0.75 police vehicles to one sworn officer, new growth would require approximately 9 to 10 new
vehicles to maintain the existing police vehicle service standard.
Police Department Staff estimated that an average cost per new police vehicle, including tactical
vehicles, is approximately $65,000. This cost per vehicle is applied to the 9 to 10 new vehicles
required to maintain existing service standards for new growth, totaling $609,800, as shown in
Table 23.
Table 23 New Police Vehicle Cost Estimates
Construction of New Police Headquarters
At present, the Police Department occupies a space of 15,000 square feet for 79 personnel,
including sworn officers and civilian staff. Four traffic enforcement staff are also currently
housed in an old Victorian house nearby. As a result of the limited and inadequate facility space,
the Department is looking to replace the existing facilities with a 40,000 square foot police
headquarters to accommodate Police Department staff as the City grows. The City’s 10-Year
Capital Improvements Program reflects a planning level construction estimate of $47.4 million
for the new police headquarters, shown on Table 24.
Formula Assumptions
Existing Police Vehicles a 44
Existing Sworn Officers b 59
Police Vehicles/Sworn Officers c=a/b 0.75
Existing Service Population d 72,770
Sworn Officers/1,000 Serv. Pop.e=b/(d/1,000)0.81
Net New Service Population f
Implied New Sworn Officers g=(e(f/1,000))12.58
Implied New Vehicles (1)h=g*c 9.38
Estimated Cost per Vehicle i $65,000
Police Vehicle Cost to Serve New Development j=i*h $609,800.26
(1) Average cost includes range of vehicles such as tactical vehicles.
Sources: City of San Luis Obispo; and Economic & Planning Systems, Inc.
Item
15,516
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Table 24 Police Headquarter Cost Estimate
Total Vehicle and Police Headquarter Improvement Costs
Total costs related to police service vehicles and facilities are estimated to be $48.0 million as
shown in Table 25.
Table 25 Total Police Capital Costs
Cost Allocation
The cost allocation to new development for the required for the purchases of new police vehicles
and construction of the new Police Headquarters differ based on cost estimation methodologies.
However, for both improvement costs, EPS uses an allocation basis of service population. Since
most police services serve both the needs of residents and businesses (employees), it is
assumed that both residential and non-residential development will pay a police impact fee, thus
a service population is used to determine existing service standards. More specifically, the
service population calculated for this fee gives a resident equivalent weighting of 1.0 for
residents and 0.5 for employees (i.e., two employees generate the equivalent demand of police
facilities space/vehicles as one resident).
Police Vehicle Improvements
The total cost estimate of $609,800 for new vehicle purchases is based on maintaining current
service standards to serve population and employment growth through buildout of the General
Plan. As a result, 100 percent of the police vehicle cost is allocated to the future service
population, as shown in Table 26.
Sq.Ft.
New Police Headquarters (New Construction) (1) 40,000 $47,435,000
Sources: City of San Luis Obispo; and Economic & Planning Systems, Inc.
Item Total Capital Cost
(1) Total capital cost as reflected in the current 10-Year Capital Improvments Program.
Item Total
Police Vehicles $609,800
Police Headquarters $47,435,000
Total $48,044,800
Source: City of San Luis Obispo; and Economic & Planning Systems, Inc.
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Construction of New Police Headquarters
The new police headquarters would serve the existing service population and the new growth.
Therefore, the cost estimate for the total construction of the new headquarters must be allocated
in fair share proportion to existing service population and new service population. Cost allocation
for the 40,000 square foot police headquarters is allocated based on the proportions of the
existing service population of 72,800 and the new growth service population of 15,500. As shown
in Table 26, approximately 17.6 percent of the police headquarter cost, or $8.9 million is
allocated to new growth and included in the fee calculations.
Total Costs Allocated to New Growth
Table 26 summarizes the total costs, including purchases of new vehicles and construction of
the new police headquarters, allocated to new development for the new police improvements.
The total costs allocated to new development for police facilities are $8.9 million of the total
$48.0 million.
Table 26 Police Capital Improvement Cost Allocations
Fee Calculation
To calculate the police fee, the fair share cost allocated to new development of $8.9 million is
divided by the future growth of 15,500 to determine the average cost per new service
population, resulting in an average cost per service population of $576.59. This average cost per
service population is used to derive the general government impact fee based on relative
demand from residents and employees for each land use, as shown in Table 27.
Item Total Existing New Growth
Service Population 88,286 72,770 15,516
Allocation for Construction of Police Headquarters 100.0%82.4%17.6%
Improvement/ Vehicle Costs
Police Vehicles $609,800 $0 $609,800
Police Headquarters $47,435,000 $39,098,533 $8,336,467
Total $48,044,800 $39,098,533 $8,946,267
New Growth Improvement Costs $8,946,267
Service Population Growth 15,516
Average Cost per New Service Population $576.59
Sources: City of San Luis Obispo; and Economic & Planning Systems, Inc.
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7. FIRE IMPACT FEE
This Chapter establishes the maximum fire fees under the Mitigation Fee Act that could be
required of new development in the City of San Luis Obispo. The City of San Luis Obispo’s Fire
department is a full-service fire department with six functional areas, including fire
administration, emergency response, prevention and education, training, technical services, and
disaster preparedness.
Mitigation Fee Act Nexus Findings
Nexus findings are provided below addressing: 1) the purpose of the fee; 2) the specific use of
fee revenue; 3) the relationship between the facility and the type of development; 4) the
relationship between the need for the facility and the type of development; and 5) the
relationship between the amount of the fee and the proportionality of cost specifically
attributable to development. The technical information and calculations provided below support
these nexus findings/requirements.
Purpose
The fee will help ensure there are sufficient fire facilities, equipment and vehicles to serve new
development.
Use of Fee
Fee revenues will be used to renovate Fire Stations 1, 2, 3, and 4 and construct Fire Station 5
and replace the fire vehicles and equipment needed to serve the City through General Plan
buildout.
Relationship
New development in the City will increase demand for fire services thereby contributing to the
need for fire facilities, equipment, and vehicles. Fee revenues will be used to ensure that the
City’s Fire Department can service new growth at the City’s current level of service.
Need
Each new residential and non-residential development project will add to the incremental
demand/need for fire facilities and vehicles. As a result, new facilities, improvements to existing
facilities, as well as new and replacement equipment and vehicles that are needed to maintain
existing service standards are required.
Proportionality
Renovation/construction of the fire stations and the purchase of replacement fire vehicles will
serve both the existing service population and the new service population as the City grows. As a
result, the allocation of the fire improvement costs is tied to the proportional demand
attributable to new growth.
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Capital Improvements and Cost Estimates
The City of San Luis Obispo has identified a number of fire service facility improvements required
to meet service demands and serve existing and future development in the City through buildout
of the General Plan. Table 28 and Table 29 presents the projected the needs for fire facilities,
equipment, and vehicles.
Fire Station Improvements
In particular, staff identified the remodeling of Fire Station 1, 2, 3 and 4, and new construction of
Fire Station 5. The Fire Service Master Plan and the 2009 Citygate Report details that Fire
Station 1, built over fifty years ago by the Southern California Gas Company, lacks the depth,
width and height to accommodate the repair and maintenance of newer heavy duty fire
apparatus. Fire Stations 2 and 3 require more living and dorm space, totaling a cost of $7.5
million. Fire Station 4 requires remodeling due to its lack of adequate space for storage and
other operational needs. Fire Station 5 is a new construction aimed at serving the City’s southern
growth area. In total, the cost of remodeling and construction for the five stations is
approximately $14.4 million.
Table 28 Fire Station Improvements and Estimated Costs
Purchases of Replacement Fire Vehicles
The Fire Department also plans to purchase approximately $5.6 million in replacement fire
service vehicles and personal protective equipment to serve the City as a whole, shown in
Table 29.
Fire Station 1 Fire Apparatus Repair Facility (Remodel)
Fire Station 2 and 3
Fire Station 4 Remodel of Dorm and
Construction of Multi- Purpose Building (Remodel)
Fire Station 5 (New Construction)
Fire Pumper
Total
Sources: City of San Luis Obispo; Fire Service Master Plan Update for the City of San Luis Obispo
Fire Department 2009 and 2016; and Economic & Planning Systems, Inc.
Item
$14,372,037
Capital Cost
$550,000
$7,500,000
$400,000
$5,322,037
$600,000
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Total Fire Costs Allocated to New Growth
Table 30 summarizes the total costs, including renovation and construction of Fire Stations 1 to
5, and replacement costs associated with fire vehicles and equipment. Fire improvements and
vehicle/equipment replacements to serve the City through General Plan buildout is approximately
$20 million.
Table 30 Fire Improvement/Vehicle Replacement Costs
Cost Allocation
Because the remodeling of Fire Station 1, 2, 3, and 4 will benefit both existing and new
development, the cost of renovations is allocated to new development on the basis of service
population growth relative to future service population. Although Fire Station #5 will primarily
serve the new development of the City’s South area, it also will affect station service boundaries
and increase the service capacity of the fire department overall, resulting in faster response
times Citywide. Based on the professional judgment of City staff, it is assumed that the cost of
these facility improvements is also allocated to new development on the basis of service
population growth relative to future service population.
In addition, fire vehicle and equipment costs were determined based on a replacement schedule
for the entire City. The allocation of fair share costs to new growth is based on the ratio between
existing service population and new service population.
Table 31 summarizes the costs allocated to new development for fire service facilities to be
constructed and associated equipment. The total costs allocated to new development for fire
services are approximately $3.5 million of the total Citywide costs of $20.0 million.
Item Total
Fire Station Improvements $14,372,037
Fire Vehicles $5,640,022
Total $20,012,059
Sources: 2035 Land Use & Circulation Update: LUCE Fiscal Impact Analysis and Public Financing
Plan; City of San Luis Obispo; and Economic & Planning Systems, Inc.
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Table 31 Fire Costs and Cost Allocation
Fee Calculation
To calculate the fire fee, the fair share cost allocated to new development of $3.5 million is
divided by the future growth of 15,500 to determine the average cost per new service
population, resulting in an average cost per service population of $226.67. This average cost per
service population is used to derive the general government impact fee based on relative
demand from residents and employees for each land use, as shown in Table 32.
Item Total Existing New Growth
Service Population 88,286 72,770 15,516
Allocation 100.0%82.4%17.6%
Improvement/ Vehicle Costs
Fire Station Improvements $14,372,037 $11,846,222 $2,525,815
Fire Vehicles $5,640,022 $4,648,816 $991,206
Total $20,012,059 $16,495,039 $3,517,021
New Growth Improvement Costs $3,517,021
New Service Population 15,516
Average Cost per New Service
Population $226.67
Sources: 2035 Land Use & Circulation Update: LUCE Fiscal Impact Analysis and Public Financing
Plan; City of San Luis Obispo; and Economic & Planning Systems, Inc.
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8. IMPLEMENTATION AND ADMINISTRATION OF CFF
The updated CFF and corresponding fee schedule will need to be adopted by City Resolution as
enabled by the City’s Fee Ordinance. The existing Ordinance allows the City Council to adopt, by
Resolution, a fee schedule consistent with supporting technical analysis and findings provided in
this Report. The Resolution approach to setting the fee allows periodic adjustments of the fee
amount that may be necessary over time, without amending the enabling Ordinance. It is
anticipated that the City will update the existing CFF Ordinance as part of this study process.
This updated ordinance addresses the primary implementation and administrative issues and
procedures associated with the CFF. A brief summary of the key implementation and
administrative elements is provided below.
Fee Collection and Amount
Applicable Land Uses
All new development that occurs within the City of San Luis Obispo, except as specifically
exempted by the CFF Ordinance, shall pay the CFF based on requirements of the subarea in
which the new development is located. While the maximum fee amount will be determined by
the Mitigation Fee Act Study, the City may elect to charge less for a variety of reasons and under
certain circumstances, as described in the Ordinance. In any case, the applicable fees will be
published in a Fee Schedule made available by the City and updated periodically. The amount
will vary by land use, as shown in Table 1.
It is possible that certain projects may not fit neatly into the categories defined in Table 5. In
cases were such ambiguity exists, the City Community Development Director will need to make a
determination as to the applicable fees. The Fee Ordinance articulates guidelines for resolving
discrepancies and/or disputes.
Fee Escalation
The City Fee Ordinance allows for an automatic adjustment of the CFF to keep pace with
inflationary increases in construction costs. This allows the fee level to keep pace with inflation
without requiring an annual approval process. This adjustment is based on the Construction Cost
Index (CCI) published by the Engineering News Record (ENR), a source widely used in the
construction industry, and by many jurisdictions as a basis for making annual inflation
adjustments to their development impact fees. ENR’s CCI has been published consistently every
month since 1967. As such ENR is one of the most reliable and consistent indices that track
trends in construction costs.
Timing and Manner of Payment
The City CFF Ordinance addresses issues related to the timing and manner of payment for the
CFF including the potential for fee deferrals, payment plans, credits and reimbursements,
exemptions, and related adjustments.
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Annual Review, Accounting, and Updates
Annual review
This Report and the technical information it contains should be maintained and reviewed
periodically by the City as necessary to ensure Impact Fee accuracy and to enable the adequate
programming of funding sources. To the extent that improvement requirements, costs, or
development potential changes over time, the Fee Program will need to be updated. Specifically,
AB 1600 (at Gov. Code §§ 66001(c), 66006(b)(1)) stipulates that each local agency that requires
payment of a fee make specific information available to the public annually within 180 days of
the last day of the fiscal year. This information includes the following:
A description of the type of fee in the account
The amount of the fee
The beginning and ending balance of the fund
The amount of fees collected and interest earned
Identification of the improvements constructed
The total cost of the improvements constructed
The fees expended to construct the improvement
The percent of total costs funded by the fee
If sufficient fees have been collected to fund the construction of an improvement, the agency
must specify the approximate date for construction of that improvement. Because of the
dynamic nature of growth and infrastructure requirements, the City should monitor development
activity, the need for infrastructure improvements, and the adequacy of the fee revenues and
other available funding. Formal annual review of the Fee Program should occur, at which time
adjustments should be made. Costs associated with this monitoring and updating effort are
included in the Impact Fee.
Surplus Funds
AB 1600 also requires that if any portion of a fee remains unexpended or uncommitted in an
account for five years or more after deposit of the fee, the City Council shall make findings once
each year: (1) to identify the purpose to which the fee is to be put, (2) to demonstrate a
reasonable relationship between the fee and the purpose for which it was charged, (3) to identify
all sources and amounts of funding anticipated to complete financing of incomplete
improvements, and (4) to designate the approximate dates on which the funding identified in (3)
is expected to be deposited into the appropriate fund.
If adequate funding has been collected for a certain improvement, an approximate date must be
specified as to when construction on the improvement will begin. If the findings show no need
for the unspent funds, or if the conditions discussed above are not met, and the administrative
costs of the refund do not exceed the refund itself, the local agency that has collected the funds
must refund them.
Internal Loaning of Funds
Loans between the Capital Facilities Fee Funds may be used from time to time to facilitate the
construction of CFF facilities and assure adequate cash flow. Any such loan shall be made in
accordance with applicable law, as interpreted by the City Attorney of the City of San Luis
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Obispo, and all funds shall be placed in separate accounts on either a facility or geographic basis.
The additional following requirements are also placed on loans between CFF funds:
1. Funds may be transferred between accounts to expedite the construction of critical
projects/facilities.
2. A mechanism to repay accounts shall be established.
3. Interest charged on each loan shall be based upon the Local Agency Investment Fund rate in
effect at the time of the loan and shall be deposited into the account providing the loan.
4. Inter-fund loan repayments shall take precedence over reimbursements to developers.
Five-Year Update
Fees will be collected from new development within the City immediately; however, use of these
funds may need to wait until a sufficient fund balance can be accrued. Per Government Code
Section 66006, the City is required to deposit, invest, account for, and expend the fees in a
prescribed manner. The fifth fiscal year following the first deposit into the Fee account or fund,
and every five years thereafter, the City is required to make all of the following findings with
respect to that portion of the account or fund remaining unexpended:
Identify the purpose for which the fee is to be put;
Demonstrate a reasonable relationship between the fee and the purpose for which it is
charged;
Identify all sources and amounts of funding anticipated to complete financing in incomplete
improvements; and
Designate the approximate dates on that the funding referred to in the above paragraph is
expected to be deposited in the appropriate account or fund.
Once sufficient funds have been collected to complete the specified projects, the City must
commence construction within 180 days. If they fail to do this, the City is required to refund the
unexpended portion of the fee and any accrued interest to the then current owner.
Securing Supplemental Funding
The Impact Fee is not appropriate for funding the full amount of all capital costs identified in this
Fee Study. As a result, the City will have to identify funding and pay for improvements related
to existing developments and improvements not funded by the Fee Program or any other
established funding source. Examples of such sources include the following:
General Fund Revenues. In any given year, the City could allocate a portion of its General
Fund revenues for discretionary expenditures. Depending on the revenues generated relative
to costs and City priorities, the City may allocate General Fund revenues to fund capital
facilities costs not covered by the Fee Program or other funding sources.
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Assessments and Special Taxes. The City could fund a portion of capital facilities costs
using assessments and special taxes. For example, the establishment of a Mello-Roos
Community Facilities District would allow the City to levy a special tax to pay debt service on
bonds sold to fund construction of capital facilities or to directly fund capital facilities. The
City could also seek voter approval of a special tax through ballot initiative to provide funding
for a range of capital improvements.
Regional, State or Federal Funds. The City might seek and obtain grant of matching
funds from Regional, State and Federal sources to help offset the costs of required capital
facilities and improvements. As part of its funding effort, the City should research and
monitor these outside revenue sources and apply for funds as appropriate.
Other Grants and Contributions. A variety of grants or contributions from private donors
could help fund a number of capital facilities. For example, private foundations and/or
charity organizations may provide money for certain park and recreation or cultural facilities.
As part of the adoption of the fee, the City is likely to adopt a finding that it will obtain and
allocate funding from various other sources for the fair share of the costs of improvements
identified in this Report that are not funded by the Fee Program as well any additional funding
required to “backfill” any policy-based fee reductions. Any supplemental funding identified will
be incorporated into the CFF as part of the next five-year update.
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APPENDIX A:
Transportation Impact Fee
Improvement List and Cost Allocation
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Appendix ATransportation Improvement List, Cost Estimates, and AllocationsSan Luis Obispo Capital Facilities Fee Nexus Analysis; EPS #161187DescriptionEstimate InformationRegional Existing New Regional Existing NewCITYWIDE BASEIntersection ImprovementsProject #3 Broad & South-Santa Barbara Intersection ImprovementsIntersection Improvements Widen southbound approach to provide a 100' right-turn lane; OR Improve the westbound approach to include two left-turn lanes and a shared through/right turn lane.Wallace estimates Project No. 20 $680,000 total with $550k const, $130k Capital Support.$680,000$680,000 0.0% 0.0% 100.0%$0$0 $680,000Project #4 Orcutt & Tank Farm Intersection ImprovementsIntersection Improvements Near-Term: Minor realignment of the Tank Farm Road/Orcutt Road intersection to correct the existing skewed alignment and addition of a 200' southbound right-turn lane.Long-Term: Install Roundabout.Roundabout Cost based on similar Roundabout designs and estimates at California @ Taft and Orcutt @ Righetti.$1,700,000$1,700,000 0.0% 0.0% 100.0%$0$0 $1,700,000Project #5 Broad & Tank Farm Intersection ImprovementsIntersection Improvements Establish time-of-day timing plans.Add SB dual left-turn lane, NB dedicated right-turn lane and WB dedicated right-turn lane. Augment bicycle facilities and improve transit headways on Broad Street.Wallace estimates Project No. 33 $1,490,000. $1,500,000$1,500,000 15.0% 0.0% 85.0% $225,000$0 $1,275,000Project #6 Johnson & Orcutt Intersection Improvements Intersection Improvements Install roundabout.Wallace estimates Project No. 18 of $2,000,000 total with $2,000,000 const no ROW.$2,000,000$2,000,000 25.0% 0.0% 75.0% $500,000$0 $1,500,000Project #7 Higuera & Tank Farm Intersection ImprovementsIntersection Improvements Add NB right-turn lane, WB dual right-turn lanes, dual SB lefts,& median on Tank Farm between Higuera and Long.Wallace estimates Project No. 35 of $1,650,000 total with $1,650,000 const no ROW. Plus $350,000 for SB Dual Lefts.$2,000,000$2,000,000 0.0% 0.0% 100.0%$0$0 $2,000,000Project #8 S. Broad Street IntersectionIntersection Improvements Control Upgrades at 3 intersections.From S. Broad Street Corridor Plan with adjustments (cost based upon Roundabout Control, Medians, and ROW at $2.25 million each for two Intersections and $500,000 for Bicycle Pedestrian Hybrid Crossing Signal & Median and curb extensions at a third.$5,000,000$5,000,000 20.0% 0.0% 80.0% $1,000,000$0 $4,000,000Project #9 Misc. Intersection Control Upgrades Intersection Improvements 15 Intersections Control upgrades as identified in the GP Circ. Element and EIR.15 Intersections at average of $1.0 million each that proposes mixture of signals, roundabout control, ada/pedestrian enhancements to meet LOS requirements.$15,000,000$15,000,000 0.0% 0.0% 100.0%$0$0 $15,000,000Project #10 Orcutt Rd/UPRR Grade Separation Intersection Improvements Grade Separation of Orcutt Road and Laurel Lane at the Union Pacific Railroad including the relocation of Bullock Lane and potential relocation of the Bullock Bridge. Wallace estimates Project No. 41 of $20,000,000 does not include ROW - one property still needs to be acquired. Local Match only that could be used for prop acquis if necessary.$20,000,000$16,000,000 $4,000,000 10.0% 0.0% 90.0% $400,000$0 $3,600,000Project #11 Prado Rd/Higuera & Prado Intersection Improvements - Final Phase Dual LT's and NB RTStreet Widening and Intersection ImprovementsIntersection Improvements: Add second westbound through lane. Add second northbound left-turn lane. Add second eastbound through lane.Project cost estimated on Project #15 (see below) that are 25% construction plans - forecast for future conditions.$2,500,000$2,500,0000.0% 0.0% 100.0%$0$0$2,500,000Subtotal$50,380,000$0$16,000,000$34,380,000$2,125,000$0$32,255,000Street Widening ImprovementsProject #12 Higuera Widening: High St to Marsh St Street WideningAcquire property and widen to allow four travel lanes, center turn lane, bike lanes, etc. & implement Downtown Plan concepts (See Mid-Higuera Plan).Wallace estimates Project No. 44 of $2,150,000 does not include ROW - $1.760M in Const, $390k in const support.$2,150,000$2,150,000 0.0% 75.3% 24.7%$0 $1,618,790 $531,210Project #13 Higuera Widening: Madonna Rd to City LimitsStreet WideningWiden Higuera to 4 lanes, with a center turn lane, Class II bikeways from Madonna to southern City Limits.Wallace estimates Project No. 27 of $5,370,000 does not include ROW - $4.4M in Const, $970k in const support.$5,400,000$5,400,000 55.0% 0.0% 45.0% $2,970,000$0 $2,430,000Project #14 Tank Farm Road WideningStreet WideningWiden Tank Farm Road as a Parkway Arterial with 2 lanes in each direction, a center turn lane/landscaped median, Class II bike lanes, sidewalks and Class I bike lanes from Horizon to Santa Fe & Roundabout at Santa Fe.Combination of Wallace estimates Project No. 51 of $23,380,000 does not include ROW - $15.3M in Const, $3.370k in const support. Adds to that the roundabout and misc work at Sante Fe and Horizon Lane intersections. $3,000,000 in direct dev contribution in for adjacent development to pay for c/g/s and bike lanes along frontage.$22,000,000$3,000,000$19,000,000 30.0% 0.0% 70.0% $5,700,000$0 $13,300,000Project #15 Prado Rd Bridge Widening: West of Higuera St and Higuera & Prado Intersection Improvements (NB Dual LT)Street Widening and Intersection ImprovementsIntersection Improvements: Add second westbound through lane. Add second northbound left-turn lane. Add second eastbound through lane.See Wallace project No. 40 & Preliminary Cost Estimates for Bridge. Assumes HBR program will pick up to 60% (modified to excluse non eligible improvements).$13,000,000$7,800,000 $5,200,000 0.0% 0.0% 100.0%$0$0 $5,200,000Project #15F Prado Rd. Bridge W of HigueraFinancing$3,821,495$3,821,4950.0% 0.0% 100.0% $0$0$3,821,495Subtotal$46,371,495$3,000,000$7,800,000$35,571,495$8,670,000$1,618,790$25,282,706Street Extension ImprovementsProject #16a Santa Fe Road Extension North of Tank FarmStreet ExtensionRealign and Extend Santa Fe Road as a Commercial Collector from Tank Farm to Prado Road including construction of a new bridge at Acacia Creek. (See AASP) Chevron responsible for 66% ($1,620,000) to reflect local access needs. New cost estimate reduced by this amount.See Wallace project No. 52. Roundabout cost in Wallace estimate moved to TankFarm Road Widening Project #14.$1,080,000$1,080,000 60.0% 0.0% 40.0% $648,000$0 $432,000Project #16b Santa Fe Road Extension South of Tank FarmStreet ExtensionRealign and Extend Santa Fe Road as a Commercial Collector from Hoover Avenue to Tank Farm including construction of a new bridge at Acacia Creek. Chevron responsible for 50% to reflect local access needs.See Wallace project No. 52. Roundabout cost in Wallace estimate moved to TankFarm Road Widening Project #14.$2,500,000$2,500,000 60.0% 0.0% 40.0% $1,500,000$0 $1,000,000Project #17 Horizon Lane Extension South of Tank Farm Street ExtensionConstruct new commercial collector Tank Farm to Buckley with roundabout control at Tank farm.1,300 LF at $775 per LF plus $2m for Roundabout. $3,000,000$3,000,000 10.0% 0.0% 90.0% $300,000$0 $2,700,000Grant or Other SourcesPFFP Cost EstimateAllocation - CitywideAllocation - CitywideProject Number NameType (e.g., Geographic Area of Benefit)New Cost EstimateDirect Development ContributionPacket Pg 31511
Appendix ATransportation Improvement List, Cost Estimates, and AllocationsSan Luis Obispo Capital Facilities Fee Nexus Analysis; EPS #161187DescriptionEstimate InformationRegional Existing New Regional Existing NewGrant or Other SourcesPFFP Cost EstimateAllocation - CitywideAllocation - CitywideProject Number NameType (e.g., Geographic Area of Benefit)New Cost EstimateDirect Development ContributionProject #18 Bishop St Extension to Roundhouse Street ExtensionExtend Bishop Street west over R.R. tracks. The City shall conduct a detailed subarea traffic analysis to determine if secondary measures can be made to allow for elimination of the Bishop Street Extension and protection of neighborhood traffic levels; and recommend improvements, if any.Wallace estimates Project No. 43 of $13,200,000 does not include ROW - All construction cost.$13,200,000$13,200,000 5.0% 71.5% 23.5% $660,000 $9,441,684 $3,098,316Project #19 Prado Rd Extension South Higuera to Broad Street, including Broad Street & Prado Extension Intersection ImprovementsStreet Extension and Intersection ImprovementsWiden and extend Prado Rd. as an Highway/Regional Route Arterial with 2 lanes in each direction, a center turn lane/landscaped median, Class II bike lanes, sidewalks and Class I bike lanes (where feasible) from US 101 to Broad Street. ROW Limitations east of Higuera outside of the MASP area may limit the City’s ability to install Class I facilities. (See MASP) Construct a second northbound left-turn lane at Broad and Prado.Assumes new Prado Extension cost of $25,936,200 based upon Serra Meadows actuals. Adjacent development funds c/g/s, bike lanes, center turn lane/median and one through lane. AB 1600 funds one lane in each direction.$26,526,200$16,509,720$10,016,480 20.0% 0.0% 80.0% $2,003,296$0 $8,013,184Project #19F Prado Rd Extension South Higuera to Broad Street, including Broad Street & Prado Extension Intersection ImprovementsFinancing$7,361,141$7,361,1410.0% 0.0% 100.0%$0$0$7,361,141Subtotal$53,667,341$16,509,720$0$37,157,621$5,111,296$9,441,684$22,604,641Pedestrian/ Bicycle ImprovementsProject #20 Bob Jones TrailPedestrian/Bike Projects Class I Trail from Marsh Street to Prado paralleling SLO Creek / Higuera Street, Calle Joaquin to Oceanaire behind Target & Auto Dealers Along Creek, and Los Osos Valley Road to S. Higuera along creek.14,000 LF Estimated at $785 per LF including Design, ROW, Permitting, Environmental Review / Mitigation, Retaining Walls & Bridges. Based on Final Bob Jones Prado to LOVR costs.$11,000,000$11,000,000 0.0% 75.3% 24.7%$0 $8,282,179 $2,717,821Project #21 Railroad Safety Trail Pedestrian/Bike Projects Completing gaps in Class I Trail paralleling UPRR right of way, with connections and bridges, from CalPoly to Southern City Limit.15,300 LF Estimated at $785 per LF including Design, ROW, Permitting, Environmental Review / Mitigation, Retaining Walls & Bridges.. Based on Final Bob Jones Prado to LOVR costs.$12,000,000$12,000,000 0.0% 75.3% 24.7%$0 $9,035,104 $2,964,896Project #22 Broad Street Bicycle Boulevard / Anholm Bikeway Including Broad St. Ramp Closure & Bike/Ped OverpassPedestrian/Bike Projects Mixture of bikeway and pedestrian enhancements connecting downtown area to schools north of Foothill. Includes CalTrans project development work for closure of the SB US 101 Ramps, grade separation of US 101 and misc mitigation at US 101/HWY1.$3,000,000 for Anholm Bikeway per Page 36 of adopted Anholm Bikeway Plan. $2,000,000 For CalTrans PSR, PA&ED, and PS&E of Broad Street Ramp Closure.$5,000,000$5,000,000 0.0% 75.3% 24.7%$0 $3,764,627 $1,235,373Project #23 Fixilini & Flora Bike BoulevardPedestrian/Bike Projects Connects neighborhoods north of Johnson Avenue along Flora Avenue from Lizzie to Southwood (also along Sequoia to County parcels) including gap closure between Bishop and Fixlini. Ref. Bike Plan A-61 - 65.950 LF Class I @ $325 per LF., $125k for traffic diverter islands and $15k for miscellaneous traffic calming.$450,000$450,000 0.0% 75.3% 24.7%$0 $338,816 $111,184Project #24 Ella Street Bike BoulevardPedestrian/Bike Projects Connects neighborhoods north of Johnson Avenue along Ella and other streets from the Jennifer Street Bridge to Flora BB. Ref. Bike Plan A-66,67.2000 LF @ $25 per LF.$50,000$50,000 0.0% 75.3% 24.7%$0 $37,646 $12,354Project #25 Jennifer Street Bridge Morro St. Expansion Pedestrian/Bike Projects Provides direct connection from Jennifer Street Bridge to Morro Street Bike Boulevard at Santa Rosa with new bridge ramp and ADA improvements. Estimated based on Original Jennifer Street Bridge Construction with CPI.$500,000$500,000 0.0% 75.3% 24.7%$0 $376,463 $123,537Project #26 Boyson Ped Bike Separated Xing & Class I Highland-Santa Rosa BypassPedestrian/Bike Projects Traffic Safety project to separate ped/bike crossings at Boyson/HWY 1 (by under/overpass) and connecting to N. Chorro. Bike Plan A-27, A-28.Estimate provided in Hwy 1 Major Investment Study. $3,500,000$3,500,000 0.0% 75.3% 24.7%$0 $2,635,239 $864,761Project #27 Class I Path Broad to Marsh (W side of Hwy 101)Pedestrian/Bike Projects Class I path connecting Broad Street Bike Boulevard to Marsh Street and the Cerro San Luis Trail head/Madonna Bike Path and beyond. Bike Plan A-36.4,000 LF Estimated at $475 per LF including Design, ROW, Environmental Review / Mitigation, & Retaining Walls. Based on Final Bob Jones Prado to LOVR Costs.$2,000,000$2,000,000 0.0% 75.3% 24.7%$0 $1,505,851 $494,149Project #28 Los Osos Valley Road Interchange Class I UnderpassPedestrian/Bike Projects Grade separation of Bob Jones Trail/LOVR bike and pedestrians using one of the culverts of the SLO Creek bridge or via Caltrans ROW. Bike Plan A-90.Estimates based on Early LOVR Interchange design which initially included this connection but was later removed.$1,000,000$1,000,000 0.0% 40.0% 60.0%$0 $400,000 $600,000Project #29 Madonna Class I (Hwy 101 to Oceanaire)Class I or IV bike facility on North side of Madonna connecting Madonna Bike Path to Laguna Lake Park then to Oceanaire. Bike Plan A-126, A-127.1,000 LF of Widening Sidewalk to Class I Facility Estimated $850 per LF per Laurel & Orcutt Class I Final Cost. In addition to 2,000 LF of Class I Estimated at $325 per LF construction only.$1,500,000$650,000$850,000 0.0% 40.0% 60.0%$0 $340,000 $510,000Project #30 Broad St. Class I (Rockview to Damon Garcia Park)Pedestrian/Bike Projects Class 1 Path on west side of Broad Street connecting Rockview to MASP and Damon Garcia park. See MASP and Bike Plan A-99 to A-101.1700 LF Estimated at $475 per LF including Design, ROW, Mitigation, & Culverts / Retaining Walls.$800,000$800,000 0.0% 40.0% 60.0%$0 $320,000 $480,000Project #31 Downtown Bikeways & Bike BlvdsPedestrian/Bike Projects Misc. bicycle and pedestrian enhancements as contained in the Downtown Concept Plan (2017).Signal Modifications & Corner Reconstruction at 9 Intersections estimated at $150,000 each. 3500 LF of Class IV Bikeways estimated at $185 per LF. Including Design & Construction.$2,000,000$2,000,000 0.0% 75.3% 24.7%$0 $1,505,851 $494,149Project #32 Cerro Romaulda Class I (Tassajara to Chorro)Pedestrian/Bike Projects Connects N. Choro to Ferinni and Pacheco School to Cal Poly. Bike Plan A-26.525 LF Estimated at $185 per LF including Design & Construction. $650,000 in ROW.$750,000$750,000 0.0% 75.3% 24.7%$0 $564,694 $185,306Project #33 Vachell Lane Class II LanesPedestrian/Bike Projects Constructs Class II bicycle lanes from S. Higuera to Buckley Road. Does not include ROW costs. Bike Plan A-113, Avila Ranch SP.Estimate Provided By Avila Ranch.$650,000$650,000 0.0% 40.0% 60.0%$0 $260,000 $390,000Project #34 Tank Farm Creek Class I (Buckley to Tank FarmPedestrian/Bike Projects Constructs Class 1 trail from Santa Fe Road at Tank Farm across the Chevron property through the Avila Ranch project and connects to Vachell at Buckley Road. Bike Plan A-111, AASP, Avila Ranch SP.Estimate Provided By Avila Ranch.$1,800,000$1,800,000 0.0% 0.0% 100.0%$0$0 $1,800,000Packet Pg 31611
Appendix ATransportation Improvement List, Cost Estimates, and AllocationsSan Luis Obispo Capital Facilities Fee Nexus Analysis; EPS #161187DescriptionEstimate InformationRegional Existing New Regional Existing NewGrant or Other SourcesPFFP Cost EstimateAllocation - CitywideAllocation - CitywideProject Number NameType (e.g., Geographic Area of Benefit)New Cost EstimateDirect Development ContributionProject #35 Buckley Road Extension Class 1Pedestrian/Bike Projects Constructs Class 1 trail Vachell at Buckley Road to the Bob Jones Trail at S. Higuera and the Octagonal Barn property. Bike Plan A-112, AASP, Avila Ranch. Estimate Provided By Avila Ranch.$800,000$800,000 0.0% 40.0% 60.0%$0 $320,000 $480,000Project #36 Tank Farm & UPRR Bike BridgePedestrian/Bike Projects Connects RRST across Tank Farm Road to City limits. Funds citywide component of project, OASP funds remaining. Bike Plan A-58, OASP.See Wallace Eng. Estimate. 11-15-2016 Council Report for OASP PFFP.$1,008,000$252,000$756,000 0.0% 0.0% 100.0%$0$0 $756,000Project #37 Laguna Lake BikewaysPedestrian/Bike Projects Connects Laguna/LOVR area to Foothill area and Cal Poly via a series of Class I trail connections. Bike Plan A-122 to A-125.11,000 LF at $325 per LF construction only.$3,500,000$3,500,000 0.0% 40.0% 60.0%$0 $1,400,000 $2,100,000Project #38 Misc. Class II Bike LanesPedestrian/Bike Projects Miscellaneous Class II improvements as identified in the City Bicycle Plan.80,000 LF Estimated at $25 per LF.$2,000,000$2,000,000 0.0% 75.3% 24.7%$0 $1,505,851 $494,149Project #39 Misc. Class III Bike Signs & Markings Pedestrian/Bike Projects Miscellaneous Class III improvements as identified in the City Bicycle Plan.50,000 LF Estimated at $5 per LF.$250,000$250,000 0.0% 75.3% 24.7%$0 $188,231 $61,769Project #40 Misc. Ped/Bike X-Ing ControlsPedestrian/Bike Projects Miscellaneous Traffic Control upgrades at Ped and Bike crossings needed in future (Signal or other control).10 locations estimated at $150,000 each.$1,500,000$1,500,000 0.0% 40.0% 60.0%$0 $600,000 $900,000Project #41 Class I Overpass Industrial & UPRR Pedestrian/Bike Projects Connects growth areas of OASP, MASP and Broad Street industrial areas by installing a grade separation under/over the UPRR train tracks at Industrial Way. Funds citywide component of project, OASP funds remaining. Bike Plan A-57, OASP.See Wallace Eng. Estimate. 11-15-2016 Council Report for OASP PFFP.$2,108,000$1,054,000$1,054,0000.0% 0.0% 100.0%$0$0$1,054,000Subtotal$54,166,000$1,956,000$0$52,210,000$0$33,380,552$18,829,448Transit ImprovementsProject #42 Fleet Expansion: 4 BusesTransit ProjectsPer SRTP future forecast of vehicles needed to serve expansion areas. Recovers 25% local match requirement only.$1,500,000$1,500,000 0.0% 75.3% 24.7%$0 $1,129,388 $370,612Project #43 Transit CenterTransit ProjectsConstructs Transit Center in Downtown providing enhanced mobility and access for new development and businesses in Downtown, includes transfer locations for RTA and other regional providers. Recovers 25% local match requirement only.Estimate provided by SLOCOG. In excess of $12m. PFFP Cost capped at $5m pursuant to current TIFF program.$5,000,000$5,000,0000.0% 75.3% 24.7%$0$3,764,627$1,235,373Subtotal$6,500,000$0$0$6,500,000$0$4,894,015$1,605,985OtherProject #44 Traffic Volume Count Program and Traffic ModelMisc.Conducts biannual traffic counts and traffic model updates for use in development Traffic Impact Studies. Counts estimated @ $40K biannually for 20 years, Traffic Model update every 5 years at $100K ea.$900,000$900,000 0.0% 0.0% 100.0%$0$0 $900,000Project #45 S. Broad Street MediansCorridor Improvements Medians from South to Orcutt Per S. Broad Street Corridor Plan. 200 LF Estimated at $1,000 per LF.$2,000,000$2,000,00020.0% 0.0% 80.0% $400,000$0$1,600,000Subtotal$2,900,000$0$0$2,900,000$400,000$0$2,500,000CITYWIDE BASE SUBTOTAL$213,984,836$21,465,720$23,800,000$168,719,116$16,306,296$49,335,040$103,077,781PRADO ROAD INTERCHANGE ADD-ONInterchange ImprovementsProject #2 Hwy 101/Prado Rd InterchangeInterchange Improvements Build full interchange at 101. Development of San Luis Ranch (Dalidio) Area shall include a circulation analysis of alternatives to a full access interchange, an analysis of compact interchange designs that minimize open space / ag. land impacts, and an analysis of potential incremental phasing of the interchange elements.Estimate is based on median range of the preliminary Project Study Report (PSR) estimates.$35,000,000$9,800,000 $6,000,000 as part of regional funding$25,200,000 30.0% 0.0% 70.0% $7,560,000$0 $17,640,000Project #2F Hwy 101/Prado Rd InterchangeFinancing $11,023,545 $11,023,545 0.0% 0.0% 100.0%$0$0 $11,023,545PRADO ROAD INTERCHANGE ADD-ON BASE SUBTOTAL$46,023,545$9,800,000 $36,223,545$7,560,000$0$28,663,545LOVR INTERCHANGE ADD-ONProject #1 Hwy 101/LOVR Interchange Improvements Interchange Improvements Estimate is based on actual final cost.$7,134,172 $7,134,172 0.0% 0.0% 100.0%$0$0 $7,134,172Project #1F Hwy 101/LOVR Interchange Improvements Financing $4,502,661 $4,502,661 0.0% 0.0% 100.0%$0$0 $4,502,661LOVR INTERCHANGE ADD-ON BASE SUBTOTAL$11,636,833 $11,636,833$0$0$11,636,833TOTAL $271,645,214$31,265,720 $23,800,000 $216,579,494$23,866,296 $49,335,040 $143,378,158Sources: City of San Luis Obispo; Cambridge Systematics; Wallace Group; and Economic & Planning Systems, Inc.Packet Pg 31711
R ______
RESOLUTION NO. _____ (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING WATER AND WASTEWATER
DEVELOPMENT IMPACT FEES
WHEREAS, Chapter 4.20.140 of the City of San Luis Obispo Municipal Code established
water and wastewater development impact fees and provides for the setting of the fee amounts and
other matters by resolution of the Council; and
WHEREAS, the City Council has approved the Water Resource Recovery Facility
Facilities Plan including regulatory requirements and capacity improvements necessary to
accommodate growth under the City’s General Plan; and
WHEREAS, on February 10, 2004 the Council for the City of San Luis Obispo directed
staff to proceed with participating in the Nacimiento Pipeline Water Supply Project to provide
additional water supplies for new development and service reliability for existing customers; and
WHEREAS, on March 7, 2006 the Council approved the Water Treatment Plant Master
Plan improvements which provided additional treatment process and capacity to meet General
Plan build-out; and
WHEREAS, updated cost information for capital projects necessitate updated the fees to
address new development’s share of the cost for lift stations and other capital projects; and
WHEREAS, modification of rates and charges by public agencies is statutorily exempt
from the California Environmental Quality Act (CEQA) under Section 15273 of the Public
Resources Code because the change in fees in not intended to fund expansion of capital projects
not otherwise evaluated under CEQA. All Master Plans were evaluated for their respective impacts
to the environment and this action to adjust fees merely provides a mode equitable distribution of
costs associated with envisioned infrastructure; and
WHEREAS, an analysis of the required amendments to both the water and wastewater
development impact fees to support the City’s operations, maintenance and debt service in the
Nacimiento Pipeline Water Supply Project, the facility and system improvements identified in the
Water Resource Recovery Facility Facilities Plan, the Water Treatment Plant Master Plan, and
updated cost information for lift stations and other capital projects have been completed and
amended fees identified as included in the attached Exhibits A and B.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows/or that (whatever action is needed):
SECTION 1. Findings
a) The purpose of development impact fees is to protect the public health, safety, and
general welfare by providing adequate water supply, treatment, distribution and
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Resolution No. _____ (2018 Series) Page 2
wastewater collection and treatment facilities to satisfy the needs of new
development and to mitigate the impacts of new development on the City’s water
and wastewater facilities and improvements.
b) The development impact fees collected pursuant to this resolution shall be used
only to pay for facilities and improvements identified in the development impact
fee analysis and shall not be in lieu of any other fee or tax as may be required by
the Municipal Code.
c) There is a reasonable relationship between the types of development on which the
development impact fees are imposed and the use of the development impact fees
and the need for the facilities and improvements. All new development requires
adequate water supply, treatment and distribution as well as wastewater collection
and treatment facilities to protect the public health and safety.
d) As required by Government Code Section 66001 et seq., there is a reasonable
relationship between the amount of the development impact fee and the cost of the
facilities and improvements attributable to the developments on which the
development impact fees are imposed. The estimated costs of facilities and
improvements, including financing costs, to be paid for as shown in the 2017 Water
and Wastewater Capacity and Connection Fee Study prepared by HDR
Engineering, Inc. the findings and analysis of which are hereby incorporated by
reference, have been allocated to new development on the basis of dwelling unit
size and type (residential) or water meter size (non-residential).
SECTION 2. Cost Estimates
At any time that the actual or estimated costs of facilities identified in the development
impact fee analysis changes, the Finance Director shall review the development impact fee and
determine whether the change affects the amount of the development impact fees. If the
development impact fees are significantly affected, the Finance Director shall, within thirty (30)
days, recommend to the Council a revised fee for their consideration.
SECTION 3. Amount of Development Impact Fees
Effective July 1, 2018, water and wastewater development impact fees shall be in the
amounts set forth in Exhibits A and B attached hereto. Unless otherwise acted upon by the Council,
the amount of the development impact fees will automatically be adjusted on July 1 of each
subsequent year by the Municipal Cost Index for the prior year.
SECTION 4. Time of Payment
a) Development impact fees for any development project or portion thereof shall be
payable prior to issuance of building permits required for that development or later
as determined by the Community Development Director and shall be collected by
the Building Official. Under Government Code Section 66007(b), the City is
authorized to collect the development impact fee at the time of building permit
issuance or at a subsequent date because the development impact fees are for public
facilities and improvements for which an account has been established and funds
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appropriated, and for which the City has adopted a proposed construction schedule,
or the development impact fees are to reimburse the City for expenditures
previously made.
b) For any development project or portion thereof, development impact fees shall be
assed at the time of application and remain valid for as long as the application is
proceeding through valid processing as per the Uniform Administrative Code.
SECTION 5. Exemptions
a) Fire Protection. Upgrading existing water services and/or meters for the sole
purpose of providing new or improved fire protection facilities shall be exempt
from any development impact fee provided for in this resolution.
b) Landscape Irrigation. Any water services and/or meters installed solely for
landscape irrigation purposes for properties with existing water service shall be
exempt from any development impact fees provided for in this resolution. However,
if an increase in water demand is required, the Utilities Director shall impose a
water development impact fee.
SECTION 6. Separate Accounts.
The Finance Director shall deposit fees collected under this resolution in separate water
development impact fee and wastewater development impact fee accounts as required by
Government Code Section 66006. Within sixty (60) days of the close of each fiscal year, the
Finance Director shall make available to the public an accounting of the fund, and the City Council
shall review that information at its next regular public meeting.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
Acting City Clerk
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APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
Acting City Clerk
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EXHIBIT A
WATER DEVELOPMENT IMPACT FEES
Effective July 1, 2018
Equivalent
Dwelling Unit
(EDU)
Water Development
Impact Fee
Residential (by Unit Size)
Residential Unit (1,201 square feet or more) 1.0 $11,872
Residential Unit (801-1200 square feet or more) 0.8 $9,498
Residential Unit (451 to 800 square feet) 0.7 $8,310
Mobile Home 0.6 $7,123
Studio Unit (450 square feet or less) 0.3 $3,562
Non-Residential (by Meter Size)
¾” 1.0 $11,872
1” 1.7 $20,182
1.5” 3.4 $40,365
2” 5.4 $64,109
3” 10.7 $127,030
4” 16.7 $198,262
6” 33.4 $396,525
EXHIBIT B
WASTEWATER DEVELOPMENT IMPACT FEES
Effective July 1, 2018
Equivalent
Dwelling Unit
(EDU)
Wastewater
Development
Impact Fee
Residential (by Unit Size)
Residential Unit (1,201 square feet or more) 1.0 $10,721
Residential Unit (801-1200 square feet or more) 0.8 $8,577
Residential Unit (451 to 800 square feet) 0.7 $7,505
Mobile Home 0.6 $6,433
Studio Unit (450 square feet or less) 0.3 $3,216
Non-Residential (by Meter Size)
¾” 1.0 $10,721
1” 1.7 $18,226
1.5” 3.4 $36,451
2” 5.4 $57,893
3” 10.7 $114,715
4” 16.7 $179,041
6” 33.4 $358,081
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FEASIBILITY ANALYSIS
Residential and Non-Residential Prototypes
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RESIDENTIAL Pro totypes
(Outside of Expansion Areas and Specific Plan Areas)
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Single Family Prototype 3
Square Feet: 1,100
Price/Unit: $525,000
10% of Avg.
Sale Price
15% of Avg.
Sale Price
20% of Avg.
Sale Price
(Outside of Expansion Areas and Specific Plan Areas)
Key
Other fee obligations
include school district fees,
public art in-lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy”
affordable housing fee is
calculated at 5% of the
building permit valuation,
estimated at 50% of sales
price.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 1,,100 sq.ft unit.
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Single Family Prototype 3 (reflects transp. discount for smaller units)
Square Feet: 1,100
Price/Unit: $525,000
10% of Avg.
Sale Price
15% of Avg.
Sale Price
20% of Avg.
Sale Price
(Avila Ranch
Example)
Key?
Existing Wastewater cost
includes costs for the Tank
Farm catchment area.
The existing transportation fee
reflects the LOVR Base fee,
MASP Sub-area fee, MASP
Area Plan Prep fee.
Yellow outline is shown as
visual reminder of other
infrastructure costs outside of
the fee program that new
development is required to
pay. This amount is lower or
equal in the revised maximum
calculations, reflecting that
some of these infrastructure
costs are being incorporated
and formalized in the fee
program as part of this update.
LOVR Interchange cost reflects
the LOVR Sub-area fee.
Other fee obligations include
school district fees, public art
in-lieu fee, and the affordable
housing fee where applicable.
These fees are not part of this
current fee update.
Outside of the expansion area,
the “proxy” affordable housing
fee is calculated at 10% of the
building permit valuation,
estimated at 50% of sales price.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 1,100 sq.ft unit.
The existing parks fee is based
on the DA.
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Multifamily Prototype (reflects transp. discount for smaller units)
Square Feet/ Unit: 800
Price/Unit: $400,000
Key
5% of Avg.
Sale Price
10% of Avg.
Sale Price
15% of Avg.
Sale Price
(Outside of
Specific Plan Areas)
Other fee obligations
include school district
fees, public art in-lieu
fee, and the affordable
housing fee where
applicable. These fees
are not part of this
current fee update.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 800 sq.ft. unit.
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Non-RESIDENTIAL
Prototypes
(Outside of Specific Plan Areas)
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Office/Business Park Prototype (w/ 15% transp. discount)
Square Feet: 10,000
Price/Square Foot: $425
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
(Outside of
Specific Plan Areas)
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 10,000 sq.ft. building.
Other fee obligations
include school district fees,
public art in-lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
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Office/Service Prototype (w/ 15% transp. discount)
Square Feet: 10,000
Price/Square Foot: $300
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
(Outside of Specific Plan Areas)
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 10,000 sq.ft. building.
Other fee obligations
include school district fees,
public art in-lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
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Industrial Prototype (w/ 15% transp. discount)
Square Feet: 17,424
Price/Square Foot: $200
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
(Outside of Specific Plan Areas)
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 17,424 sq.ft. building.
Other fee obligations
include school district fees,
public art in-lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
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Retail Prototype (w/ 60% transportation discount)
Square Feet: 10,000
Price/Square Foot: $300
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
(Outside of Specific Plan Areas)
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 10,000 sq.ft. building.
Other fee obligations
include school district fees,
public art in-lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
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DRAFT FINAL REPORT
City of San Luis Obispo
Capacity and Connection Fees
for Water and Wastewater
September 2017
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hdrinc.com
500 108th Ave NE, Suite 1200, Bellevue, WA 98004
T 425-450-6200
September 26, 2017
Ms. Jennifer Metz
Utilities Projects Manager
Public Utilities
879 Morro Street
San Luis Obispo, CA 93401-2710
Subject: DRAFT FINAL - Development of the City’s Water and Wastewater Capacity and
Connection Fees
Dear Ms. Metz:
HDR Engineering, Inc. (HDR) was retained by the City of San Luis Obispo (City) to conduct a
study to develop cost-based water and wastewater capacity and connection fees (previously
referred to as development impact fees). Enclosed please find HDR’s draft final report for this
study. The conclusions and recommendations contained within this report should enable the
City to implement cost-based water and wastewater capacity and connection fees that meet
the City’s growth and financial policy objectives. The City has historically established cost-
based capacity and connection fees and this report is a continuation of those past practices.
This report has been prepared using “generally accepted” financial, rate setting, and
engineering principles. The City’s financial, budgeting and engineering data were the primary
sources for much of the data contained in this report. This report was developed with
significant participation and input by City management and staff.
HDR appreciates the opportunity to assist the City in this matter. We also would like to thank
you and your staff for assistance provided to us.
Very truly yours,
HDR Engineering, Inc.
Shawn Koorn
Associate Vice President
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Table of Contents i
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Abbreviations and Acronyms
Capacity and Connection Fee Definitions
Executive Summary
Introduction ............................................................................................................... 1
Capacity and Connection Fee Approach ..................................................................... 2
Water Capacity and Connection Fee .......................................................................... 2
Wastewater Capacity and Connection Fee ................................................................. 5
1 Introduction
1.1 Introduction ............................................................................................................. 10
1.2 Organization of Report............................................................................................. 10
1.3 Disclaimer ............................................................................................................... 10
2 Overview of Capacity and Connection Fees
2.1 Introduction ............................................................................................................. 11
2.2 Defining Capacity and Connection Fees ................................................................... 11
2.3 Economic Theory and Capacity and Connection Fees ............................................... 11
2.4 Capacity and Connection Fees Criteria ..................................................................... 11
2.5 Overview of the Capacity and Connection Fee Methodology ................................... 13
2.6 Summary ................................................................................................................ 16
3 Legal Considerations in Establishing Capacity and Connection Fees
3.1 Introduction ............................................................................................................. 17
3.2 Requirements under California Law ......................................................................... 17
3.3 Proposition 218 and 26 and Capacity and Connection Fees...................................... 18
3.4 Summary ................................................................................................................ 19
4 Determination of the City’s Water Capacity and Connection Fees
4.1 Introduction ............................................................................................................. 20
4.2 Overview of the City’s Water System ....................................................................... 20
4.3 Current Water Capacity and Connection Fees .......................................................... 21
4.4 Calculation of the Allowable Water Capacity and Connection Fees ......................... 21
4.4.1 Water System Planning Criteria .................................................................... 22
4.4.2 Calculation of Water Capacity and Connection Fee by Components ............. 23
4.5 Net Allowable Water Capacity and Connection Fees ............................................... 25
4.6 Key Water Capacity and Connection Fee Assumptions ............................................. 27
4.7 Implementation of the Proposed Water Capacity and Connection Fees ................... 28
4.8 Consultant Recommendations ................................................................................. 28
Table of Contents
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Table of Contents ii
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
4.9 Summary ................................................................................................................. 28
5 Determination of the City’s Wastewater Capacity and Connection Fees
5.1 Introduction ............................................................................................................. 29
5.2 Overview of the City’s Wastewater System .............................................................. 29
5.3 Current City Wastewater Capacity and Connection Fees .......................................... 29
5.4 Calculation of the Wastewater Capacity and Connection Fees ................................. 31
5.4.1 System Planning Criteria and Equivalent Dwelling Units ........................... 31
5.4.2 Calculation of Wastewater Capacity and Connection Fee by Component . 32
5.5 Proposed Wastewater Capacity and Connection Fees .............................................. 34
5.6 Key Wastewater Capacity and Connection Fee Assumptions ................................... 38
5.7 Implementation of the Wastewater Capacity and Connection Fee ........................... 38
5.8 Consultant Recommendations ................................................................................. 39
5.9 Summary ................................................................................................................. 39
Technical Appendices
Water Capacity Fee and Connection Fees
Exhibit W-1 Development of the Water Capacity and Connection Fee
Exhibit W-2 Development of EDUs
Exhibit W-3 Supply Capacity and Connection Fee
Exhibit W-4 Treatment Capacity and Connection Fee
Exhibit W-5 Distribution Capacity and Connection Fee
Exhibit W-6 Summary of Debt Service
Exhibit W-7 Summary of Reserve Funds
Exhibit W-8 Development of Future Capital Improvement Projects
Exhibit W-9 Allowable Water Capacity and Connection Fees
Exhibit W-10 Summary of Water Capacity and Connection Fee Schedule
Wastewater Capacity Fee and Connection Fees
Exhibit S-1 Development of the Wastewater Capacity and Connection Fee
Exhibit S-2 Development of EDUs
Exhibit S-3 Treatment Capacity and Connection Fee
Exhibit S-4A Development of Collection Capacity and Connection Fee
Exhibit S-4B Summary of Existing Catchment Assets
Exhibit S-5 Summary of Debt Service
Exhibit S-6 Summary of Reserve Funds
Exhibit S-7 Development of Future Capital Improvement Projects
Exhibit S-8 Allowable Wastewater Capacity and Connection Fees
Exhibit S-9 Summary of Catchment Calculation
Exhibit S-10 Summary of Wastewater Capacity and Connection Fee Schedule
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Abbreviations and Acronyms iii
City of San Luis Obispo – Water and Sewer Capacity and Connection Fees
The following abbreviations and acronyms are used within this report.
ADWF Average dry weather flow
City City of San Luis Obispo
CCI Consumer Cost Index
CF Capacity Fee
CIP Capital Improvement Plan
COP Certificates of participation
CPI Consumer Price Index
EDU Equivalent dwelling unit
ENR Engineering News Record
G.O. General Obligation (Bond)
GPD Gallons per day
MGD Million gallons per day
OC Original Cost
OCLD Original Cost Less Depreciation
RC Replacement/Reproduction Cost
RCLD Replacement/Reproduction Cost Less Depreciation
RCNLD Replacement/Replacement Cost New Less Depreciation
WRRF Water Resource Recovery Facility
WTP Water Treatment Plant
Abbreviations and Acronyms
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Capacity Fee Definitions iv
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
The following definitions related to the development of the City’s capacity and connection fees
are as follows:
“Allowable” Capacity and Connection Fee: Based upon the calculated fee, it is the maximum
cost-based fee which can be charged. As a matter of policy, a capacity and connection fee
which is less than the “allowable” capacity and connection fee may be charged.
Buy-In Methodology: A generally accepted methodology used to calculate a capacity and
connection fee which considers only the value of the existing assets of the utility.
Capacity and Connection Fee: A one-time fee paid by new development to finance
construction of public facilities needed to serve them.
Capacity and Connection Fee Eligible: The plant assets and value of that plant which are
included within the calculation of the capacity and connection fee. For example, the value of
any contributed or donated assets are not “capacity and connection fee eligible” and are
excluded from the calculation of the capacity and connection fee.
Combined Methodology: A generally accepted methodology used to calculate a capacity and
connection fee which considers both the value of the existing assets of the utility along with the
value of any future capacity/expansion related improvements.
Equivalent Dwelling Unit (EDU): One EDU is the level of service in gallons per day for an
average residential dwelling.
Existing Facilities: Plant assets which are currently in service and booked as an asset on the
City’s plant asset records.
Future/Expansion Facilities: Future planned assets which will be built to accommodate future
customer growth and the need for expanded capacity.
Gallons Per Day (GPD): The average gallons per day (gpd) that a customer or group of
customers use. Gallons per day may be further defined as being related to average day use or
peak day use.
Master Plan: A planning document used by the utility to assess current and future conditions
and needs, particularly as they relate to future customer growth and expansion infrastructure.
A master plan is typically accepted and adopted by the utility governing body.
Rational Nexus: A legal test to determine whether there is a reasonable connection (nexus)
between the burden of new development on the existing or new or expanded facilities required
to accommodate new or expanded development, and the appropriate apportionment of the
cost to the new or expanded development in relation to the benefits reasonably received.
Capacity Fee Definitions
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Executive Summary 1
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Introduction
Water Systems Consulting Inc. (WSC) and HDR Engineering, Inc. (HDR) were retained by the City
of San Luis Obispo (City) to conduct a comprehensive study to review and update the City’s
water and wastewater development impact fees. On February 7, 2017, the City Council
supported the name change to “capacity and connection” fees to more clearly communicate
the service provided and therefore this report will incorporate the name change.
This report (the “Report”) documents the results of the water and wastewater capacity and
connection fee study. The purpose of capacity and connection fees is to recover the costs of
public facilities in existence at the time the fee is imposed and/or for new public facilities to be
acquired or constructed in the future that are of proportional benefit to the person or property
being charged. These fees are charged to new customers connecting to the system, or to
existing customers increasing their demand (i.e., capacity requirement).
By establishing cost-based capacity and connection fees, the City will be taking an important
step in providing adequate infrastructure to meet growth-related needs and, more importantly,
providing this required infrastructure to new customers in a cost-based, fair and equitable
manner. The current water and wastewater fees were adopted in 2013. The fees adopted in
2013 were based only on specific growth related future projects and the costs associated with
financing those projects. The fees did not include existing infrastructure and capacity in the
existing system. Per City policy, and generally accepted approaches, the City has been updating
the fees, on an annual basis, using the Consumer Price Index (CPI).
Since the 2013 fee update the City has adopted several key infrastructure planning documents
which are major components in the development of the fees. Following the adoption of the
General Plan’s updated Land Use Element in December 2014, the City completed master plans
to identify and prioritize necessary capital improvements, including those projects to provide
capacity to serve future growth. The City’s Financial and Capital Improvement Plan provide the
basis for identifying future project capital costs along with the following documents:
x The Potable Water Distribution System Master Plan (2015)
x The Wastewater Collection System Infrastructure Renewal Strategy (2015)
x The Water Resource Recovery Facility Facilities Plan (2015)
x The Recycled Water Master Plan (2017)
This Report provides the basis for the City to implement cost-based capacity and connection
fees and includes a detailed determination of the capacity and connection fees using “generally
accepted” engineering and rate setting principles, while incorporating City specific information
on assets, customer base, and growth related capital projects.
Executive Summary
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Executive Summary 2
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Capacity and Connection Fee Approach
The City’s capacity and connection fees in the Report are based upon the value of both existing
and future capital infrastructure needed to accommodate future growth, divided by the
number of equivalent dwelling units (EDUs) served by that capacity. This methodology is called
the combined approach and is outlined in the American Water Works Association (AWWA) M1
Manual, Principles of Water Rates, Fees and Charges. Given that the City has previously used
only specific future projects or the “incremental methodology” for calculating the fees, the
current approach along with the combined approach was developed for the City to consider.
The combined approach is based on a blended value of both the existing and expanded
system’s capacity. This method is typically used where there is capacity available in parts of the
existing system (e.g., source of supply), but new or incremental capacity will need to be built in
other parts (e.g., transmission and distribution pipelines) to serve new development at some
point in the future.”1 The calculations also take into account the financing mechanisms of
capital improvements. Based on the sum of the existing and future component costs, the net
allowable utility capacity and connection fee is determined. “Net” refers to the calculated
“gross” capacity and connection fee, net of any debt service credits. “Allowable” refers to the
concept that the calculated capacity and connection fees are the City’s maximum cost-based
charge. The City, as a matter of policy, may charge any amount up to the cost-based maximum
allowable capacity and connection fee, but not in excess of that amount. Charging an amount
greater than the “allowable” capacity and connection fee would not meet the nexus test of a
cost-based capacity and connection fee related to the benefit derived by the customer.
Capacity and connection fees must be implemented according to the capacity requirement, or
impact, each new development has on the utility system. By doing so, the capacity and
connection fee is directly related to the impact the customer places on the system, and to the
proportional benefit the customer derives from the service (i.e., facilities) provided.
Water Capacity and Connection Fee
The City charges new customers connecting to the water system a one-time water capacity and
connection fee. The current City ordinance governing the imposition of capacity and
connection fees provides a capacity and connection fee according to type of use. The EDU is
based on a residential customer and applied to other customer classes based on generally
accepted flow assumptions by customer type.
The City, per City resolution, updates the fees each year by the Consumer Price Index (CPI). The
City’s current water capacity and connection fees for 2017-18, as of July 1, 2017, are shown
below in Table ES-1.
1 AWWA M-1 Manual, p 6th Edition, p. 265-266.
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Executive Summary 3
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES - 1
Current Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type
EDU
Unit
Current
Capacity and
Connection
Fee $/EDU [1]
Residential (per unit)
Single Family Residential 1.0 $11,322.16
Multi-Family Residential 0.7 7,925.51
Mobile Home 0.6 6,793.30
Studio Unit (450 s.f. or less) 0.3 3,396.65
Non-Residential
5/8” to 3/4" 1.0 $11,322.16
1-inch 1.7 19,247.68
1-1/2 inch 3.4 38,495.36
2-inch 5.4 61,138.45
3-inch 10.7 121,145.00
4-inch 16.7 185,076.96
6-inch 33.4 378,153.92
[1] – City’s current water capacity and connection fees effective July 1, 2017.
In this Report, the City updated the projections for future residential and non-residential
development in equivalent dwelling units based on reduction in average water use since 2013
from the City’s utility billing data. This reduction is from 150 gallons per day (gpd) per
residential equivalent dwelling unit (EDU) to 134 gallons per day per EDU based on the City’s
three-year average for single family residential units. Based on the City owned wastewater
treatment capacity average dry weather flow of 4.93 MG, the existing average dry weather flow
of 4.15 MGD which includes projected flow for vested and pending projects under construction,
and the 134 gallons per day per equivalent dwelling unit, there are 5,821 equivalent dwelling
units, or “EDUs,” that can be accommodated in the City.
In the 2013 Fee Study, a new fee category was added to reflect water demand for units 450
square feet or less at 0.30 of a full EDU. Based on water demand of similar units, this fee
category is proposed to remain. In this Report, the residential category is modified as water
demand correlates more closely to unit size than a single- or multi-family unit designation as
shown in Table ES-2. Fee categories are proposed to correspond to residential units between
451 and 800 square feet and 801 square feet or more. New State regulations allow accessory
dwelling units within single-family residential zones, these units would not be assessed a
capacity and connection fee. Although no impact fee would be assessed, separate water
metering may still apply, if required by the City’s Municipal Code. Provided in Table ES-2 is a
summary of the residential equivalency factors.
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Executive Summary 4
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES - 2
Residential Equivalency Factors
Residential Unit Type
Average Annual Water
Consumption
Equivalency Factor
Residential Unit (801 square feet or more) 0.17 1.0
Residential Unit (451 to 800 square feet) 0.12 0.7
Mobile Home 0.10 0.6
Studio Unit (450 square feet or less) 0.05 0.3
Similar to the 2013 Study, fees for non-residential EDUs in this Report are based on water
meter safe operating capacity ratios from the American Water Works Association (AWWA)
specifications.
On February 7, 2017, the City Council directed staff to explore the following options for the
water capacity and connection fee update.
x Option 1 - Utilize a similar methodology to the 2013 Fee Study which only includes
growth related projects and financing costs.
x Option 2 - Utilize the combined methodology that includes the buy-in to both existing
and future water infrastructure.
Option 1 - The fees calculated in Option 1 are based on a similar methodology to the 2013 Fee
Study where only specific growth related projects and the financing costs are included in the
fee calculation. This option reflects the increased capital costs of these specific projects as well
as the new capital projects related to growth and expansion on the water system. Option 1
does not include a buy-in component to existing water infrastructure. The capacity and
connection fee under Option 1 is $11,872 per EDU.
Option 2 - The water capacity and connection fees calculated for Option 2 are based on the
combined methodology, as outlined in the AWWA M1 Manual, which values the cost of all
existing and future water assets and the proportion allocable to new growth on the system.
The growth related assets are attributed to existing and future development, 84 percent and 16
percent respectively. This split is based on future EDUs to total EDUs (5,821/36,971 = 16%).
The capacity and connection fee under Option 2 is $15,780 per EDU.
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Executive Summary 5
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table ES - 3
Option 1 and 2
Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type EDU Current Option 1 Option 2
Residential (per unit)
Residential Unit [1] 1.0 $11,322.16 $11,872 $15,780
Residential Unit [2] 0.7 7,925.51 8,310 11,046
Mobile Home 0.6 6,793.30 7,123 9,468
Studio Unit (450 s.f. or less) 0.3 3,396.65 3,562 4,734
Non-Residential
3/4-inch 1.0 $11,322.16 $11,872 $15,780
1-inch 1.7 19,247.68 20,182 26,826
1-1/2 inch 3.4 38,495.36 40,365 53,652
2-inch 5.4 61,138.45 64,109 85,212
3-inch 10.7 121,145.00 127,030 168,846
4-inch 16.7 189,076.96 198,262 263,526
6-inch 33.4 378,153.92 396,525 527,052
[1] Residential unit 1.0 defined as 801 square feet or more.
[2] Residential unit 0.7 defined as 451 to 800 square feet.
Option 1 is not recommended since the fees does not represent the total infrastructure costs
(capacity) necessary to serve new development or offer the greatest protection to the water
ratepayer. Option 2 is recommended, at $15,780 per EDU, as this fee represents the costs
associated with both existing and future infrastructure needed to serve future development
and offers the greatest protection to the water ratepayer.
Wastewater Capacity and Connection Fee
The City charges new customers connecting to the wastewater system a one-time wastewater
capacity and connection fee. The current City ordinance governing the imposition of capacity
and connection fees provides a capacity and connection fee according to type of use. The EDU
is based on a residential customer and applied to other customer classes based on generally
accepted flow assumptions by customer type. The EDU equivalency factors shown in water are
the same for wastewater. The City currently has a system wide fee, with additional charges for
catchment areas. The catchment areas are regions in the City served by sewer mains, lift
stations, and force mains. The catchment area fee varies based on area located due to pumped
flow, and land use served.
For the wastewater capacity and connection fee, the City’s gallons per day, per EDU, were
adjusted from 150 gallons per day (gpd) per residential equivalent dwelling unit (EDU) to 134
gallons per day per EDU. Based on the City owned wastewater treatment capacity average dry
weather flow of 4.93 MG, the existing average dry weather flow of 4.15 MGD which includes
projected flow for vested and pending projects under construction, and the 134 gallons per day
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Executive Summary 6
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
per equivalent dwelling unit, there are 5,821 equivalent dwelling units, or “EDUs,” that can be
accommodated in the City.
The City, per City resolution, updates the fees each year by the Consumer Price Index (CPI). The
City’s current wastewater capacity and connection fees for 2017-18, as of July 1, 2017, are
shown below in Table ES-4. It should be noted that there is a wastewater fee for City Wide as
well as additional fees for specific catchment area improvements. For those customers in a
catchment area, the City Wide fee is charged along with the appropriate catchment area fee.
Table ES - 4
Current Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit
(EDU)
Type of Use
City
Wide
Margarita
Tank Farm
Silver City
Calle
Joaquin
Laguna
Residential (per unit)
SF Residential $3,830.21 $2,819.50 $3,728,52 1,392.80 $1,878.64 $503.30
MF Residential 2,681.14 1,973.65 2,609.96 974.96 1,315.05 352.31
Mobile Home 2,298.12 1,691.70 2,237.11 835.68 1,127.18 301.98
Studio Unit 1,149.06 845.85 1,118.56 417.84 563.59 150.99
Non-Residential
3/4-inch $3,830.21 $2,819.50 $3,728.52 $1,392.80 $1,878.64 $503.30
1-inch 6,511.35 4,793.15 6,338.48 2,367.76 3,193.69 855.61
1-1/2 inch 13,022.70 9,586.30 12,676.96 4,735.53 6,387.37 1,711.22
2-inch 20,683.11 15,225.30 20,134.00 7,521.13 10,144.65 2,717.81
3-inch 40,983.19 30,168.64 39,895.14 14,902.98 20,101.44 5,385.30
4-inch 63,964.42 47,085.64 62,266.25 23,259.79 31,373.27 8,405.09
6-inch 127,928.85 94,171.28 124,532.51 46,519.58 62,746.54 16,810.17
[1] – City’s current wastewater capacity and connection fee effective July 1, 2017.
On February 7, 2017, the City Council directed the following options for the wastewater
capacity and connection fee.
x Option 1 - Utilize a methodology which includes specific growth related infrastructure
and financing costs only plus the catchment area fees.
x Option 2 - Utilize the combined methodology that includes fair share buy-in to both
existing and future infrastructure plus the catchment area fees.
x Option 3 - Option 1 with area-specific wastewater catchment area fees eliminated and
one citywide wastewater capacity and connection fee.
x Option 4 - Option 2 with area-specific wastewater catchment area fees eliminated and
one citywide wastewater capacity and connection fee
Option 1 - The fees calculated in Option 1 are based on a similar methodology to the 2013 Fee
Study where only specific growth related infrastructure and financing costs are included in the
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City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
fee calculation. This option reflects the increased capital costs of these projects as well as new
growth related capital projects. Option 1 does not include a buy-in component to existing
wastewater infrastructure. The capacity and connection fee under Option 1 is $8,165 per EDU.
The catchment area fees would be in addition to the city wide fee where applicable.
This option does not include all wastewater infrastructure costs (capacity) necessary to serve
new development or offer the greatest protection to the wastewater ratepayer. Therefore
Option 1 is not being recommended.
Option 2 - The wastewater capacity and connection fees calculated for Option 2 are based on
the combined methodology that values the cost of all existing and future wastewater assets
allocated to new growth. The growth related assets are attributed to existing and future
development, 84 percent and 16 percent. This split is based on future EDUs to total EDUs
(5,821/36,971 = 16%). The capacity and connection fee under Option 2 is $9,522 per EDU and
additional wastewater catchment area fees would apply, where applicable.
Option 3 - The wastewater capacity and connection fees calculated for Option 3 include those
fees calculated in Option 1, and include the cost of all catchment area improvements, for a
single fee for all customers connecting to the City’s system. In this option, the approximately
$15 million in capital improvements would be attributed to all approximately 5,800 future EDUs
in the City. The capacity and connection fee under Option 3 is $10,721 per EDU
Option 3 is not recommended. Like Option 1, Option 3 does not include all wastewater
infrastructure costs (capacity) necessary to serve new development and thereby does not offer
the greatest protection to the wastewater ratepayer.
Option 4 – This option uses the combined methodology from Option 2 with the catchments
area improvement costs included in total, for a single wastewater capacity and connection fee
for all customers connecting to the City’s system.
Option 4 is recommended, at $12,602 per EDU, as this fee represents the costs associated with
both existing and future infrastructure needed to serve future development, offers the greatest
protection to the wastewater ratepayer, and simplifies implementation of the City’s
wastewater capacity and connection fees.
The City’s proposed wastewater capacity and connection fees for Options 1, 2, 3 and 4 are
shown below in Table ES-5. Options 1 and 2 is the city wide fee and the additional catchment
fee shown in Table ES-6 would apply where applicable. Options 3 and 4 are single fees for all
customers regardless of the location.
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Table ES - 5
Options 1,2 , 3, and 4
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Type of Use
Equiv.
Dwelling
Unit (EDU)
Option 1
City
Wide [1]
Option 2
City
Wide [1]
Option 3
Full Cost [2]
Option 4
Full Cost [2]
Residential (per unit)
Residential [3] 1.00 $8,165 $9,522 $10,721 $12,602
Residential [3] 0.70 5,715 6,666 7,505 8,821
Mobile Home 0.60 4,899 5,713 6,433 7,561
Studio Unit 0.30 2,449 2,857 3,216 3,781
Non-Residential
5/8” to 3/4" 1.00 $8,165 $9,522
1-inch 1.70 13,880 16,188 $10,721 $12,602
1-1/2 inch 3.40 27,759 32,375 18,226 21,423
2-inch 5.40 44,088 51,420 36,452 42,847
3-inch 10.70 87,360 101,887 57,895 68,051
4-inch 16.70 136,347 159,021 114,718 134,841
6-inch 33.40 272,695 318,041 179,046 210,453
[1] City wide does not include additional catchment fee.
[2] Option 3 and 4 include catchment area costs and are a full cost fee.
[3] Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
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Table ES – 6
Option 1 and 2 - Additional Catchment Area Charges
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Additional Catchment Area Charges [1]
Type of Use
Margarita
Tank
Farm
Silver
City
Calle
Joaquin
Laguna
Airport
[2]
Foothill
[2]
Buckley
[2]
Residential (per unit)
Residential [3] $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
Residential [3] 2,681 2,234 1,700 2,029 304 4,460 15,623 450
Mobile Home 2,298 1,915 1,457 1,739 261 3,823 13,391 386
Studio Unit 1,149 958 729 870 130 1,912 6,696 193
Non-Residential
5/8” to 3/4" $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
1-inch 6,511 5,426 4,129 4,927 738 10,833 37,943 1,093
1-1/2 inch 13,022 10,852 8,259 9,855 1,477 21,665 75,885 2,187
2-inch 20,683 17,236 13,117 15,651 2,345 34,409 120,523 3,473
3-inch 40,982 34,153 25,990 31,013 4,647 68,181 238,815 6,882
4-inch 63,963 53,304 40,565 48,403 7,253 106,414 372,730 10,741
6-inch 127,925 106,608 81,129 96,807 14,506 212,828 745,460 21,483
[1] – These fees are in addition to the city wide fees in Options 1 and 2.
[2] – Airport, Foothills, and Buckley are new catchment area fees.
[3] Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
The detailed development of the City’s water capacity and connection fee is presented in
Section 4. The development of the wastewater capacity and connection fee is presented in
Section 5. Technical appendices are included within this Report to document the technical
analyses which were undertaken as a part of the study.
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“By establishing cost-based
capacity and connection fees
the City maintains an
approach of having “growth
pay for growth” and existing
utility customers should, for
the most part, be sheltered
from the financial impacts of
growth.”
1.1 Introduction
HDR Engineering, Inc. (HDR) was retained by the City of San Luis Obispo (City) to conduct a
study to review and update its water and wastewater capacity and connection fees. The
objective of the study is to calculate cost-based capacity and connection fees for new
customers connecting to the utility system, or those customers requesting additional capacity.
These fees provide the means of balancing the cost requirements for utility infrastructure
between existing customers and new customers. The
portion of existing infrastructure and future capital
improvements that will provide service (i.e., capacity) to
new customers is included in the calculation of the capacity
and connection fees. In contrast to this, the City has future
capital improvement projects that are related to renewal
and replacement of existing infrastructure in service. These
infrastructure costs are included within the rates of the
water and wastewater service fees charged to the City’s
customers, and are not included within the calculation of
the proposed capacity and connection fees. By establishing cost-based capacity and connection
fees the City maintains an approach of having “growth pay for growth” and existing utility
customers should, for the most part, be sheltered from the financial impacts of growth.
1.2 Organization of Report
This Report documents the methodology, approach and technical analysis undertaken by HDR
and the City in conducting the study and developing the City’s water and wastewater capacity
and connection fees. The Report is divided into five sections. Section 1 provides a brief
introduction and overview of the study. Given this brief introduction, Section 2 provides a
general overview of the development of capacity and connection fees and the criteria and
general methodology that should be used to calculate and establish cost-based fees. Next,
Section 3 provides an overview of the requirements under California law for determining
capacity and connection fees. Section 4 reviews the City specific calculations of the cost-based
water capacity and connection fee. Finally, Section 5 reviews the development and calculation
of the wastewater capacity and connection fee.
1.3 Disclaimer
HDR, in its calculation of the water and wastewater capacity and connection fees presented in
this Report, has used “generally accepted” engineering and ratemaking principles. This should
not be construed as a legal opinion with respect to California law. HDR recommends that the
City have its legal counsel review the capacity and connection fees as forth in this Report to
ensure compliance with California law.
Introduction
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2.1 Introduction
An important starting point in establishing capacity and connection fees is to have a basic
understanding of the purpose of these fees, along with the criteria and general methodologies
that are used to establish cost-based fees. Presented in this section of the Report is an
overview of these fees and the criteria and general methodologies that may be used to develop
cost-based capacity and connection fees.
2.2 Defining Capacity and Connection Fees
The first step in establishing cost-based capacity and connection fees is to gain a better
understanding of what a capacity and connection fee is. Simply stated, a capacity and
connection fee is a contribution of capital to either reimburse existing customers for the
available capacity in the existing system, or help finance planned future growth-related capacity
improvements. The objective of these charges is to provide funds to the utility to finance all or
a part of the existing or new capital improvements needed to serve and accommodate new
customer growth. Absent these fees, many utilities would likely be unwilling to build growth-
related facilities (i.e., burden existing rate payers with the entire cost of growth-related capacity
expansion).
2.3 Economic Theory and Capacity and Connection Fees
Capacity and connection fees are generally imposed as a condition of service. The objective of
a capacity and connection fee is not merely to generate money for a utility, but to ensure that
all customers seeking to connect to or requiring additional capacity in the utility’s system bear
an equitable share of the cost of capacity that is invested in both the existing system and any
future growth-related expansions. Through the implementation of fair and equitable capacity
fees, existing customers should not be unduly burdened with the cost of new development.
By establishing cost-based fees, the City will be taking an important step in providing adequate
infrastructure to meet growth-related needs, and more importantly, providing the
infrastructure required to serve new customers in a cost-based, fair and equitable manner.
2.4 Capacity and Connection Fee Criteria
In the determination and establishment of the capacity and connection fees, a number of
different criteria are often utilized by public agencies, including the following:
Customer understanding
System planning criteria
Financing criteria, and
State/local laws
Overview of Capacity and Connection Fees
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“System planning criteria
provides the “rational
nexus” between the
amount of infrastructure
necessary to provide
service and the charge to
the customer.”
The component of customer understanding implies that the fee is easy to understand. This
criterion has implications on the way that the fees are implemented and assessed to the
customer. For water systems, the fee is generally based on specific customer usage (demand)
or meter size. The other implication of this criterion is that the methodology is clear and
concise in its calculation of the amount of infrastructure necessary to provide service.
The use of system planning criteria is one of the more important
aspects in the determination of capacity and connection fees.
System planning criteria provides the “rational nexus” between
the amount of infrastructure necessary to provide service and
the charge to the customer. The rational nexus test requires that
there be a connection (nexus) established between the burden of
new development on the existing or new or expanded facilities
required to accommodate new or expanded development, and
the appropriate apportionment of the cost to the new or
expanded development in relation to benefits reasonably received.
To comply with the rational nexus test the calculated fees require the following:
1. “A connection be established between new development and the new or expanded
facilities required to accommodate such development. This establishes the rational basis
of public policy.
2. Identification of the cost of these new or expanded facilities needed to accommodate
new development. This establishes the burden to the public of providing new facilities to
new development and the rational basis on which to hold new development accountable
for such costs. This may be determined using the so-called Banberry factors. [Banberry
Development Company v. South Jordan City (631 P.2d 899, Utah 1981)].
3. Appropriate apportionment of that cost to new development in relation to benefits it
reasonably receives. This establishes the nexus between the fees being paid to finance
new facilities that accommodate new development and benefit new development
receives from such new facilities.”1
The first requirement of the rational nexus test requires the establishment of a rational basis of
public policy. This implies the planning and capital improvement studies that are used to
establish the need for new facilities to accommodate growth. Adopted master plans or facility
plans should firmly meet this first test since these plans assess existing facilities and capacity,
project future capacity requirements, and determine the future capital infrastructure and new
facilities needed to accommodate growth.
The second requirement of the rational nexus test discusses the Banberry Factors. In summary,
“consideration must be given to seven factors to determine the proportionate share of costs to
be borne by new development:
1. The cost of existing facilities
1 Arthur C. Nelson, System Development Charges for Water, Wastewater, and Stormwater Facilities, Lewis
Publishers, New York, 1995, p. 16 and 17.
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City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
“One of the driving
forces behind
establishing cost-
based capacity and
connection fees is
that “growth pays
for growth.”
2. The means by which existing facilities have been financed
3. The extent to which new development has already contributed to the cost of providing
existing excess capacity
4. The extent to which existing development will, in the future, contribute to the cost of
providing existing facilities used community wide or non-occupants of new development
5. The extent to which new development should receive credit for providing, at its cost,
facilities the community has provided in the past without charge to other development in
the service area.
6. Extraordinary costs incurred in serving new development
7. The time-price differential inherent in fair comparisons of amount of money paid at
different times.”2
The final portion of the rational nexus test is the reasonable apportionment of the cost to new
development in relation to benefits it reasonably receives. This is accomplished in the
methodology to establish the capacity and connection fees, which is discussed in more detail
within this section.
One of the driving forces behind establishing cost-based capacity and connection fees is that
“growth pays for growth.” Therefore, these fees are typically established as a means of having
new customers, and those requiring additional capacity in the utility
system, pay an equitable share of the cost of the infrastructure
(capacity) required to serve them. The financing criteria for
establishing the fees relates to the method used to finance
infrastructure on the system and assures that customers are not
paying twice for infrastructure – once through the capacity and
connection fees and again through water or wastewater service
fees. The double payment can come in through the imposition of
growth-related infrastructure debt service within a customer’s
rates. The financing criteria also reviews the basis under which main line extensions were
provided and assures that the customer is not charged for infrastructure that was provided
(contributed) by developers.
Under California law, and as described in Section 3 of this Report, the amount of a capacity and
connection fee imposed by a public agency does not need to be mathematically exact, but it
must bear a reasonable relationship to the cost burden imposed and benefits received. As
discussed above, the utilization of the planning and financing criteria and the actual costs of
construction and the planned costs of construction provide the nexus for the reasonable
relationship requirement.
2.5 Overview of the Capacity and Connection Fee Methodology
In establishing capacity and connection fees, there are differing methodologies. The AWWA M-
1 Manual discusses three generally accepted methods;
2 Ibid, p. 18 and 19.
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City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
x “The buy-in method is based on the value of the existing system’s capacity. This method
is typically used when the existing system has sufficient capacity to serve new
development now and into the future.
x The incremental cost method is based on the value or cost to expand the existing
system’s capacity. This method is typically used when the existing system has limited or
no capacity to serve new development now and into the future.
x The combined approach is based on a blended value of both the existing and expanded
system’s capacity. This method is typically used where some capacity is available in
parts of the existing system (e.g., source of supply) and new or incremental capacity will
need to be built in other parts (e.g., transmission and distribution) to serve new
development at some point in the future.”3
For the development and calculation of the City’s capacity and connection fees the “combined
approach” was used since there is available capacity in the existing system and the need for
future (capacity) expansion. Historically the City has used the incremental cost method for
specific growth projects and has not included the backbone infrastructure of the system. For
the combined approach, the value of City assets will be determined and then be divided by the
total number of existing and future EDUs. The expanded capacity projects will be determined
and divided by the number of additional future EDUs. The two components will then be
combined to determine the total capacity and connection fee.
Capacity and Connection Fee Equation:
Where:
A = Value of existing facilities
B = Depreciation of existing facilities
C1 = Value of future growth-related City-constructed facilities
D = Existing City EDUs
E = Purchased, but not installed, EDUs
F = Future EDUs to ultimate buildout
Regardless of the overall methodology selected, a common denominator of the technical
analyses is the various steps undertaken. These steps are as follows:
Determination of system planning criteria
Determination of equivalent dwelling unit equivalents (EDUs)
Calculation of existing system costs
Determination of any credits
3 AWWA M-1 Manual, 6th Edition, p. 265-266.
(A - B) C1 Total City Facilities at Buildout Future Growth Related Facilities
_______D + E + F F Total Customers at Buildout Future EDUs at Buildout
=++
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City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
The first step in establishing capacity and connection fees is the determination of the system
planning criteria. This implies calculating the amount of water or wastewater capacity required
by a single-family residential customer in the terms of an equivalent dwelling unit (EDU). The
number of EDUs provides the linkage between the amounts of infrastructure necessary to
provide service to a set number of customers.
Once the number of EDUs or capacity components for the system is determined, a component-
by-component system analysis is undertaken to determine the portion of the capacity and
connection fee attributable in dollars per EDU. In this process, the existing assets must be
valued. Existing assets may be valued in a number of different ways. These methods may
include the following:
9 Original Cost (OC)
9 Original Cost Less Depreciation (OCLD)
9 Replacement Cost New (RCN)
9 Replacement Cost New Less Depreciation (RCNLD)
Given these four different methods for valuing the assets, the selection of the valuation
method certainly arises. The American Water Works Association M-1 Manual notes the
following concerning these generally accepted valuation methods:
“Using the OC and OCLD valuations, the [capacity fee] reflects the original investment in
the existing capacity. The new customer “buys in” to the capacity at the OC or the net
book value cost (OCLD) for the facilities and as a result pays an amount similar to what
the existing customers paid for the capacity (OC) or the remaining value of the original
investment (OCLD).
Using the RCN and the RCNLD valuations, the [capacity fee] reasonably reflects the cost
of providing new expansion capacity to customers as if the capacity was added at the
time the new customers connected to the water system. It may be also thought of as a
valuation method to fairly compensate the existing customers for the carrying costs of
the excess capacity built into the system in advance of when the new customers connect
to the system. This is because, up to the point of the new customer connecting to the
system, the existing customers have been financially responsible for the carrying costs of
that excess capacity that is available to development.”4
As a point of reference for this Report, the City’s water and wastewater capacity and
connection fee analysis will use an RCNLD methodology for all assets. The City’s existing assets
are escalated to replacement dollars and then depreciated using a simple straight-line method
based on the useful life of each historical asset, respectively. The total existing assets are then
divided by the sum of existing EDUs and additional future EDUs to determine the “gross existing
capacity and connection fee”.
After the existing infrastructure is analyzed, the future expansion projects are then added to
the total cost component. This total future cost is divided by the total future EDUs to
4 Ibid., p. 268
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determine the “gross future capacity and connection fee”. The existing and future capacity and
connection fees are combined or added together for a total capacity and connection fee.
2.6 Summary
This section of the Report has provided an overview of capacity and connection fees; the basis
for establishing cost-based fees, considerations in establishing the fees, the burden
development places on the system and the technical or analytical steps typically taken in the
development of the fees. In the development of the City’s capacity and connection fee study,
the issues identified in this section of the Report have been addressed and will be discussed in
more detail in later sections of the Report. The next section of the Report provides a brief
overview of the legal considerations in establishing capacity and connection fees as they relate
to California law.
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“The laws for the
enactment of capacity and
connection fees in
California are found in
California Government
Code sections 66013,
66016, and
66022 within the
‘Mitigation Fee Act.’”
3.1 Introduction
An important consideration in developing a capacity and connection fee is any legal
requirements at the state or local level. The legal requirements often provide the authority to
establish the fees, but also may provide a general methodology around which the capacity and
connection fees must be calculated or how the funds must be used. Given that, it is important
for the City to understand these legal requirements and develop and adopt fees which comply
with those legal requirements. This section of the Report provides an overview of the legal
requirements for establishing capacity and connection fees under California law. A discussion
of the applicability of Proposition 218 and Proposition 26, as it relates to these fees, is also
provided.
The discussion within this section of the Report is intended to be a summary of our
understanding of the relevant California law as it relates to establishing capacity and
connection fees. It in no way constitutes a legal interpretation of California law by HDR.
3.2 Requirements under California Law
Many states have specific laws regarding the establishment, calculation and implementation of
capacity and connection fees. The main objective of most state laws is to assure that these
charges are established in such a manner that they are fair, equitable and cost-based. In other
cases, state legislation may have been needed to provide the legislative powers to the utility to
establish the charges.
The laws for the enactment of capacity and connection fees in
California are codified in California Government Code sections
66013, 66016, and 66022, which are interspersed within the
‘Mitigation Fee Act.’ The above sections set forth the various
requirements for imposition of capacity and connection fees in
California: calculation of the fees, noticing, accounting and
reporting requirements, and processes for judicial review.
Although contained within the Mitigation Fee Act, capacity and
connection fees are not development fees.
Legal Considerations in Establishing
Capacity and Connection Fees
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A summary of the relevant statutes required in the calculation of capacity and connection fees
is as follows:
“66013 (a) Notwithstanding any other provision of law, when a local agency imposes
fees for water connections or sewer connections, or imposes capacity charges, those fees
or charges shall not exceed the estimated reasonable cost of providing the service for
which the fee or charge is imposed, unless a question regarding the amount of the fee or
charge imposed in excess of the estimated reasonable cost of providing the services or
materials is submitted to, and approved by, a popular vote of two-thirds of those
electors voting on the issue.”
“66013 (b) (3) ‘Capacity charge’ means a charge for facilities in existence at the time a
charge is imposed or charges for new facilities to be constructed in the future that are of
benefit to the person or property being charged. . . .”
In addition to the determination of “the estimated reasonable cost of providing the service for
which the fee is imposed,” California law also requires the following:
That notice (of the time and place of the meeting, including a general explanation of the
matter to be considered) and a statement that certain data is available be mailed to
those who filed a written request for such notice;
That certain data (the estimated cost to provide the service and anticipated revenue
sources) be made available to the public;
That the public agency provide an opportunity for public input at an open and public
meeting to adopt or modify the fee; and
That revenue in excess of actual cost be used to reduce the fee creating the excess.
The basic principle that needs to be followed under California law is that the charge be based
on a proportionate share of the costs of the system required to provide service and that the
requirements for adoption and accounting be followed in compliance with California law.
3.3 Propositions 218 and 26 and Capacity and Connection Fees
In 1996, the voters of California approved Proposition 218, which required that the imposition
of certain fees and assessments by municipal governments require a vote of the people to
change or increase the fee or assessment. Of interest in this particular study is the applicability
of Proposition 218 to the establishment of capacity and connection fees for the City.
In Richmond v. Shasta Community Services Dist., 32 Cal.4th 409 (2004), the California Supreme
Court held that water capacity and connection fees are not “assessments” under Proposition
218 because they are imposed only on those who are voluntarily seeking water service, rather
than being charged to particular identified parcels, and therefore such fees are not subject to
the procedural or substantive requirements of Proposition 218. Additionally, the court held
that a capacity and connection fee is not a development fee. The court also held that such fees
can properly be enacted by either ordinance or resolution.
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In November 2010 the voters of California passed Proposition 26, an initiative based state
constitutional amendment, which provided a new definition of the term “tax” in the California
Constitution. Under Proposition 26 a fee or charge imposed by a public agency is a tax unless it
meets one of seven exceptions. Capacity and connection fees fall within exception 2 – i.e., it is
a charge imposed for a specific government service. Provided that a capacity and connection
fee does not charge one fee payor more in order to charge another fee payor less (i.e., a cross-
subsidy), and it does not exceed the reasonable costs to the local government of providing the
service, then the fee is not a tax within the meaning of Proposition 26. Under Proposition 26,
the local government bears the burden of proving, by a preponderance of the evidence, that a
levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover
the reasonable costs of the governmental activity, and that the manner in which those costs are
allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits
received from, the governmental activity.
3.4 Summary
This section of the Report has provided an overview of the legal requirements under California
law for the establishment of capacity and connection fees. As was noted above, an important
legal requirement is that the fees or charges shall not exceed the estimated reasonable cost of
providing the service for which the fee or charge is imposed. The following sections of the
Report provide the City’s calculation of the water and wastewater capacity and connection
fees, and provides the basis for the establishment of reasonable fees.
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4.1 Introduction
This section of the Report presents the details and key assumptions in the calculation of the
City’s water capacity and connection fees. The calculation of the City’s water capacity and
connection fee is based upon City specific accounting and planning information. Specifically,
the capacity and connection fee is based upon the City’s fixed asset records; the City’s current
capital improvement plans; and determination of existing EDUs and the projection of future
EDUs. As was noted in Section 2 of this Report, these planning documents and projections of
future EDUs provide the required support for a “rationally based public policy” to support the
imposition of cost-based capacity and connection fees.
To the extent that the cost and timing of future capital improvements change, then the capacity
and connection fee presented in this section of the Report should be updated to reflect the
changes.
4.2 Overview of the City’s Water System
The City of San Luis Obispo has three main sources of water. The Salinas Reservoir, also known
as Santa Margarita Lake, the Whale Rock Reservoir, and Nacimiento Lake. The surface water
from the three lakes is treated at the Stenner Creek Water Treatment Plant (WTP). During
2016, the treatment plant delivered 1.63 billion gallons of water to San Luis Obispo.
The City is supplied recycled water from its Water Resource Recovery Facility (WRRF). In 2016,
recycled water is utilized for landscape irrigation and for construction water (dust suppression,
compaction, etc.). The City will be maximizing the production of recycled water with the
upgrade of the WRRF scheduled to begin construction in 2018 and studies are underway to
maximize the use of this resource.
The City’s potable water distribution system delivers water from the WTP to approximately
15,000 metered customers and over 2,000 fire hydrants via two storage reservoirs, eight pump
stations, ten water tanks, and approximately 185 miles of water mains.
The water delivered from the WTP is split into two main distribution networks. The WTP has a
major pump station that pumps water to the high pressure zones which provides service to the
higher elevation areas in the City. The transfer pumps take approximately half of the water,
increase the pressure, and then provide water to Stenner Canyon Reservoir (Reservoir #2), Cal
Poly, and other portions of the City. Water flows by gravity directly into the lower pressure
zone from the WTP's onsite clear well tanks.
Water storage facilities are necessary to provide water during peak demand periods and
emergency situations such as fires. The City has twelve water storage facilities, nine of which
are steel storage tanks ranging in size from 0.04 to four million gallons and three concrete
Determination of the City’s Water Capacity and
Connection Fees
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City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
facilities with a capacity of 0.35 to 7.5 million gallons. The combined storage capacity is 26.22
million gallons.
4.3 Current Water Capacity and Connection Fees
The City, per City resolution updates the fees each year by the Consumer Price Index (CPI). The
City’s current water capacity and connection fees for 2017-18, as of July 1, 2017, are shown
below in Table 4-1.
Table 4 - 1
Current Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type
EDU
Unit
Current
Capacity and
Connection
Fee $/EDU [1]
Residential (per unit)
Single Family Residential 1.0 $11,322.16
Multi-Family Residential 0.7 7,925.51
Mobile Home 0.6 6,793.30
Studio Unit (450 s.f. or less) 0.3 3,396.65
Non-Residential
5/8” to 3/4" 1.0 $11,322.16
1-inch 1.7 19,247.68
1-1/2 inch 3.4 38,495.36
2-inch 5.4 61,138.45
3-inch 10.7 121,145.00
4-inch 16.7 185,076.96
6-inch 33.4 378,153.92
[1] – City’s current water capacity and connection fees effective July 1, 2017.
The above current water capacity and connection fees includes a residential and non-
residential land use type. The residential fee is based on per unit EDU. The non-residential is
based on meter size.
4.4 Calculation of the Allowable Water Capacity and Connection Fee
As was discussed in Section 2, the process of calculating the City’s water capacity and
connection fee is based upon a four-step process. These steps are as follows:
1. Determination of system planning criteria
2. Determination of equivalent dwelling units (EDUs)
3. Calculation of the capacity and connection fee for system costs
4. Determination of any capacity and connection fee credits
Each of these areas is discussed in more detail below.
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4.4.1 Water System Planning Criteria
System planning criteria are used to establish the capacity needs of an equivalent dwelling unit
(EDU). The City updated the projections for future residential and non-residential development
in equivalent dwelling units based on current consumption patterns, which was a reduction in
average water use since 2013, when the current fee was established. As a result of the reduced
consumption, the calculation of an EDU was reduced from 150 gallons per day per equivalent
residential unit to 134 gallons per day per equivalent residential unit based on the City’s three-
year average for single family residential units.
Like the 2013 study the water and wastewater EDU calculation were based on the same
criteria. Based on the available wastewater treatment capacity, less Cal Poly share is 4.9 MGD.
This capacity divided by 134 gallons per EDU is a total City existing and future EDUs of 36,971
EDUs. The existing average dry weather flow is 4.15 MGD which includes projected flow for
vested and pending projects under construction. Total existing EDUs would be 30,907 (4.15
MGD/ 134 gallons per day = 30,970). This leaves 5,821 future EDUs.
Table 4-2 provides a summary of the planning criteria used to establish the City’s proposed
water capacity and connection fee.
Table 4-2
Summary of the Planning Criteria for EDU Calculation
Planning Criteria Description Planning Criteria
WRRF Total Capacity
Future Average Dry Weather Flow/WRRF Design Capacity 5,400,000
Less: Cal Poly Average Dry Weather Flow Share 470,000
City Owned WRRF Capacity 4,930,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing and Future EDUs 36,971
WRRF Existing Capacity
Existing Average Dry Weather Flow 4,150,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing EDUs 30,970
Total City Future EDUs 5,821
Detail of the EDU calculation is shown in Exhibit W-2 of the Water Technical Appendix.
In the 2013 Fee Study, a new fee category was added to reflect water demand for units 450
square feet or less at 0.30 of a full EDU. Based on water demand of similar units, this fee
category is proposed to remain. In this Report, the residential category is modified as water
demand correlates more closely to unit size than a single- or multi-family unit designation as
shown in Table 4-3. Fee categories are proposed to correspond to residential units between
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451 and 800 square feet and 801 square feet or more. With the new State regulations allowing
accessory dwelling units within single-family residential zones, these units would not be
assessed a capacity and connection fee. Although no impact fee would be assessed, separate
water metering may still apply, if required by the City’s Municipal Code. See Table 4-3 for the
residential equivalency factors.
Table 4 - 3
Residential Equivalency Factors
Residential Unit Type
Average Annual Water
Consumption
Equivalency Factor
Residential Unit (801 square feet or more) 0.17 1.0
Residential Unit (451 to 800 square feet) 0.12 0.7
Non-Residential 0.10 0.6
Studio Unit (450 square feet or less) 0.05 0.3
Similar to the 2013 Study, fees for non-residential EDUs in the 2017 Fee Study are based on
water meter safe operating capacity ratios from the American Water Works Association
(AWWA) specifications.
4.4.2 Calculation of the Water Capacity and Connection Fee by Components
The next step of the analysis is to review the system infrastructure to determine the water
capacity and connection fee for the system. In calculating the water capacity and connection
fee for the City, existing components, debt service for existing facilities, future capital
improvements relating to expansion and capital fund reserves were included. The
methodology used to calculate each of these components is described below.
EXISTING OR BUY-IN COMPONENT – To calculate the value of the existing assets for the buy-in
component, the City’s methodology considered the original cost of each asset. The original cost
of the asset was then adjusted to a replacement cost value. The replacement cost of each asset
was then depreciated for the remaining useful life (i.e., replacement cost less depreciation).
The replacement cost method was used since this was the best information available.
The City provided an asset listing for the various existing components and their installation
dates. As was noted, there are different methods for valuing existing assets. In this case, a
replacement cost new, less depreciation method was used. To accomplish this, the asset listing
was reviewed for each asset and a replacement cost was estimated. A second review was
made of the asset listing to eliminate assets that would be decommissioned or obsolete given
the new capital projects listed as replacements or upgrades. Then, based on the installation
date for each asset and an estimated useful life, the replacement cost less depreciation was
calculated to determine the value of each asset for the capacity and connection fee analysis.
Given the value of the assets, the next step was to determine the portion of the project costs
that were determined to be eligible and included in the calculation of the capacity and
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connection fee. Within this study, contributions (i.e., the costs of donated or contributed
assets) were not included in the capacity and connection fee.
The final value of the assets was reduced by the amount of future principal on the debt
associated with the assets as the principal will be recovered via the debt component within the
City’s current rates. As described below (see Debt Service Component discussion), the
remaining principal portion of the debt associated with the assets was deducted from the total
eligible assets value prior to calculating the capacity and connection fee. This inclusion of a
“debt service credit” avoids double charging the customer for the asset value in the existing or
buy-in component of the capacity and connection fee, and also in the debt service component
of the rates. The principal portion of the debt service balance on existing assets is removed
from the value prior to calculating the buy-in portion of the fee.
DEBT SERVICE COMPONENT - In addition to the buy-in component, a debt service component was
also developed. This component accounts for the principal on existing assets. By segregating
the debt service costs, the costs can be clearly identified and calculated appropriately. To avoid
double-counting of the assets financed with debt, the future principal associated with those
assets was deducted from the existing infrastructure value.
The City has four outstanding debt issues for the water system. They are the 2012 Water
Revenue Refunding Bonds, 2007A Revenue Bonds (Nacimiento Water Project), Reuse SRF
Funding Repayments, and WTP Master Plan Improvements. The total debt service eligible is
approximately $53 million for water. Further detail can be seen on Exhibit W-6 of the Water
Technical Appendix.
OTHER COMPONENTS - In addition to the existing or buy-in component and debt service
component, capital fund reserves were determined to be capacity and connection fee-related.
These components are considered an adjustment to the overall water system asset valuation
since they are capacity infrastructure costs that relate to the water system as a whole and
funded through existing customers. The total capacity and connection fee eligible fund reserve
is $16 million for water. Further detail can be seen on Exhibit W-7 of the Water Technical
Appendix.
FUTURE COMPONENTS – An important requirement for a capacity and connection fee study is the
connection between the anticipated future growth on the system and the required facilities
needed to accommodate that growth. For purposes of this study, the City’s current Capital
Improvement Plan (CIP) provided future projects. The City staff reviewed the current capital
improvement plan and updated it with the best available information. Capital improvements
that were growth-related were included in the water capacity fee calculation and totaled
approximately $8.8 million through 2025. The largest area of capacity and connection fee
eligible projects is treatment projects totaling approximately $4.7 million. Future growth was
approximately 16% based on growth EDUs (5,821 future EDUs/36,791 total existing and future
EDUs = 16%). Exhibit W-8 of the Water Technical Appendix contains the details of this portion
of the fee.
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4.5 Net Allowable Water Capacity and Connection Fee
Based on the sum of the component costs calculated above, the net allowable water capacity
and connection fees were determined. “Allowable” refers to the concept that the calculated
capacity and connection fee shown on Table 4-5 is the City’s cost-based water capacity and
connection fee. The City, as a matter of policy, may charge any amount up to the allowable
capacity and connection fee, but not in excess of that amount. Charging an amount greater
than the allowable water capacity and connection fee would not meet the nexus test of cost-
based capacity and connection fee. Details are provided in Exhibit W-1 and Exhibit W-9 of the
Water Technical Appendix.
Table 4-5
Summary of Allowable Water Capacity and Connection Fees ($/EDU)
Total “Allowable”
Water Capacity and Connection Fee
Total Existing Plant (RCNLD) $241,639,328
Less: Outstanding Debt Principal ($53,702,781)
Plus: Reserves $16,079,051
Total Existing Plant $204,015,598
Total EDUs 36,791
Total Existing Capacity and Connection Fee per EDU $14,257
Total Future Plant $8,861,869
Total Future EDUs 5,821
Total Future Capacity and Connection Fee per EDU $1,523
Net Allowable Existing and Future per ($/EDU) $15,780
As can be seen in Table 4-5, the calculated water capacity and connection fee was determined
to be $15,780 per EDU. These fees are stated as one (1) EDU.
Table 4-6
Allowable Water Capacity and connection fee Summarized by
Existing and Expansion Components $/EDU)
Total “Allowable”
Water Capacity and
Connection Fee
% of
Total
Existing Plant Related $14,257 90.4%
Expansion Plant Related 1,523 9.6%
Allowable Capacity and Connection Fee ($/EDU) $15,780 100.0%
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Table 4-6 provides a better understanding of the relationship of the replacement-related
portion of the fee to the expansion related portion of the fee. Slightly more than ninety
percent of the calculated allowable fee is related to the existing facilities.
The fee also varies by customer type, but in all cases it is intended to reimburse the existing
customers for their portion of the system use that has been funded through rates over time on
a per EDU basis. The City’s current ordinance code provides a water capacity and connection
fee according to type of land use. The EDU is based on a residential customer and applied to
other customer classes based on generally accepted flow assumptions by land use or customer
type.
Similar to the City’s current approach, fees for non-residential EDUs in this Report are based on
water meter safe operating capacity ratios as developed by the American Water Works
Association (AWWA) specifications.
On February 7, 2017, the City Council directed staff to explore the following options for the
water capacity and connection fee update.
x Option 1 - Utilize a similar methodology to the 2013 Fee Study which included specific
projects related to growth and expansion of the water system infrastructure plus
financing costs.
x Option 2 - Utilize a methodology that includes fair share buy-in to both existing and
future water infrastructure.
Option 1 - The water capacity and connection fees calculated in Option 1 are based on a similar
methodology to the 2013 Fee Study where only specific water system improvements and the
financing costs of those improvements are included in the fee calculation. This option reflects
the increased capital costs of these projects as well as the financing of these capital projects.
Option 1 does not include a buy-in component to existing water infrastructure as only specific
“major” capital projects are included. These were projects such as the water treatment plant
expansion and upgrade and the Nacimiento pipeline project. This results in a calculated
capacity and connection fee of $11,872 per EDU.
Option 2 - The water capacity and connection fees calculated for Option 2 are based on a
methodology that values the cost of all existing and future water assets. The growth related
assets are attributed to existing and future development, 84 percent and 16 percent. This split
is based on future EDUs to total EDUs (5,821/36,971 = 16%). This results in a calculated
capacity and connection fee of $15,780 per EDU. Provided in Table 4-7 is a comparison of the
current fee, Option 1 (current methodology), and Option 2 (proposed methodology).
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Table 4 - 7
Option 1 and 2
Water Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Land Use Type EDU Current Option 1 Option 2
Residential (per unit)
Residential Unit [1] 1.0 $11,322.16 $11,872 $15,780
Residential Unit [2] 0.7 7,925.51 8,310 11,046
Mobile Home 0.6 6,793.30 7,123 9,468
Studio Unit (450 s.f. or less) 0.3 3,396.65 3,562 4,734
Non-Residential
3/4-inch 1.0 $11,322.16 $11,872 $15,780
1-inch 1.7 19,247.68 20,182 26,826
1-1/2 inch 3.4 38,495.36 40,365 53,652
2-inch 5.4 61,138.45 64,109 85,212
3-inch 10.7 121,145.00 127,030 168,846
4-inch 16.7 189,076.96 198,262 263,526
6-inch 33.4 378,153.92 396,525 527,052
[1] Residential unit 1.0 defined as 801 square feet or more.
[2] Residential unit 0.7 defined as 451 to 800 square feet.
Option 1 is not being recommended as the fees do not include all water infrastructure
necessary to serve new development or offer the greatest protection to the water ratepayer.
Option 2 is recommended, at $15,780 per EDU, as this fee represents the costs associated with
both existing and future infrastructure needed to serve future development and offers the
greatest protection to the water ratepayer.
4.6 Key Water Capacity and Connection Fee Assumptions
In the development of the City’s water capacity and connection fees, a number of key
assumptions were utilized. These are as follows:
The water capacity and connection fees were developed on the basis of the City’s
planning documents, anticipated future connections, and the needed capital
improvements to serve those future connections.
The assumed water gallon per day per equivalent dwelling unit was adjusted from 150
gpd to 134 gpd. This revised definition of an EDU links directly to the City’s planning
documents and current customer consumption patterns.
The City’s asset records and system information were used to determine the existing
infrastructure assets and their value based on replacement cost.
The City provided financial records related to capital reserves available and future water
debt service payments.
The City provided the most recent water CIP for future expansion improvements.
The City determined the portion of future improvements that were growth-related.
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The base year for the CIP was assumed at 2016.
The calculation of the debt credit component included current outstanding principal on
existing assets.
4.7 Implementation of the Proposed Water Capacity and Connection
Fees
HDR would recommend that the City continue to adjust the water capacity and connection fees
on an annual basis. The City currently uses the Consumer Price Index (CPI) for this annaula
update. This method of escalating the City’s fees should be used for no more than a five-year
period. After five years, HDR recommends that the City update the water capacity and
connection fees based on the actual cost of infrastructure and any new planned facilities that
would be contained in an updated master plan or CIP.
It is further recommended the City to consider using the Engineering News Record Construction
Cost Index (ENR-CCI) to reflect the cost of interest and inflation instead of the CPI. The ENR-CCI
is a reliable and consistent indices that tracks construction costs and is published every month
showing the national average of twenty cities.
4.8 Consultant Recommendations
Based on our review and analysis of the City’s existing water capacity and connection fees, HDR
provides the following recommendations:
The City should revise and update its water capacity and connection fees to the calculated
water capacity and connection fees for Option 2 as shown in this Report. The fees should
be applicable for any new customers connecting to the system, or an existing customer
requesting/requiring additional capacity. The adopted water capacity and connection fees
shall not exceed the calculated fees as set forth in this Report.
The City should make periodic (annual) adjustments to the water capacity and connection
fees based on changes in the Engineering News Record Construction Cost Index. This is
consistent with the City’s past practices using the CPI for these adjustments, as they relate
to these fees.
The City should update the actual calculations for the water capacity and connection fees
based on the methodology as approved by the resolution or ordinance setting forth the
methodology for water capacity and connection fees at such time when a new CIP, facilities
plan, master plan or a comparable plan is approved or updated by the City.
4.9 Summary
The development of the water capacity and connection fees by HDR utilized generally accepted
engineering and ratemaking principles, while applying City specific planning, asset and
customer information.
The City should have legal counsel review the Report and for consistency with applicable City
and State laws and regulations.
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City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
5.1 Introduction
This section of the Report presents the details and key assumptions in the calculation of the
City’s wastewater capacity and connection fee. The calculation of the City’s wastewater
capacity and connection fee is based upon City specific accounting and planning information.
Specifically, the wastewater capacity and connection fee is based upon: the City’s fixed asset
records; the City’s current wastewater capital improvement plan; existing equivalent dwelling
units (EDUs); and projection of future EDUs. As was noted in Section 2 of this Report, these
planning documents and projections of future EDUs provide the required support for a
“rationally based public policy” to support the imposition of cost-based wastewater capacity
and connection fee.
To the extent that the cost and timing of future capital improvements change, it is
recommended that the wastewater capacity and connection fee presented in this section of the
Report should be updated to reflect the changes.
5.2 Overview of the City’s Wastewater System
The City provides wastewater collection and treatment services to approximately 14,000
service connections. The City serves Cal Poly and the County of San Luis Obispo Airport. The
City’s wastewater collection system includes approximately 136 miles of gravity sewer mains
and 2,900 manholes, as well as nine sewage lift stations with three miles of force main.
The City is in the planning stages for an upgrade to the WRRF, the City’s wastewater treatment
plant. The WRRF is rated for 5.4 mgd maximum daily flow and treats an average of 4.15 mgd
average annual flow according to 2009 to 2016 flow data. After being treated, the water is
either discharged to San Luis Obispo Creek or distributed as recycled water.
5.3 Current City Wastewater Capacity and Connection Fees
The City, per City resolution, updates the fees each year by the Consumer Price Index (CPI). It
should be noted that there is a wastewater fee for City Wide as well as additional fees for
specific catchment area improvements. For those customers in a catchment area, the City Wide
fee is charged along with the appropriate catchment area fee. The City’s current wastewater
capacity and connection fees for 2017-18, as of July 1, 2017, are shown below in Table 5-1.
Determination of the City’s Wastewater
Capacity and Connection Fees
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Table 5 - 1
Current Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit
(EDU)
Type of Use
City
Wide
Margarita
Tank Farm
Silver City
Calle
Joaquin
Laguna
Residential (per unit)
SF Residential $3,830.21 $2,819.50 $3,728,52 1,392.80 $1,878.64 $503.30
MF Residential 2,681.14 1,973.65 2,609.96 974.96 1,315.05 352.31
Mobile Home 2,298.12 1,691.70 2,237.11 835.68 1,127.18 301.98
Studio Unit 1,149.06 845.85 1,118.56 417.84 563.59 150.99
Non-Residential
3/4-inch $3,830.21 $2,819.50 $3,728.52 $1,392.80 $1,878.64 $503.30
1-inch 6,511.35 4,793.15 6,338.48 2,367.76 3,193.69 855.61
1-1/2 inch 13,022.70 9,586.30 12,676.96 4,735.53 6,387.37 1,711.22
2-inch 20,683.11 15,225.30 20,134.00 7,521.13 10,144.65 2,717.81
3-inch 40,983.19 30,168.64 39,895.14 14,902.98 20,101.44 5,385.30
4-inch 63,964.42 47,085.64 62,266.25 23,259.79 31,373.27 8,405.09
6-inch 127,928.85 94,171.28 124,532.51 46,519.58 62,746.54 16,810.17
[1] – City’s current wastewater capacity and connection fee effective July 1, 2017.
The City current wastewater capacity and connection fees include a city wide fee and additional
catchment area charges for specific area improvements. Similar to the City’s water capacity
and connection fee, the fee also varies by customer type, reflective of the gallon per day (GPD)
capacity use in the equivalent dwelling unit (i.e., EDU %).
The catchment areas are regions in the City served by sewer mains, lift stations, and force
mains. Each catchment area varies in the amount of wastewater flow pumped, due to the
topography, area, and land uses served. These catchment areas are primarily located in the
southern portion of the City, except for the Foothill catchment area located in the northeast
area of the City. The total cost of the catchment area improvements is over $34 million, with
approximately $15 million attributed to new development. The cost of wastewater
improvements is allocated to future development based on flow generation in each of the
catchment areas. Of the over 5,800 future EDUs in the City, approximately 80 percent, or 4,600
future EDUs, are located in areas served by lift stations, identified as “catchment areas”.
New fees are identified for three new catchment areas (Airport, Buckley, and Foothill). The
Airport and Foothill catchment area fees support the replacement of existing lift station
infrastructure. The Buckley catchment area fee is applicable to development in the Airport Area
Specific Plan, including the Avila Ranch project and other development east of that project
along Buckley Road.
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5.4 Calculation of the Wastewater Capacity and Connection Fee
As was discussed in Section 2, and similar to the approach used for the water capacity and
connection fees, the process of calculating the City’s wastewater capacity and connection fee is
based upon a four-step process. These steps were as follows:
1. Determination of system planning criteria
2. Determination of equivalent dwelling units (EDUs)
3. Calculation of the capacity and connection fees for system costs
4. Determination of any capacity and connection fee credits
5.4.1 System Planning Criteria and Equivalent Dwelling Units
System planning criteria are used to establish the capacity needs of an equivalent dwelling unit
(EDU). The City updated the projections for future residential and non-residential development
in equivalent dwelling units based on reduction in average water use since 2013 from the City’s
utility billing data. This reduction is from 150 gallons per day per equivalent residential units to
134 gallons per day per equivalent residential unit based on the City’s three-year average for
single family residential units. Based on the available wastewater treatment capacity, less Cal
Poly share is 4.9 MGD. This capacity divided by 134 gallons per EDU is a total City existing and
future EDUs of 36,971 EDUs. The existing average dry weather flow is 4.15 MGD which includes
projected flow for vested and pending projects under construction. Total existing wastewater
EDUs would be 30,907 (4.15 MGD/ 134 gallons per day = 30,970). This leaves 5,821 future
EDUs.
Table 5-2 provides a summary of the planning criteria used to establish the City’s proposed
wastewater capacity and connection fee.
Table 5-2
Summary of the Planning Criteria for EDU Calculation
Planning Criteria Description Planning Criteria
WRRF Total Capacity
Future Average Dry Weather Flow/WRRF Design Capacity 5,400,000
Less: Cal Poly Average Dry Weather Flow Share 470,000
City Owned WRRF Capacity 4,930,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing and Future EDUs 36,971
WRRF Existing Capacity
Existing Average Dry Weather Flow 4,150,000
Average Day Flow per EDU 134 gallons/EDU
Total City Existing EDUs 30,970
Total City Future EDUs 5,821
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Detail of the EDU calculation is shown in Exhibit S-2 of the Wastewater Technical Appendix.
As discussed in the water capacity and connection fee section, the residential category is
adjusted as water demand correlates more closely to unit size than a single- or multi-family unit
designation as shown in Table 5-3. Fee categories are proposed to correspond to residential
units between 451 and 800 square feet and 801 square feet or more. New State regulations
allow accessory dwelling units within single-family residential zones, these units would not be
assessed a capacity and connection fee. However, where fees are applicable, the fee will vary
depending on the size of the residential unit. Table 5-3 shows the residential definitions for
establishing the equivalent EDU factor.
Table 5 - 3
Residential Equivalency Factors
Residential Unit Type
Average Annual Water
Consumption
Equivalency Factor
Residential Unit (801 square feet or more) 0.17 1.0
Residential Unit (451 to 800 square feet) 0.12 0.7
Non-Residential 0.10 0.6
Studio Unit (450 square feet or less) 0.05 0.3
Similar to the 2013 Study, wastewater fees for non-residential EDUs in this Report are based on
water meter safe operating capacity ratios as developed by the American Water Works
Association (AWWA) specifications.
5.4.2 Calculation of the Wastewater Capacity and Connection Fee by Component
The next step of the analysis is to review the major functional wastewater system infrastructure
to determine the wastewater capacity and connection fee for the City. In calculating the
wastewater capacity and connection fee for the City, existing asset components, debt service
for existing facilities, future capital improvements relating to expansion and capital fund
reserves were included. The methodology used to calculate each component is described
below.
EXISTING OR BUY-IN COMPONENT – To calculate the value of the existing assets for the buy-in
component, the City’s methodology considered the original cost of each asset. The original cost
of the asset was then adjusted to a replacement cost value. The replacement cost of each asset
was then depreciated for the remaining useful life (i.e., replacement cost less depreciation).
The replacement cost method was used since it was the best information available.
The City provided an asset listing for the various existing components and their installation
dates. As was noted, there are different methods for valuing existing assets. In this case, a
replacement cost new, less depreciation method was used. To accomplish this, the asset listing
was reviewed for each asset and a replacement cost was estimated. A second review was
made of the asset listing to eliminate assets that would be decommissioned or obsolete given
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Determination of the City’s Wastewater Capacity and Connection Fees 33
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
the new capital projects listed as replacements or upgrades. This is particular important given
the large capital project for the Water Resource Recovery Facility (WRRF) in which some
existing assets will be obsolete and or decommissioned with the new facility project. Then,
based on the installation date for each asset and an estimated useful life, the replacement cost
less accumulated depreciation for each asset can be calculated.
Given the value of the assets, the next step was to determine the portion of the project costs
that were deemed eligible to be included in the calculation of the capacity and connection fee.
Within this study, contributions (i.e., the costs of donated or contributed assets) were not
included in the capacity and connection fee.
The final value of the assets was reduced by the amount of future principal on the debt
associated with the assets as the principal will be recovered via the debt component within the
City’s current rates. As described below (see Debt Service Component discussion), the
remaining principal portion of the debt associated with the assets was deducted from the total
eligible asset value prior to calculating the capacity and connection fee. This inclusion of a
“debt service credit” avoids double charging the customer for the asset value in the existing or
buy-in component of the capacity and connection fee, and also in the debt service component
of the rates. The principal portion of the debt service balance on existing assets is removed
from the value prior to calculating the buy-in portion of the fee.
DEBT SERVICE COMPONENT - In addition to the buy-in component, a debt service component was
also developed. This component accounts for the principal on existing assets. By segregating
the debt service out, the cost can be clearly identified and calculated appropriately. To avoid
double-counting of the assets financed with debt, the future principal associated with those
assets would be deducted from the existing infrastructure value.
The City has three outstanding debt issues for the wastewater system. They are the WRRF
Energy Efficiency Project, Tank Farm Lift Station Financing, and a second Tank Farm Lift Station
Financing. The total debt service eligible is $17 million for wastewater. Further detail can be
seen in Exhibit S-5 of the Wastewater Technical Appendix.
OTHER COMPONENTS - In addition to the existing or buy-in component and debt service
component, capital fund reserves were determined to be capacity and connection fee-related.
These components are considered to be asset valuation adjustments to the overall wastewater
system since they are capacity infrastructure costs that relate to the wastewater system as a
whole. The total capacity and connection fee eligible fund reserve is $28 million for wastewater
as current customers have contributed this revenue source over time. Further detail can be
seen on Exhibit S-6 of the Wastewater Technical Appendix.
FUTURE COMPONENTS –An important requirement for a capacity and connection fee study is the
connection between the anticipated future growth on the system and the required facilities
needed to accommodate that growth. For purposes of this study, the City’s current Capital
Improvement Plan (CIP) provided future projects. The City staff reviewed the current capital
improvement plan and updated it with the best available information. Capital improvements
that were growth-related were included in the wastewater capacity fee calculation and totaled
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Determination of the City’s Wastewater Capacity and Connection Fees 34
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
approximately $48 million through 2025. The WRRF project eligible capacity and connection
fee costs were $24.7 million or approximately 51% of the future eligible projects costs. Future
growth was approximately 16% based on growth EDUs (5,821 future EDUs/36,791 total existing
and future EDUs = 16%). Exhibit S-7 of the Wastewater Technical Appendix contains the details
of this portion of the fee.
5.5 Proposed Wastewater Capacity and Connection Fee
Based on the sum of the component costs calculated above, the allowable wastewater capacity
and connection fee were determined. “Allowable” refers to the concept that the calculated
capacity and connection fee shown on Table 5-4 are the City’s cost-based capacity and
connection fee. The City, as a matter of policy, may charge any amount up to the allowable
capacity and connection fee, but not an amount in excess of the calculated fee. Charging an
amount greater than the allowable capacity and connection fee would not meet the nexus test
of a cost-based capacity and connection fee. Details are provided in Exhibit S-1 for Wastewater
of the Technical Appendix.
Table 5 – 4
Summary of Allowable Wastewater Capacity and Connection Fee ($/EDU)
Total “Allowable”
Wastewater Capacity and
Connection Fee
Total Existing Plant (RCNLD) $149,047,830
Less: Outstanding Debt Principal ($17,096,754)
Plus: Reserves $28,271,2583
Total Existing Plant $160,222,334
Total EDUs 36,791
Total Existing Capacity and Connection Fee per EDU $4,354
Total Future Plant $248,010,131
Total Future EDUs 5,821
Total Future Capacity and Connection Fee per EDU $8,248
Net Allowable Capacity and Connection Fee per EDU $12,602
As can be seen, the City’s total wastewater capacity and connection fee is $12,602 based on the
value of the capacity in the existing system and future improvements (capital) necessary to
serve new growth and expansion on the system. Provided below in Table 5-5 is a summary of
the fee between existing-related wastewater facilities and expansion-related wastewater
facilities.
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Determination of the City’s Wastewater Capacity and Connection Fees 35
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 5 – 5
Allowable Wastewater Capacity and Connection Fee Summarized by
Existing and Expansion Components $/EDU)
Total “Allowable”
Wastewater
Capacity Fee
% of
Total
Existing Plant Related $4,354 34.5%
Expansion Plant Related 8,248 65.5%
Total Allowable Capacity and Connection Fee ($/EDU) $12,602 100.0%
As can be seen, approximately 34.5% of the wastewater capacity and connection fee is related
to the City’s existing facilities.
The City charges new customers connecting to the wastewater system a one-time wastewater
capacity and connection fee. The fee varies by customer type but, in all cases, it is intended to
reimburse the existing customers for their portion of the system that has been funded through
rates over time on a per EDU basis. The current ordinance code provides a wastewater capacity
and connection fee according to type of use. The EDU is based on a residential customer and
applied to other customer classes based on generally accepted flow assumptions by type.
On February 7, 2017, the City Council directed the following options for the wastewater
capacity and connection fee.
x Option 1 - Utilize a methodology which includes debt-financed infrastructure only (2013
methodology).
x Option 2 - Utilize a methodology that includes fair share buy-in to both existing and
future infrastructure.
x Option 3 - Option 1 with area-specific wastewater catchment area fees eliminated in
favor on one citywide wastewater capacity and connection fee.
x Option 4 - Option 2 with area-specific wastewater catchment area fees eliminated in
favor on one citywide wastewater capacity and connection fee
Option 1 - The fees calculated in Option 1 are based on a similar methodology to the 2013 Fee
Study where only specific growth projects and financing costs are included in the fee
calculation. This option reflects the increased capital costs of these debt-financed projects as
well as growth related projects. Option 1 does not include a buy-in component to existing
wastewater infrastructure. The capacity and connection fee under Option 1 is $8,165 per EDU.
The catchment area fees would be in addition to the city wide fee.
This option does not include all wastewater infrastructure necessary to serve new development
or offer the greatest protection to the wastewater ratepayer. Therefore it is not recommend.
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Determination of the City’s Wastewater Capacity and Connection Fees 36
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Option 2 - The wastewater capacity and connection fees calculated for Option 2 are based on a
methodology that values the cost of all existing and future wastewater assets, as outlined in
this Report. The growth related assets are attributed to existing and future development, 84
percent and 16 percent. This split is based on future EDUs to total EDUs (5,821/36,971 = 16%).
The capacity and connection fee under Option 2 is $9,522 per EDU and additional wastewater
catchment area fees would apply, where applicable.
Option 3 - The wastewater capacity and connection fees calculated for Option 3 include those
fees calculated in Option 1, and add the cost of all catchment area improvements. In this
option, the approximately $15 million in capital improvements would be attributed to all
approximately 5,800 future EDUs in the City. The capacity and connection fee under Option 2 is
$10,721 per EDU.
Option 3 wastewater capacity and connection fee is not being recommended. Similar to Option
1, Option 3 does not include all wastewater infrastructure necessary to serve new development
and thereby does not offer the greatest protection to the wastewater ratepayer.
Option 4 – This option uses the methodology established for Option 2, and detailed in this
Report) with the catchments area improvement costs included in total, for a single wastewater
capacity and connection fee.
The Option 4 wastewater capacity and connection fee, at $12,602 per EDU, is the
recommended fee as this fee represents the costs associated with both existing and future
infrastructure needed to serve future development, offers the greatest protection to the
wastewater ratepayer, and simplifies implementation of the City’s wastewater capacity and
connection fees.
The City’s proposed wastewater capacity and connection fees for Options 1, 2, 3 and 4 are
shown below in Table 5-6. Options 1 and 2 are only a city wide fee and the additional
catchment fee shown in Table 5-7 would apply. Options 3 and 4 are a full cost fee and include
catchment costs.
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Determination of the City’s Wastewater Capacity and Connection Fees 37
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 5 - 6
Options 1,2 , 3, and 4
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Type of Use
Equiv.
Dwelling
Unit (EDU)
Option 1
City
Wide [1]
Option 2
City
Wide [1]
Option 3
Full Cost [2]
Option 4
Full Cost [2]
Residential (per unit)
Residential [3] 1.00 $8,165 $9,522 $10,721 $12,602
Residential [3] 0.70 5,715 6,666 7,505 8,821
Mobile Home 0.60 4,899 5,713 6,433 7,561
Studio Unit 0.30 2,449 2,857 3,216 3,781
Non-Residential
5/8” to 3/4" 1.00 $8,165 $9,522
1-inch 1.70 13,880 16,188 $10,721 $12,602
1-1/2 inch 3.40 27,759 32,375 18,226 21,423
2-inch 5.40 44,088 51,420 36,452 42,847
3-inch 10.70 87,360 101,887 57,895 68,051
4-inch 16.70 136,347 159,021 114,718 134,841
6-inch 33.40 272,695 318,041 179,046 210,453
[1] City wide does not include additional catchment fee.
[2] Option 3 and 4 include catchment area costs and are a full cost fee.
[3] Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
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Determination of the City’s Wastewater Capacity and Connection Fees 38
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
Table 5 – 7
Option 1 and 2 - Additional Catchment Area Charges
Wastewater Capacity and Connection Fees – $/Equivalent Dwelling Unit (EDU)
Additional Catchment Area Charges [1]
Type of Use
Margarita
Tank
Farm
Silver
City
Calle
Joaquin
Laguna
Airport
[2]
Foothill
[2]
Buckley
[2]
Residential (per unit)
Residential [3] $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
Residential [3] 2,681 2,234 1,700 2,029 304 4,460 15,623 450
Mobile Home 2,298 1,915 1,457 1,739 261 3,823 13,391 386
Studio Unit 1,149 958 729 870 130 1,912 6,696 193
Non-Residential
5/8” to 3/4" $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
1-inch 6,511 5,426 4,129 4,927 738 10,833 37,943 1,093
1-1/2 inch 13,022 10,852 8,259 9,855 1,477 21,665 75,885 2,187
2-inch 20,683 17,236 13,117 15,651 2,345 34,409 120,523 3,473
3-inch 40,982 34,153 25,990 31,013 4,647 68,181 238,815 6,882
4-inch 63,963 53,304 40,565 48,403 7,253 106,414 372,730 10,741
6-inch 127,925 106,608 81,129 96,807 14,506 212,828 745,460 21,483
[1] – These fees are in addition to the city wide fees in Options 1 and 2.
[2] – Airport, Foothills, and Buckley are new fees.
[3] – Residential EDU unit defined as 1.0 = 801 square feet or more; 0.70 = 451 to 800 square feet.
5.6 Key Wastewater Capacity and Connection Fee Assumptions
In the development of the capacity and connection fee for the City’s wastewater utility, a
number of key assumptions were utilized. These are as follows:
The City’s wastewater capacity and connection fee was developed based upon the City’s
current EDUs and current capacity costs, as well as the estimated future EDUs and the
needed capital improvements to serve the future EDUs.
The City’s asset records were used to determine the existing infrastructure assets and
updated to replacement cost less depreciation.
The City provided the most recent CIP for future expansion improvements.
The City determined the portion of future improvements that were growth-related.
The base year for the CIP was assumed at 2016.
The calculation of the debt credit component included current outstanding principal
debt service payments on existing assets.
5.7 Implementation of the Wastewater Capacity and Connection Fee
HDR would recommend that the City continue to adjust the wastewater capacity and
connection fees on an annual basis. The City currently uses the Consumer Price Index (CPI) for
this update. This method of escalating the City’s fees should be used for no more than a five-
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Determination of the City’s Wastewater Capacity and Connection Fees 39
City of San Luis Obispo – Water and Wastewater Capacity and Connection Fees
year period. After five years, HDR recommends that the City update the wastewater capacity
and connection fees based on the actual cost of infrastructure and any new planned facilities
that would be contained in an updated master plan or CIP.
It is further recommended the City to consider using the Engineering News Record Construction
Cost Index (ENR-CCI) to reflect the cost of interest and inflation instead of the CPI. The ENR-CCI
is a reliable and consistent indices that tracks construction costs and is published every month
showing the national average of twenty cities.
5.8 Consultant Recommendations
Based on our review and analysis of the City’s wastewater capacity and connection fee, HDR
makes the following recommendations:
The City should revise and update its wastewater capacity and connection fee to the
calculated wastewater capacity and connection fee shown in this Report. The fee is
applicable for any new customers connecting to the system, or an existing customer
requesting/requiring additional capacity. The adopted wastewater capacity and connection
fee shall not exceed the calculated fee as set forth in this Report.
The wastewater gallon per day per equivalent dwelling unit was adjusted from 150 gpd to
135 gpd per EDU and is reflective the City’s changing consumption/usage patterns.
The City should make periodic (annual) adjustments to the wastewater capacity and
connection fees based on changes in the Engineering News Record Construction Cost Index.
This is consistent with the City’s past practices using the CPI for these adjustments, as they
relate to these fees.
The City should update the actual calculations for the wastewater capacity and connection
fee based on the methodology as approved by the resolution or ordinance setting forth the
methodology for capacity and connection fee at such time when a new capital
improvement plan, facilities plan, master plan or a comparable plan is approved or updated
by the City.
5.9 Summary
The development of the wastewater capacity and connection fee by HDR utilized generally
accepted engineering and ratemaking principles, while applying City specific planning, asset and
customer information.
City should have legal counsel review the Report and for consistency with City and State
applicable laws and regulations.
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Technical Appendices
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Water Capacity and Connection Fee
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1 City of San Luis Obispo - Water
2 Exhibit W-1
3 Development of Capacity and Connection Fee
4
5 Plant Description
Estimated
Replacement
Cost
Eligible
Replacement
Cost New (RCN)
Eligible
Replacement
Cost New Less
Depreciation
(RCNLD) EDUs Total Fee
6 Existing Plant [1]
7 Supply $284,894,773 $62,841,035 $60,234,226 36,791 $10,348
7 Treatment 83,831,215 83,831,215 73,535,215 36,791 1,999
8 Distribution 249,712,833 228,321,833 107,869,887 36,791 2,932
9
10 Total Existing Plant $618,438,822 $374,994,084 $241,639,328 36,791 $15,279
11
12 Less: Outstanding Debt Principal (2)($53,702,781) 36,791 ($1,459)
13
14 Plus: Capital Fund Reserves [3]$16,079,051 36,791 $437
15
16 Total Net Existing Plant $618,438,822 $374,994,084 $204,015,598 36,791 $14,257
17
18 Future Plant [4]
19 Supply $6,726,460 $1,414,334 5,821 $243
20 Treatment 29,416,066 4,706,572 5,821 809
21 Distribution 2,740,963 2,740,963 5,821 471
22
23 Total Future Plant $38,883,489 $0 $8,861,869 5,821 $1,523
24
25
26
27 Total Existing and Future Plant [5]$657,322,311 $374,994,084 $212,877,467 $15,780
28
29 Existing EDUs (Includes Vested/Pending Projects)30,970
30 Future EDUs 5,821
31 Total Existing and Future EDUs 36,791
32
33
34 Notes:
35 [1] Existing plant based on replacement cost less depreciation.
36 [2] Remaining principal as of June 2016. See Exhibit W-6.
37 [3] Cash reserves as of June 2016 which are fee eligible. See Exhibit W-7.
38 [4] Future plant based on City capital improvement plan in 2016 dollars.
39 [5] Based on "combined" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 273.
Page 1 of 16 Packet Pg 380
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1 City of San Luis Obispo - Water
2 Exhibit W-2
3 Development of EDUs
4
5 EDU = Equivalent Dwelling Unit
6
7
8 5,400,000 Future Average Dry Weather Flow/WRRF Design Capacity
9 470,000 Cal Poly Average Dry Weather Flow/Capacity share of WRRF
10 4,930,000 City owned WRRF Capacity
11 134 EDU gpd Rate [1]
12 36,791 Total City Existing and Future EDU
13 4,150,000 Existing Average Dry Weather Flow, plus pending increment
14 30,970 Existing EDU (Includes Vested/Pending Projects)
15 5,821 Future EDU
16
17
18
19 Notes:
20 [1] City provided gallons per day (gpd) based on a a three-year average from 2012-13 to 2014-15.
21 [2] Future growth is 16% of total EDU, 5,821/36,791 = 16%
Future EDU Calc (derived by using 5.4 mgd design capacity for WRRF)
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1 City of San Luis Obispo - Water Page 1 of 2
2 Exhibit W-3
3 Supply Capacity and Connection Fee
4
5
6 System Type Function Description Install Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
7 EXISTING PLANT [1]
8 WRR Pennington Dam Pennington Creek Dam 6/30/1999 $235,617 1.00 $235,617 17 23%75 $235,617 22.7%100%$235,617 $182,210
9 WRR Reservoir Whale Rock Reservoir 1961 7,000,000 1.00 100,000,000 55 73%75 100,000,000 73.3%0%0 0
10 WRR Reservoir Land (1400 Acres Land)1960 0 1.00 0 56 75%75 0 74.7%0%0 0
11 WRR Reservoir Shop structures (2,400 SF)1960 0 1.00 480,000 56 187%30 480,000 100.0%0%0 0
12 WRR Reservoir Security fencing 1960 0 1.00 20,000 56 224%25 20,000 100.0%0%0 0
13 WRR Reservoir Fencing 1960 0 1.00 370,000 56 224%25 370,000 100.0%0%0 0
14 WRR Reservoir Roads 1960 0 1.00 0 56 140%40 0 100.0%0%0 0
15 WRR Reservoir Inlet structure 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
16 WRR Reservoir Outlet structure 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
17 WRR Reservoir Spillway 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
18 WRR Reservoir Pipe 1960 0 1.00 0 56 112%50 0 100.0%0%0 0
19 WRR Reservoir Monitoring instruments 1960 0 1.00 0 56 224%25 0 100.0%0%0 0
20 WRR Reservoir Added instruments 1984 20,000 1.00 50,000 32 128%25 50,000 100.0%0%0 0
21 WRR Reservoir Inlet valves 2003 200,000 1.00 300,000 13 43%30 300,000 43.3%0%0 0
22 WRR Reservoir 24" Khrone ultrasonic meter 2010 12,000 1.00 20,000 6 30%20 20,000 30.0%0%0 0
23 WRR Reservoir Residence (1,150 SF)1930 0 1.00 250,000 86 172%50 250,000 100.0%0%0 0
24 WRR Reservoir Well 2016 3,000 1.00 3,500 0 0%30 3,500 0.0%0%0 0
25 WRR Pump Station A Pump Station A 1998 0 1.00 0 18 90%20 0 90.0%0%0 0
26 WRR Pump Station A Land 1998 0 1.00 0 18 24%75 0 24.0%0%0 0
27 WRR Pump Station A Building 1998 600,000 1.00 2,000,000 18 60%30 2,000,000 60.0%0%0 0
28 WRR Pump Station A Fencing 1998 0 1.00 14,000 18 72%25 14,000 72.0%0%0 0
29 WRR Pump Station A Pumps, valves, motor controls 1998 0 1.00 0 18 90%20 0 90.0%0%0 0
30 WRR Pump Station A Premium efficiency motors 2005 70,000 1.00 100,000 11 55%20 100,000 55.0%0%0 0
31 WRR Pump Station B Pump Station B 1998 0 1.00 0 18 72%25 0 72.0%0%0 0
32 WRR Pump Station B Land 1998 0 1.00 0 18 24%75 0 24.0%0%0 0
33 WRR Pump Station B Building 1998 600,000 1.00 2,000,000 18 60%30 2,000,000 60.0%0%0 0
34 WRR Pump Station B Fencing 1998 0 1.00 14,000 18 72%25 14,000 72.0%0%0 0
35 WRR Pump Station B Pumps, valves, motor controls 1998 0 1.00 0 18 90%20 0 90.0%0%0 0
36 WRR Pump Station B Premium efficiency motors 2005 70,000 1.00 100,000 11 55%20 100,000 55.0%0%0 0
37 WRR Pump Station B Generator 1998 75,000 1.00 100,000 18 90%20 100,000 90.0%0%0 0
38 WRR Building Radio repeater building 1960 0 1.00 0 56 187%30 0 100.0%0%0 0
39 WRR Building Building 1960 0 1.00 25,000 56 187%30 25,000 100.0%0%0 0
40 WRR Building Antennas 2015 0 1.00 10,000 1 3%30 10,000 3.3%0%0 0
41 WRR Building Radio hardware 2015 7,500 1.00 8,000 1 10%10 8,000 10.0%0%0 0
42 WRR Building Microwave radio system 2015 96,000 1.00 150,000 1 7%15 150,000 6.7%0%0 0
43 WRR Pipeline Approx. 18 miles of 30" PCCP pipe 1960 2,000,000 1.00 16,000,000 56 75%75 16,000,000 74.7%0%0 0
44 WRR Pipeline Five-8" surge control valves 1960 0 1.00 30,000 56 187%30 30,000 100.0%0%0 0
45 WRR Pipeline 57-6" blow off valves 1961 0 1.00 28,500 55 183%30 28,500 100.0%0%0 0
46 WRR Pipeline 60 ARV valves 1961 0 1.00 24,000 55 183%30 24,000 100.0%0%0 0
47 WRR Pipeline 39 Cathodic protection stations 1961 0 1.00 78,000 55 183%30 78,000 100.0%0%0 0
48 WRR Pipeline Four-30" valves 1998 0 1.00 120,000 18 60%30 120,000 60.0%0%0 0
49 WRR Rolling Stock 1998 17' Boston Whaler 1996 6,500 1.00 20,000 20 100%20 20,000 100.0%0%0 0
50 WRR Rolling Stock 2001 Jeep Cherokee 2001 0 1.00 32,000 15 136%11 32,000 100.0%0%0 0
51 WRR Rolling Stock 18-foot Equipment trailer 2004 0 1.00 8,000 12 67%18 8,000 66.7%0%0 0
52 WRR Rolling Stock 2004 JD tractor model 4710 2004 37,000 1.00 54,000 12 80%15 54,000 80.0%0%0 0
53 WRR Rolling Stock 2014 Kawasaki Gator utility vehicle 2014 14,000 1.00 18,000 2 20%10 18,000 20.0%0%0 0
54 WRR Rolling Stock 2016 F150 4x4 truck 2016 32,000 1.00 44,000 0 0%11 44,000 0.0%0%0 0
55 WRR Rolling Stock 2016 F350 4X4 truck 2016 60,000 1.00 85,000 0 0%12 85,000 0.0%0%0 0
56 SR Salinas Reservoir Micro surface Dam Access Road 6/30/2013 183,964 1.09 200,009 3 8%40 200,009 7.5%0%0 0
57 SR Salinas Reservoir Micro surface Booster Station Access Road 6/30/2013 78,986 1.09 85,875 3 12%25 85,875 12.0%0%0 0
58 SR Salinas Reservoir Replace Existing Boat 6/30/2013 20,680 1.09 22,484 3 20%15 22,484 20.0%0%0 0
59 SR Salinas Reservoir Cathodic Protection Inspection of Pipe 6/30/2013 10,637 1.09 11,565 3 15%20 11,565 15.0%0%0 0
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1 City of San Luis Obispo - Water Page 2 of 2
2 Exhibit W-3
3 Supply Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New
(RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
60 SR Salinas Reservoir Booster Station Reservoir Liner 6/30/2013 294,244 1.09 319,908 3 15%20 319,908 15.0%0%0 0
61 SR Salinas Reservoir Security Improvements 6/30/2013 20,680 1.09 22,484 3 15%20 22,484 15.0%0%0 0
62 SR Salinas Reservoir Booster Office Remodel/Repair 6/30/2013 679,713 1.09 738,997 3 6%50 738,997 6.0%0%0 0
63 SR Salinas Reservoir Salinas Dam Water Line Modification 6/30/2013 8,840 1.09 9,611 3 6%50 9,611 6.0%0%0 0
64 SR Salinas Reservoir Booster Station Environmental Studies 6/30/2013 60,026 1.09 65,261 3 15%20 65,261 15.0%0%0 0
65 SR Salinas Reservoir Army Corp Inspection Repairs 6/30/2013 76,697 1.09 83,386 3 10%30 83,386 10.0%0%0 0
66 SR Salinas Reservoir Rewire Electrical Circuit at Dam 6/30/2013 5,170 1.09 5,621 3 12%25 5,621 12.0%0%0 0
67 SR Salinas Reservoir Equipment Replacement 6/30/2013 10,340 1.09 11,242 3 15%20 11,242 15.0%0%0 0
68 NR Naci Reservoir Nacimiento Pipeline Project 6/30/2013 83,740,000 1.09 91,043,780 3 4%75 91,043,780 4.0%39%35,507,074 34,086,791
69 Water Reuse Water Reuse Water Reuse Project (W/ $2.9M Grant)6/30/2006 9,308,843 1.34 12,465,022 10 20%50 12,465,022 20.0%39%4,861,359 3,889,087
70 Water Reuse Water Reuse MCC Building R 2004 0 1.00 0 12 24%50 0 24.0%39%0 0
71 Water Reuse Water Reuse Chlorine Contact Channels 3 And 4 2004 0 1.00 0 12 40%30 0 40.0%39%0 0
72 Water Reuse Water Reuse Storage Tank 2004 0 1.00 0 12 48%25 0 48.0%39%0 0
73 Water Reuse Water Reuse Wharf Head Hydrant 2004 0 1.00 5,000 12 48%25 5,000 48.0%39%1,950 1,014
74 Water Reuse Water Reuse Pipeline, 9.2 miles of pipe 2004 1,708,459 1.00 1,708,459 12 24%50 1,708,459 24.0%39%666,299 506,387
75 TOTAL EXISTING PLANT $229,590,322 $41,272,299 $38,665,490
76
77
78 PLUS: Interest on Debt Water Reuse Project [2]06/30/06 $2,000,000 1.34 0 10 20%50 $2,678,103 39%$1,044,460 $1,044,460
79 Interest on Debt Nacimiento Pipeline Project [2]06/30/13 52,626,348 1.00 0 3 4%75 52,626,348 39%20,524,276 20,524,276
80 $55,304,451 $21,568,736 $21,568,736
81
82 TOTAL EXISTING PLANT $284,894,773 $62,841,035 $60,234,226
83
84
85 Total Future EDUs [4]5,821
86
87 TOTAL EXISTING SUPPLY PLANT $/EDU $10,348
88
89
90 FUTURE PLANT [3]Total
% Fee
Eligible
% Eligible Cost
in 2016 $
91 Source of Supply
92 Groundwater (Study)$70,000 39.0%$27,300
93 Groundwater (DN)175,000 39.0%68,250
94 Groundwater (CN)1,000,000 39.0%390,000
95 Groundwater (CM)150,000 39.0%58,500
96 Groundwater (ER)75,000 39.0%29,250
97 Recycled Water Projects 5,256,460 16.0%841,034
98 TOTAL FUTURE PLANT $6,726,460 $1,414,334
99
100 Total Future EDUs [4] 5,821
101
102 TOTAL FUTURE SUPPLY PLANT $/EDU $243
103
104
105
106 TOTAL EXISTING AND FUTURE SUPPLY PLANT $/EDU $10,591
107
108
109
110 Notes:
111 [1] Existing plant based on replacement cost less deprecation.
112 [2] See Exhibit W-6 for interest on Reuse project and Naci pipeline debt.
113 [3] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit W-8.
114 [4] See Exhibit W-2 for projected supply capacity.
115 [5] See Exhibit W-2 for average daily flow per EDU.
Page 4 of 16 Packet Pg 383
11
1 City of San Luis Obispo - Water Page 1 of 2
2 Exhibit W-4
3 Treatment Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New
(RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
7 EXISTING PLANT [1]
8 Land Land 83181 06/30/67 $3,200 9.66 $30,925 0.0% 100% $30,925 $30,925
9 Land Land 83182 06/30/09 8,600 1.21 10,410 0.0% 100% 10,410 10,410
10 Land Land 83183 06/30/63 2,100 11.52 24,191 0.0% 100% 24,191 24,191
11 Land Land 83184 06/30/60 3,400 12.60 42,827 0.0% 100% 42,827 42,827
12 Land Land 83185 06/30/11 70 1.14 80 0.0% 100%80 80
13 Land Land 83186 06/30/69 1,100 8.18 8,997 0.0% 100%8,997 8,997
14 Land Land 83187 06/30/69 2,000 8.18 16,358 0.0% 100% 16,358 16,358
15 Land Land 83188 06/30/00 10,520 1.67 17,552 0.0% 100% 17,552 17,552
16 Land Land 83190 06/30/74 19,100 5.14 98,141 0.0% 100% 98,141 98,141
17 Land Land 83191 06/30/60 2,000 12.60 25,192 0.0% 100% 25,192 25,192
18 Land Land 83192 06/30/09 6,000 1.21 7,263 0.0% 100%7,263 7,263
19 Land Land 83193 06/30/10 16,400 1.18 19,338 0.0% 100% 19,338 19,338
20 Land Land 83194 06/30/09 11,900 1.21 14,404 0.0% 100% 14,404 14,404
21 Land Land 83195 06/30/74 28,300 5.14 145,412 0.0% 100% 145,412 145,412
22 Land Land 83196 06/30/76 29,100 4.32 125,796 0.0% 100% 125,796 125,796
23 Land Land 83197 06/30/69 41,000 8.18 335,343 0.0% 100% 335,343 335,343
24 WTP Treatment WTP with 16 MGD Capacity 06/30/05 1.00 64,350,000 8 0 50 64,350,000 16.0% 100% 64,350,000 54,054,000
25 WTP Tanks Clearwell #1 - 3.0 MG welded steel tank 06/30/05 0 1.00 0 8 0 25 0 32.0% 100%0 0
26 WTP Tanks Clearwell #2 - 2.0 MG welded steel tank 06/30/05 0 1.00 0 8 0 25 0 32.0% 100%0 0
27 WTP Wells Pacific Beach Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
28 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
29 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
30 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
31 WTP Wells Fire Station #4 Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
32 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
33 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
34 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
35 WTP Wells Mitchell Park Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
36 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
37 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
38 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
39 WTP Wells Corp Yard Well 0 0.00 0 0 0 0 0 0.0% 0%0 0
40 WTP Wells Well 06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
41 WTP Wells Building 06/10/05 0 1.00 0 28 1 50 0 56.0% 100%0 0
42 WTP Wells Piping, etc.06/10/05 0 1.00 0 28 0 75 0 37.3% 100%0 0
43 TOTAL EXISTING PLANT $65,272,229 $65,272,229 $54,976,229
44
45 PLUS: Interest on Debt Water Treatment Upgrade 06/30/05 $13,859,798 1.34 0 0 0 50 $18,558,986 100% $18,558,986 $18,558,986
46
47 TOTAL EXISTING PLANT $83,831,215 $83,831,215 $73,535,215
48
49 Total Future EDUs [4]36,791
50
51 TOTAL EXISTING TREATMENT PLANT $/EDU $1,999
Page 5 of 16 Packet Pg 384
11
1 City of San Luis Obispo - Water Page 2 of 2
2 Exhibit W-4
3 Treatment Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date Original Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New
(RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
53
54 FUTURE PLANT [3]Total
% Fee
Eligible
% Eligible Cost
in 2016 $
55 Water Treatment
56 Major Facility Maintenance $1,637,000 16%$261,920
57 Ozone System Maint 191,523 16%30,644
58 Enc-Xylem 44,610 16%7,138
59 Chemical System Maint 54,000 16%8,640
60 Air Compressor & Dryer Maint 50,000 16%8,000
61 Replace Air Compressor-Design 10,000 16%1,600
62 Misc -free 35 16%6
63 Stenner Canyon Raw Waterline Replacement (Study)7,123 16%1,140
64 Stenner Canyon Raw Waterline Replacement (Design)35,000 16%5,600
65 Stenner Canyon Raw Waterline Replacement (Const)100,000 16%16,000
66 Package Thickner (Construction and CM)50,000 16%8,000
67 Wash Water Tank #1 (Design)40,000 16%6,400
68 Wash Water Tank #1 (Construction)250,000 16%40,000
69 Wash Water Tank #1 (CM)25,000 16%4,000
70 Reservoir 2 Replacement (Study)24 16%4
71 Enc-Nunley 44,739 16%7,158
72 Reservoir 2 Replacement (Design)344,400 16%55,104
73 Reservoir 2 (Construction)10,000,000 16%1,600,000
74 Reservoir 2 (Const Mgmt) 500,000 16%80,000
75 SST PEA (Study)150,000 16%24,000
76 SST IGA (Design)300,000 16%48,000
77 SST - Hydro and Ozone (Const) 13,000,000 16%2,080,000
78 SST - Hydro and Ozone (Const Mgmt) 1,300,000 16%208,000
79 Treatment Plant Ozone Generation Upgrade 100,000 16%16,000
80 Fleet Replacement: Service Body Truck 48,112 16%7,698
81 Forebay and Culvert Rehab (Study)30,000 16%4,800
82 Forebay and Culvert Rehab (Design)80,000 16%12,800
83 Forebay and Culvert Rehab (Const)800,000 16%128,000
84 Forebay and Culvert Rehab (Const Mgmt)80,000 16%12,800
85 Treatment Plant Ozone Generation Upgrade 100,000 16%16,000
86 Fleet Replacement Forecast 44,500 16%7,120
87 TOTAL FUTURE PLANT $29,416,066 $4,706,572
88
89 Total Future EDUs [4] 5,821
90
91 TOTAL FUTURE TREATMENT PLANT $/EDU $809
92
93
94
95 TOTAL EXISTING AND FUTURE TREATMENT PLANT $/EDU $2,808
96
97
98
99 Notes:
100 [1] Existing plant based on replacement cost less deprecation. See Exhibit W-4A for WTP estimated replacement cost.
101 [2] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit W-8.
102 [3] See Exhibit W-2 for treatment capacity.
103 [4] See Exhibit W-2 for average daily flow per EDU.
Page 6 of 16 Packet Pg 385
11
1 City of San Luis Obispo - Water Page 1 of 2
2 Exhibit W-5
3 Distribution Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date
Original
Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
7 EXISTING PLANT [1]
8 Meters Meters 5/8"2016 $0 1.00 $0 0 0% 20 $0 0.0% 100%$0 $0
9 Meters Meters 3/4"2016 0 1.00 0 0 0% 20 0 0.0% 100%0 0
10 Meters Meters 1"2016 1.00 0 0 0% 20 0 0.0% 100%0 0
11 Meters Meters 1.5"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
12 Meters Meters 2"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
13 Meters Meters 3"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
14 Meters Meters 4"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
15 Meters Meters 6"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
16 Meters Meters 8"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
17 Meters Meters 10"2016 1.00 0 0 0% 15 0 0.0% 100%0 0
18 Meters Meters Unknown 2016 1.00 0 0 0% 15 0 0.0% 100%0 0
19 Fire Hydrants Fire Hydrants 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
20 Fire Hydrants Fire Hydrants 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
21 Fire Hydrants Fire Hydrants 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
22 Fire Hydrants Fire Hydrants Gate 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
23 Fire Hydrants Fire Hydrants Butterfly 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
24 Fire Hydrants Fire Hydrants Unknown 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
25 Fire Hydrants Fire Hydrants Air Relief 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
26 Fire Hydrants Fire Hydrants Blow Off Assemblies 2016 1.00 0 20 0% 100 0 0.0% 100%0 0
27 Mains Potable Water Mains 1970 1.00 214,438,193 50 50% 100 214,438,193 61.7%91% 194,701,193 97,350,597
28 Tanks Tanks Alrita 1 0.00066 MG 2007 331,250 1.00 1,320 9 14% 65 1,320 13.8% 100%1,320 1,137
29 Tanks Tanks Alrita 2 0.00066 MG 2007 331,250 1.00 1,320 9 14% 65 1,320 13.8% 100%1,320 1,137
30 Tanks Tanks Bishop 0.75 MG 2005 1,560,500 1.00 1,500,000 11 17% 65 1,500,000 16.9% 100% 1,500,000 1,246,154
31 Tanks Tanks Edna Saddle 4.0 MG 1974 8,000,000 1.00 8,000,000 42 65% 65 8,000,000 64.6% 100% 8,000,000 2,830,769
32 Tanks Tanks Ferrini 0.16 MG 1985 320,000 1.00 320,000 31 48% 65 320,000 47.7% 100% 320,000 167,385
33 Tanks Tanks Islay 0.35 MG 1996 720,000 1.00 700,000 20 31% 65 700,000 30.8% 100% 700,000 484,615
34 Tanks Tanks Rosemont 0.046 MG 1994 92,000 1.00 92,000 22 34% 65 92,000 33.8% 100%92,000 60,862
35 Tanks Tanks Serrano 0.10 MG 1967 200,000 1.00 200,000 49 75% 65 200,000 75.4% 100% 200,000 49,231
36 Tanks Tanks Slack 0.077 MG 1955 154,000 1.00 154,000 61 94% 65 154,000 93.8% 0%0 0
37 Tanks Tanks Terrace Hill 0.75 MG 1959 1,500,000 1.00 1,500,000 57 88% 65 1,500,000 87.7% 0%0 0
38 Reservoir Reservoir Reservoir 1 7.5 MG 1939 1.00 10,000,000 78 78% 100 10,000,000 78.0% 100% 10,000,000 2,200,000
39 Reservoir Reservoir Reservoir 2 7.5 MG 1942 1.00 10,000,000 75 75% 100 10,000,000 75.0% 100% 10,000,000 2,500,000
40 Pump Station Pump Station Alrita 2007 1.00 300,000 60 80% 75 300,000 80.0% 100% 300,000 60,000
41 Pump Station Pump Station Bishop 1951 1.00 300,000 70 93% 75 300,000 93.3% 100% 300,000 20,000
42 Pump Station Pump Station Bressi 1967 1.00 300,000 65 87% 75 300,000 86.7% 100% 300,000 40,000
43 Pump Station Pump Station Ferrini 1985 1.00 300,000 70 93% 75 300,000 93.3% 100% 300,000 20,000
44 Pump Station Pump Station McCollum 1955 1.00 300,000 70 93% 75 300,000 93.3% 100% 300,000 20,000
45 Pump Station Pump Station Reservoir Canyon 1995 1.00 300,000 67 89% 75 300,000 89.3% 100% 300,000 32,000
46 Pump Station Pump Station Rosemont 2013 1.00 300,000 55 73% 75 300,000 73.3% 100% 300,000 80,000
47 PRV PRV Catalina 2016 1.00 40,000 0 0% 30 40,000 0.0% 100%40,000 40,000
48 PRV PRV Bishop CV 2016 1.00 15,000 0 0% 30 15,000 0.0% 100%15,000 15,000
49 PRV PRV California 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
50 PRV PRV Ella 2016 1.00 15,000 0 0% 30 15,000 0.0% 100%15,000 15,000
51 PRV PRV Madonna 2016 1.00 100,000 0 0% 30 100,000 0.0% 100% 100,000 100,000
Page 7 of 16 Packet Pg 386
11
1 City of San Luis Obispo - Water Page 2 of 2
2 Exhibit W-5
3 Distribution Capacity and Connection Fee
4
5
6 System Type Function Description
Install
Date
Original
Cost
ENR
Factor
Estimated
Replacement
Cost
Average
Age
(Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
52 PRV PRV McCollum 2016 1.00 10,000 0 0% 30 10,000 0.0% 100%10,000 10,000
53 PRV PRV Nipomo 2016 1.00 20,000 0 0% 30 20,000 0.0% 100%20,000 20,000
54 PRV PRV Peach 2016 1.00 200,000 0 0% 30 200,000 0.0% 100% 200,000 200,000
55 PRV PRV Grand & Wilson 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
56 PRV PRV Choro & Foothill 2016 1.00 18,000 0 0% 30 18,000 0.0% 100%18,000 18,000
57 PRV PRV Terrace Hill 2016 1.00 18,000 0 0% 30 18,000 0.0% 100%18,000 18,000
58 PRV PRV San Luis Drive 2016 1.00 10,000 0 0% 30 10,000 0.0% 100%10,000 10,000
59 PRV PRV Southwood 2016 1.00 5,000 0 0% 30 5,000 0.0% 100%5,000 5,000
60 PRV PRV Broad & Caudill 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
61 PRV PRV Patricia 2016 1.00 0 0 0% 30 0 0.0% 100%0 0
62 PRV PRV Skyline 2016 1.00 0 0 0% 30 0 0.0% 100%0 0
63 PRV PRV Industrial 2016 1.00 0 0 0% 30 0 0.0% 100%0 0
64 PRV PRV Foothill & California 2016 1.00 60,000 0 0% 30 60,000 0.0% 100%60,000 60,000
65 PRV PRV Catalina 2016 1.00 15,000 0 0% 30 15,000 0.0% 100%15,000 15,000
66 TOTAL EXISTING PLANT $249,712,833 $228,321,833 $107,869,887
67
68 Total EDUs [2] 36,791
69
70 TOTAL EXISTING DISTRIBUTION PLANT $/EDU $2,932
71
72 FUTURE PLANT [3]Cost in 2016 $
73 Total Distribution System Improvements $2,467,581
74 Total Water Customer Service Improvements 0
75 Total Utilities Service Improvements 0
76 Total Administration and Engineering Improvements 0
77 Total General for Future Planning 0
78 Total Shared Information Technology Improvements 273,382
79 TOTAL FUTURE PLANT $2,740,963
80
81 Total Future EDUs [4] 5,821
82
83 TOTAL FUTURE DISTRIBUTION PLANT $/EDU $471
84
85
86 TOTAL EXISTING AND FUTURE DISTRIBUTION PLANT $/EDU $3,403
87
88
89
90 Notes:
91 [1] Existing plant based on replacement cost less deprecation.
92 [2] See Exhibit W-2 for total EDUs.
93 [3] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit W-8.
94 [4] See Exhibit W-2 for future EDUs.
Page 8 of 16 Packet Pg 387
11
1 City of San Luis Obispo - Water
2 Exhibit W-6
3 Summary of Debt Service [1]
4
5
6 2012 Water Revenue Refunding Bonds Total
7 Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Principal
8 I. Debt Status:
9 Interest Rate
10 Principal $4,960,000 2.50%
11 Financing Term 20 30
12
13
II. Outstanding Principal
Payments:
14 2016-17 $435,000 $137,000 $572,000 $1,596,000 $3,392,512 $4,988,512 $420,748 $104,709 $525,457 $435,000 $595,948 $1,030,948 $2,886,748
15 2017-18 450,000 119,600 569,600 1,676,000 3,310,702 4,986,702 431,267 94,190 525,457 455,000 578,548 1,033,548 3,012,267
16 2018-19 470,000 101,600 571,600 1,761,000 3,224,758 4,985,758 442,049 83,408 525,457 475,000 560,348 1,035,348 3,148,049
17 2019-20 485,000 82,800 567,800 1,810,000 3,135,455 4,945,455 453,100 72,357 525,457 490,000 540,873 1,030,873 3,238,100
18 2020-21 505,000 63,400 568,400 1,906,000 3,042,523 4,948,523 464,427 61,030 525,457 515,000 520,293 1,035,293 3,390,427
19 2021-22 530,000 43,200 573,200 2,001,000 2,944,814 4,945,814 476,038 49,419 525,457 0 1,033,405 1,033,405 3,007,038
20 2022-23 550,000 22,000 572,000 2,106,000 2,842,105 4,948,105 487,939 37,518 525,457 0 1,030,400 1,030,400 3,143,939
21 2023-24 0 0 0 2,217,000 2,733,993 4,950,993 500,137 25,319 525,457 0 1,031,119 1,031,119 2,717,137
22 2024-25 0 0 0 2,327,000 2,620,353 4,947,353 512,641 12,816 525,457 0 1,030,744 1,030,744 2,839,641
23 2025-26 0 0 0 2,443,000 2,501,059 4,944,059 0 0 0 0 1,034,275 1,034,275 2,443,000
24 2026-27 0 0 0 2,568,000 2,375,739 4,943,739 0 0 0 0 1,031,494 1,031,494 2,568,000
25 2027-28 0 0 0 2,694,000 2,256,540 4,950,540 0 0 0 0 1,031,794 1,031,794 2,694,000
26 2028-29 0 0 0 2,809,000 2,138,251 4,947,251 0 0 0 0 1,030,744 1,030,744 2,809,000
27 2029-30 0 0 0 2,925,000 2,019,766 4,944,766 0 0 0 0 1,033,344 1,033,344 2,925,000
28 2030-31 0 0 0 3,055,000 1,888,521 4,943,521 0 0 0 0 1,034,369 1,034,369 3,055,000
29 2031-32 0 0 0 3,201,000 1,746,168 4,947,168 0 0 0 0 1,033,819 1,033,819 3,201,000
30 2032-33 0 0 0 3,346,000 1,600,492 4,946,492 0 0 0 0 1,030,663 1,030,663 3,346,000
31 2033-34 0 0 0 3,512,000 1,442,589 4,954,589 0 0 0 0 1,030,888 1,030,888 3,512,000
32 2034-35 0 0 0 3,668,000 1,279,293 4,947,293 0 0 0 0 1,034,263 1,034,263 3,668,000
33 2035-36 0 0 0 3,838,000 1,107,493 4,945,493 0 0 0 0 1,030,556 1,030,556 3,838,000
34 2036-37 0 0 0 4,019,000 927,691 4,946,691 0 0 0 0 0 0 4,019,000
35 2037-38 0 0 0 4,205,000 739,409 4,944,409 0 0 0 0 0 0 4,205,000
36 2038-39 0 0 0 4,396,000 552,820 4,948,820 0 0 0 0 0 0 4,396,000
37 2039-40 0 0 0 5,020,000 349,483 5,369,483 0 0 0 0 0 0 5,020,000
38 2040-41 0 0 0 5,250,000 118,221 5,368,221 0 0 0 0 0 0 5,250,000
39 Total $3,425,000 $569,600 $3,994,600 $74,349,000 $50,290,750 $124,639,750 $4,188,347 $540,766 $4,729,112 $2,370,000 $18,277,881 $20,647,881 $84,332,347
40 Less: Percent Not Eligible 39.0%39.0%
41 $28,996,110 $1,633,455 $30,629,565
42 Net Eligible $45,352,890 $2,554,891 $53,702,781
43
44 Total EDUs [2]36,791 36,791 36,791 36,791 36,791
45
46 Total Debt Service $/EDU $93 $1,233 $69 $64 $1,459
47
48
49
50 Notes:
51 [1] Debt service schedules from the City "Water Fund Analysis-working copy_2016-10-18.xlsx".
52 [2] See Exhibit W-2 for total EDUs.
Reuse - SRF Funding Repayments WTP Master Plan Improvements (Nacimiento Water Project)
2007 A Revenue Bonds
Page 9 of 16 Packet Pg 388
11
City of San Luis Obispo - Water
Exhibit W-7
Summary of Reserve Funds
For the Year Ended June 30, 2016
Type Total
% Fee
Eligible [1] $ Fee Eligible
Cash $160,747 100%$160,747
Cash & Equivalents 15,918,304 100%15,918,304
Total $16,079,051 $16,079,051
Less:
Restricted
Debt Service $1,654,826 0%$0
Subsequent year expenditures 448,499 0%0
Committed
Rate Stabilization fund $1,650,000 0%0
Contingency fund 2,950,800 0%0
Total $6,704,125 $0
Net Available Cash Reserves $9,374,926 $16,079,051
Total EDUs [2]36,791
Total Cash Reserves $/EDU $437
Notes:
[1] Balance as of CAFR June 2016.
[2] See Exhibit W-2 for total EDUs.
Page 10 of 16 Packet Pg 389
11
1 City of San Luis Obispo - Water Page 1 of 3
2 Exhibit W-8
3 Development of the Water Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible $ Fee Eligible
8
9 Water Treatment [3]
10 Major Facility Maintenance $0 $360,000 $163,000 $171,000 $179,000 $189,000 $185,000 $190,000 $200,000 $1,637,000 16%$261,920
11 Ozone System Maint 191,523 0 0 0 0 0 0 0 0 191,523 16%30,644
12 Enc-Xylem 44,610 0 0 0 0 0 0 0 0 44,610 16%7,138
13 Chemical System Maint 54,000 0 0 0 0 0 0 0 0 54,000 16%8,640
14 Air Compressor & Dryer Maint 50,000 0 0 0 0 0 0 0 0 50,000 16%8,000
15 Replace Air Compressor-Design 10,000 0 0 0 0 0 0 0 0 10,000 16%1,600
16 Misc -free 35 0 0 0 0 0 0 0 0 35 16%6
17 Stenner Canyon Raw Waterline Replacement (Study)7,123 0 0 0 0 0 0 0 0 7,123 16%1,140
18 Stenner Canyon Raw Waterline Replacement (Design)35,000 0 0 0 0 0 0 0 0 35,000 16%5,600
19 Stenner Canyon Raw Waterline Replacement (Const)100,000 0 0 0 0 0 0 0 0 100,000 16%16,000
20 Package Thickner (Construction and CM)0 0 0 0 50,000 0 0 0 0 50,000 16%8,000
21 Wash Water Tank #1 (Design)0 40,000 0 0 0 0 0 0 0 40,000 16%6,400
22 Wash Water Tank #1 (Construction)0 0 0 250,000 0 0 0 0 0 250,000 16%40,000
23 Wash Water Tank #1 (CM)0 0 0 25,000 0 0 0 0 0 25,000 16%4,000
24 Reservoir 2 Replacement (Study)24 0 0 0 0 0 0 0 0 24 16%4
25 Enc-Nunley 44,739 0 0 0 0 0 0 0 0 44,739 16%7,158
26 Reservoir 2 Replacement (Design)184,400 160,000 0 0 0 0 0 0 0 344,400 16%55,104
27 Reservoir 2 (Construction)0 0 0 10,000,000 0 0 0 0 0 10,000,000 16%1,600,000
28 Reservoir 2 (Const Mgmt) 0 0 0 500,000 0 0 0 0 0 500,000 16%80,000
29 SST PEA (Study)0 150,000 0 0 0 0 0 0 150,000 16%24,000
30 SST IGA (Design)0 300,000 0 0 0 0 0 0 300,000 16%48,000
31 SST - Hydro and Ozone (Const) 0 0 8,000,000 5,000,000 0 0 0 0 0 13,000,000 16%2,080,000
32 SST - Hydro and Ozone (Const Mgmt) 0 0 500,000 800,000 0 0 0 0 0 1,300,000 16%208,000
33 Treatment Plant Ozone Generation Upgrade 0 0 0 100,000 0 0 0 0 0 100,000 16%16,000
34 Fleet Replacement: Service Body Truck 8,112 0 0 0 0 40,000 0 0 0 48,112 16%7,698
35 Forebay and Culvert Rehab (Study)0 0 0 0 0 30,000 0 0 0 30,000 16%4,800
36 Forebay and Culvert Rehab (Design)0 0 0 0 0 80,000 0 0 0 80,000 16%12,800
37 Forebay and Culvert Rehab (Const)0 0 0 0 0 0 800,000 0 0 800,000 16%128,000
38 Forebay and Culvert Rehab (Const Mgmt)0 0 0 0 0 0 80,000 0 0 80,000 16%12,800
39 Treatment Plant Ozone Generation Upgrade 0 0 0 100,000 0 0 0 0 0 100,000 16%16,000
40 Fleet Replacement Forecast 0 0 0 0 0 0 44,500 0 0 44,500 16%7,120
41 Total Treatment $729,566 $1,010,000 $8,663,000 $16,946,000 $229,000 $339,000 $1,109,500 $190,000 $200,000 $29,416,066 $4,706,572
42
43 Water Distribution
44 Distribution System Improvements - Pipelines
45 DN-Casa, Stenner, Chorro, Murray, Pacific Design $150,000 $0 $0 $0 $0 $0 $0 $0 $0 $150,000 16%$24,000
46 CN-Casa, Stenner, Chorro, Murray, Pacific Design 1,560,000 1,900,000 0 0 0 0 0 0 0 3,460,000 16%553,600
47 CM-Casa, Stenner, Chorro, Murray, Pacific Design 150,000 150,000 0 0 0 0 0 0 0 300,000 16%48,000
48 Mt View, Hill, West, Lincoln, etc.-Design 125,000 0 0 0 0 0 0 0 0 125,000 16%20,000
49 Mt View, Hill, West, Lincoln, etc.-Const 0 0 0 0 1,255,000 0 0 0 0 1,255,000 16%200,800
50 Mt View, Hill, West, Lincoln, etc.-Const Mgmt 0 0 0 0 125,000 0 0 0 0 125,000 16%20,000
51 Craig, Christina, Jaycee, etc -Design 0 0 0 0 135,000 0 0 0 0 135,000 16%21,600
52 Craig, Christina, Jaycee, etc -Const 0 0 0 0 0 1,350,000 0 0 0 1,350,000 16%216,000
53 Craig, Christina, Jaycee, etc -Const Mgmt 0 0 0 0 0 135,000 0 0 0 135,000 16%21,600
54 Chorro, El Paseo, El Cerrito, etc - Design 0 0 0 0 0 125,000 0 0 0 125,000 16%20,000
55 Chorro, El Paseo, El Cerrito, etc - Const 0 0 0 0 0 0 1,258,000 0 0 1,258,000 16%201,280
56 Chorro, El Paseo, El Cerrito, etc - Const Mgmt 0 0 0 0 0 0 125,000 0 0 125,000 16%20,000
57 Patricia, Highland, La Entrada - Design 0 0 0 0 0 0 127,000 0 0 127,000 16%20,320
58 Patricia, Highland, La Entrada - Construction 0 0 0 0 0 0 0 1,270,000 0 1,270,000 16%203,200
59 Patricia, Highland, La Entrada - Construction Mgmt 0 0 0 0 0 0 0 127,000 0 127,000 16%20,320
Proposed
Page 11 of 16 Packet Pg 390
11
1 City of San Luis Obispo - Water Page 2 of 3
2 Exhibit W-8
3 Development of the Water Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible $ Fee Eligible
Proposed
60 Serrano Zone Consolidation-(Study & Design)0 0 0 0 0 0 0 100,000 0 100,000 16%16,000
61 Serrano Zone Consolidation Phase 1 (Const)0 0 0 0 0 0 0 0 1,000,000 1,000,000 16%160,000
62 Serrano Zone Consolidation Phase 1 (Constr Mgmt)0 0 0 0 0 0 0 0 100,000 100,000 16%16,000
63 Trench Repairs 174,789 200,000 200,000 200,000 200,000 200,000 0 0 0 1,174,789 0%0
64 Raise Valve Covers 50,765 25,000 25,000 30,000 30,000 30,000 0 0 0 190,765 0%0
65 Water Meters and Water Meter Boxes 115,477 165,000 180,000 180,000 180,000 180,000 0 0 0 1,000,477 0%0
66 Water Meters and Water Meter Boxes (Contribution from sewer)0 (82,500) (90,000) (90,000) (90,000) (90,000)0 0 0 (442,500)0%0
67 Enc with Corix 1,605 0 0 0 0 0 0 0 0 1,605 0%0
68 Fire Hydrants and Parts 26,743 40,000 0 0 0 0 0 0 0 66,743 0%0
69 Slack Tank Consolidation (Design)0 100,000 0 0 0 0 0 0 0 100,000 16%16,000
70 Slack Tank Consolidation (Const)0 0 920,000 0 0 0 0 0 0 920,000 16%147,200
71 Slack Tank Consolidation (Const Mgmt)0 0 92,000 0 0 0 0 0 0 92,000 16%14,720
72 [2] Wash Water Tank #2 (Const) @ WTP 170,000 0 0 0 0 0 0 0 0 170,000 16%27,200
73 [2]Tank Maintenance (Study)13,100 0 75,000 0 0 0 0 0 0 88,100 16%14,096
74 [2] Enc-Nunley 500 0 0 0 0 0 0 0 0 500 16%80
75 [2]Tank Maintenance (Design)5 0 0 0 0 0 0 0 0 5 16%1
76 [2]Tank Maintenance (Construction)600,000 0 0 675,000 0 0 0 0 0 1,275,000 16%204,000
77 [2]Tank Maintenance (CM)130,000 0 0 70,000 0 0 0 0 0 200,000 16%32,000
78 Terrace Hill Tank Maint 0 0 0 0 0 0 0 0 0 0 16%0
79 Enc-Nunley 65,635 0 0 0 0 0 0 0 0 65,635 16%10,502
80 IT - CityWorks Upgrade 5,942 0 0 0 0 0 0 250,000 0 255,942 16%40,951
81 Enc-Woolpert 11,412 0 0 0 0 0 0 0 0 11,412 16%1,826
82 Distribution Pump Station Upgrades 0 0 0 0 0 0 0 0 0 0 16%0
83 Water Model Maintenance and Analysis 0 20,000 20,000 0 0 0 0 0 0 40,000 16%6,400
84 Water Pump Station Analysis 0 0 0 0 0 0 0 0 0 16%0
85 Fleet replacement: Pickup 0 0 70,000 35,000 35,000 0 0 0 0 140,000 16%22,400
86 Fleet replacement: Caterpillar Backhoe Loader & Attachments 0 0 0 0 0 235,000 0 0 0 235,000 16%37,600
87 Fleet replacement: Service body trucks 0 0 0 0 300,000 0 0 0 0 300,000 16%48,000
88 Fleet Replacement: Medium Duty Truck with bed & crane 0 0 0 0 130,000 0 0 0 0 130,000 16%20,800
89 Extended Cab Pickup Truck 1,079 0 0 0 0 0 0 0 0 1,079 16%173
90 Fleet Replacement: Message Board 0 0 0 0 40,000 0 0 0 0 40,000 16%6,400
91 Foothill/Chorro PRV Replacement (Design)5 0 0 0 0 0 0 0 0 5 16%1
92 Enc-Numley 3,746 0 0 0 0 0 0 0 0 3,746 16%599
93 Foothill/Chorro PRV Replacement (Const)86,950 - 0 0 0 0 0 0 0 86,950 16%13,912
94 Total Distribution $3,442,753 $2,517,500 $1,492,000 $1,100,000 $2,340,000 $2,165,000 $1,510,000 $1,747,000 $1,100,000 $17,414,253 $2,467,581
95
96 Water Customer Service
97 Fleet replacement: Compact Pickups $0 $0 $0 $57,000 $0 $0 $0 $0 $0 57,000 0%$0
98
99 Utilities Services
100 Fleet replacement: Compact Pickup $25,200 $0 $0 $0 $0 $0 $0 $0 $0 25,200 0%$0
101
102 Administration and Engineering
103 879 Morro Refurbishment $481 $0 $0 $0 $0 $0 $0 $0 $0 $481 0%$0
104 Enc Benchmark 3,966 0 0 0 0 0 0 0 0 3,966 0%0
105 Control System Trucks 6,501 0 0 0 0 0 0 0 0 6,501 0%0
106 Enc - Toyota 33,589 0 0 0 0 0 0 0 0 33,589 0%0
107 Fleet replacement: Sedan 0 0 0 35,000 0 0 0 0 0 35,000 0%0
108 Mobile Equipment Lifts & Safety Stands 0 0 0 0 0 0 0 0 0 0 0%0
109 Total Administration and Engineering $44,537 $0 $0 $35,000 $0 $0 $0 $0 $0 $79,537 $0
Page 12 of 16 Packet Pg 391
11
1 City of San Luis Obispo - Water Page 3 of 3
2 Exhibit W-8
3 Development of the Water Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible $ Fee Eligible
Proposed
110
111 Source of Supply
112 Groundwater (Study)$70,000 $0 $0 $0 $0 $0 $0 $0 $0 $70,000 39.0%$27,300
113 Groundwater (DN)175,000 0 0 0 0 0 0 0 0 175,000 39.0%68,250
114 Groundwater (CN)1,000,000 0 0 0 0 0 0 0 0 1,000,000 39.0%390,000
115 Groundwater (CM)150,000 0 0 0 0 0 0 0 0 150,000 39.0%58,500
116 Groundwater (ER)75,000 0 0 0 0 0 0 0 0 75,000 39.0%29,250
117 Total Source of Supply $1,470,000 $0 $0 $0 $0 $0 $0 $0 $0 $1,470,000 $573,300
118
119 General Assumptions for Future Planning Purposes $0 $0 $0 $0 $0 $500,000 $500,000 $500,000 $500,000 $2,000,000 0%$0
120
121 Shared Information Technology
122 Fox Pro Replace $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0%$0
123 Laserfiche 0 0 0 0 0 0 0 0 0 0 0%0
124 UB System Upgrade 0 0 0 0 0 0 0 0 0 0 0%0
125 Enc - Accela 1,667 0 0 0 0 0 0 0 0 1,667 0%0
126 City Website Upgrade (4% share)0 0 0 0 0 0 0 0 0 0 16%0
127 Water Reuse Automation Impr 51,980 0 0 0 0 0 0 0 0 51,980 16%8,317
128 Wireless Net Infrastructure Replacement 0 0 0 0 0 0 0 0 0 16%0
129 Telemetry System Upgrade (Design)2,704 0 0 0 0 0 0 0 0 2,704 0%0
130 Enc - Cannon 48,588 0 0 0 0 0 0 0 0 48,588 16%7,774
131 Telemetry System Upgrade - Construction 1,462,688 0 0 0 0 0 0 0 0 1,462,688 16%234,030
132 Enc - Applied Technology 2,925 0 0 0 0 0 0 0 0 2,925 0%0
133 Virtual Private Network (VPN) Replacement 0 0 0 9,028 0 0 0 0 0 9,028 0%0
134 Network Firewalls 0 0 0 15,259 0 0 0 0 0 15,259 16%2,441
135 GPS System Replacement 0 0 0 0 0 0 0 0 0 0 16%0
136 Network Switching Infrastructure Replacement 0 0 0 14,140 0 0 0 0 0 14,140 16%2,262
137 Radio Handhelds and Mobile Replacements 24,282 0 0 0 0 0 0 0 24,282 16%3,885
138 VM Infrastructure 8,945 0 0 8,945 0 0 0 0 0 17,890 16%2,862
139 Server Operating System 1,848 0 0 0 0 0 0 0 0 1,848 0%0
140 VoIP 0 20,360 0 0 0 0 0 0 0 20,360 16%3,258
141 Document Management System 0 0 0 0 0 0 0 0 0 0 16%0
142 Tait Radio System 0 0 24,282 0 0 0 0 0 0 24,282 16%3,885
143 MS Office Replacement 0 0 0 16,773 0 0 0 0 0 16,773 16%2,684
144 Enc - Planet Technologies 12,400 0 0 0 0 0 0 0 0 12,400 16%1,984
145 UPS Battery Replacement 0 0 1,885 0 0 0 0 0 0 1,885 0%0
146 Enc - Applied Technology 1,885 0 0 0 0 0 0 0 0 1,885 0%0
147 Enterprise Storage Growth 0 0 0 0 0 0 0 0 0 0 0%0
148 Total Share of Information Technology CIP $1,595,629 $44,642 $26,167 $64,145 $0 $0 $0 $0 $0 $1,730,583 $273,382
149
150 Recycled Water Projects 0 0 50,000 0 250,000 0 1,250,000 0 3,706,460 5,256,460 16%$841,034
151
152 TOTAL WATER FUND CAPITAL PLAN $7,307,684 $3,572,142 $10,231,167 $18,202,145 $2,819,000 $3,004,000 $4,369,500 $2,437,000 $5,506,460 $57,449,098 $8,861,869
153
154 Supply $1,414,334
155 Treatment 4,706,572
156 Notes:Distribution 2,740,963
157 [1] From the City "Water Fund Analysis-working copy_2016-10-18.xlsx".Total $8,861,869
158 [2] These items are included in the estimated replacement cost for the WTP. See Exhibit W-4A.OK
159 [3] These items are estimated growth related based on Exhibit W-2. Future growth is 16% of total EDU, 5,821/36,791 = 16%.
Page 13 of 16 Packet Pg 392
11
1 City of San Luis Obispo - Water City of San Luis Obispo - Water
2 Exhibit W-9A Exhibit W-9B
3 Allowable Water Capacity and Connection Fees Allowable Water Capacity and Connection Fees
4
5 Component
Calculation
Results
($/EDU)Component Buy-in Future
Debt
Service Total ($/EDU)
6
7 Supply $10,591 Supply $10,348 $243 $0 $10,591
8 Treatment 2,808 Treatment 1,999 809 0 2,808
9 Distribution 3,403 Distribution 2,932 471 0 3,403
10 Debt Service (1,459)Debt Service 0 0 (1,459) (1,459)
11 Cash Reserves 437 Cash Reserves 437 0 0 437
12 -------------------------- ------------ ------------ ------------
13 Net Allowable Capacity and Connection Fee $15,780 Net Allowable Capacity and Connection Fee $15,716 $1,523 ($1,459) $15,780
14
15 Current Capacity and Connection Fee $11,100.16 Current Capacity and Connection Fee $11,100.16
16 ----------------------------
17 Difference $4,680 Difference $4,680
Page 14 of 16 Packet Pg 393
11
City of San Luis Obispo - Water
Exhibit W-10
Summary of Water Capcity and Connection Fee Schedule
CURRENT WATER DEVELOPMENT IMPACT FEES AS OF 7/1/2017
Land Use Type EDU*Citywide
RESIDENTIAL (per unit)
Single Family Residential 1.0 $11,322.16
Multi-Family Residential 0.7 7,925.51
Mobile Home 0.6 6,793.30
Studio Unit (450 s.f. or less)0.3 3,396.65
NON-RESIDENTIAL (Meter Size)
5/8" to 3/4"-inch 1.0 $11,322.16
1-inch 1.7 19,247.68
1-1/2 inch 3.4 38,495.36
2-inch 5.4 61,138.45
3-inch 10.7 121,145.00
4-inch 16.7 185,076.96
6-inch 33.4 378,153.92
* Equivalent dwelling unit
CALCULATED WATER CAPACITY AND CONNECTION FEE
Land Use Type EDU*Citywide
RESIDENTIAL (per unit)
Residential (greater than 800 s.f.)1.0 $15,780
Residential (451 s.f. to 800 s.f.)0.7 11,046
Mobile Home 0.6 9,468
Studio Unit (450 sf or less)0.3 4,734
NON-RESIDENTIAL (Meter Size)
5/8" to 3/4"-inch 1.0 $15,780
1-inch 1.7 26,826
1-1/2 inch 3.4 53,652
2-inch 5.4 85,212
3-inch 10.7 168,846
4-inch 16.7 263,526
6-inch 33.4 527,052
Page 15 of 16 Packet Pg 394
11
Current Fee Option #1 Option #2
Future Portion
of Treatment
Project plus
Financing Cost
Current Fee plus
Future Portion of
Project plus
Financing Cost
Existing
(Replacement Cost
Less Depreciation)
plus Future plus
Financing Cost
Difference
between Option
#1 and Option #2
Existing Fee - Future Capacity Projects
Water Reuse Project (39%)$4,514,857 $4,514,857
Nacimiento Pipeline Project (39%)58,678,467 58,678,467
2006 Water Treatment Imp (15%)3,831,389 3,831,389
Sedimentation Process (50%)3,888,350 3,888,350
2007 Bishop Tank (15%)231,665 231,665
1994 Water Treatment Tank (15%)3,480,430 3,480,430
Total Existing Fee Future Plant $74,625,158 $74,625,158
Existing Fee Future EDUs 6,927 6,927
Existing Fee $/EDU $10,773 $10,773 ($10,773)
New Future Plant
Supply [1]$1,477,484 $1,414,334 (11)
Treatment [1]4,916,720 4,706,572 (36)
Distribution 0 2,740,963 471
Total New Future Plant $6,394,204 $8,861,869
Total New Future EDUs [2]5,821 5,821
New Future Plant $/EDU $1,098 $1,523
Future Plant $/EDU $10,773 $11,872 $1,523 ($10,349)
Existing Plant
Supply $60,234,226
Total Future EDUs [2]5,821
Total Supply per EDU $10,348 $10,348
Treatment $73,535,215 1,999
Distribution 107,869,887 2,932
Plus: Cash balances 16,079,051 437
Total Existing Treatment, Distribution Plant $197,484,153
Total EDUs 36,791
Total Other per EDU $5,368
Total Existing Plant $/EDU $15,716 $15,715
Debt Credit ($1,459)($1,459)
Total Future and Existing $/EDU $10,773 $11,872 $15,780 $3,907
Current Fee (ENR 7/1/2017)$11,322.16
[1] Option #1 is existing fee plus 16% of growth related future plant, plus interest at 2%
[2] Future EDUs are net of Vested/ Pending projects
Water Capacity and Connection Fee
Page 16 of 16 Packet Pg 395
11
Wastewater Capacity and Connection Fee
Packet Pg 396
11
1 City of San Luis Obispo - Wastewater
2 Exhibit S-1
3 Development of Capacity and Connection Fee
4
5 Plant Description
Estimated
Replacement Cost
Eligible
Replacement Cost
New (RCN)
Eligible
Replacement Cost
New Less
Depreciation
(RCNLD) EDUs Total Fee
6 Existing Plant [1]
7 Treatment $83,819,927 $79,117,927 $42,138,027 36,791 $1,145
8 Collection 259,391,205 197,461,122 106,909,803 36,791 2,906
9
10 Total Existing Plant $343,211,132 $276,579,049 $149,047,830 36,791 $4,051
11
12 Less: Outstanding Debt Principal (2)($17,096,754) 36,791 ($465)
13
14 Plus: Capital Fund Reserves [3]$28,271,258 36,791 $768
15
16 Total Net Existing Plant $343,211,132 $276,579,049 $160,222,334 36,791 $4,354
17
18 Future Plant [4]
19 Treatment $154,876,753 $24,717,624 5,821 $4,246
20 Collection 23,292,507 23,292,507 5,821 4,002
21
22 Total Future Plant $178,169,260 $0 $48,010,131 5,821 $8,248
23
24
25
26 Total Existing and Future Plant [5]$521,380,391 $276,579,049 $208,232,465 $12,602
27
28 Existing EDUs (Includes Vested/Pending Projects)30,970
29 Future EDUs 5,821
30 Total Existing and Future EDUs 36,791
31
32
33 Notes:
34 [1] Existing plant based on replacement cost less depreciation.
35 [2] Remaining principal as of June 2016. See Exhibit S-5.
36 [3] Cash reserves as of June 2016 which are fee eligible. See Exhibit S-6.
37 [4] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit S-7.
38 [5] Based on "combined" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 273.Page 1 of 18 Packet Pg 397
11
1 City of San Luis Obispo - Wastewater
2 Exhibit S-2
3 Development of EDUs
4
5 EDU = Equivalent Dwelling Unit
6
7
8 5,400,000 Future Average Dry Weather Flow/WRRF Design Capacity
9 470,000 Cal Poly Average Dry Weather Flow/Capacity share of WRRF
10 4,930,000 City owned WRRF Capacity
11 134 EDU gpd Rate [1]
12 36,791 Total City Existing and Future EDU
13 4,150,000 Existing Average Dry Weather Flow, plus pending increment
14 30,970 Existing EDU (Includes Vested/Pending Projects)
15 5,821 Future EDU
16
17
18
19 Notes:
20 [1] City provided gallons per day (gpd) based on a a three-year average from 2012-13 to 2014-15.
21 [2] Future growth is 16% of total EDU, 5,821/36,791 = 16%
Future EDU Calc (derived by using 5.4 mgd design capacity for WRRF)
Page 2 of 18 Packet Pg 398
11
1 City of San Luis Obispo - Wastewater Page 1 of 3
2 Exhibit S-3
3 Development of Treatment Capacity and Connection Fee
4
5 System Type Function Description
Install
Date
Average
Age (Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
6 EXISTING PLANT [1]
7 Land 83199 LAND 100 6/30/1952 $4,600 0.0% 100% $4,600 $4,600
8 Land 83200 LAND 100 6/30/1963 959,700 0.0% 100% 959,700 959,700
9 Land 83201 LAND 100 6/30/1969 474,175 0.0% 100% 474,175 474,175
10 Land 10069001 LANDí18.8 ACRES 6/30/1969 587,450 0.0% 100% 587,450 587,450
11 Treatment Digester DIGESTER No. 3 1923 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
12 Treatment Clarifier PRIMARY CLARIFIER No. 1 1945 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
13 Treatment Clarifier PRIMARY CLARIFIER No. 2 1945 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
14 Treatment Digester DIGESTER No. 2 1946 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
15 Treatment Digester DIGESTER No. 1 1952 69 92% 75 2,000,000 92.0% 100% 2,000,000 160,000
16 Treatment Drying Beds DRYING BEDS 1-8 1950 69 92% 75 472,000 92.0% 0%0 0
17 Treatment Biofilter BIOFILTER No. 3 1964 69 138% 50 0 100.0% 0%0 0
18 Treatment Clarifier SECONDARY CLARIFIER No. 3 1964 52 69% 75 2,000,000 69.3% 100% 2,000,000 613,333
19 Treatment Building OPERATIONS BUILDING 1964 52 0% 0 0 0.0% 0%0 0
20 Treatment Building MAINTENANCE SHOP/TOOL SHED 1964 52 0% 0 280,000 0.0% 0%0 0
21 Treatment Drying Beds UPPER DRYING BEDS 1984 32 0% 0 0 0.0% 0%0 0
22 Treatment Equalization EQUALIZATION BASIN 1984 44 88% 50 1,000,000 88.0% 100% 1,000,000 120,000
23 Treatment Equalization EQUALIZATION BASIN 1984 24 80% 30 10,000,000 80.0% 100% 10,000,000 2,000,000
24 Treatment Lagoon SUPERNATANT LAGOON 1984 32 80% 40 550,000 80.0% 0%0 0
25 Treatment Effluent OLD EFFLUENT STRUCTURE AT SOUTH END OF PROPERTY 1984 32 32% 100 1,500,000 32.0% 100% 1,500,000 1,020,000
26 Treatment Headworks HEADWORKS 1994 2 10% 20 4,179,000 10.0% 100% 4,179,000 3,761,100
27 Treatment Clarifier SECONDARY CLARIFIER No. 4 1994 22 29% 75 2,000,000 29.3% 100% 2,000,000 1,413,333
28 Treatment Clarifier SECONDARY CLARIFIER No. 5 1994 22 29% 75 2,000,000 29.3% 100% 2,000,000 1,413,333
29 Treatment Clarifier CLARIFIER No. 4 RAS PUMPS 2014 2 10% 20 250,000 10.0% 100% 250,000 225,000
30 Treatment Clarifier CLARIFIER No. 5 RAS PUMPS 2014 2 10% 20 250,000 10.0% 100% 250,000 225,000
31 Treatment Chemical pH CONTROL CHEMICAL STATION 1994 22 88% 25 800,000 88.0% 100% 800,000 96,000
32 Treatment Pumps RECIRCULATION ISLAND PUMPS 1994 22 88% 25 0 88.0% 0%0 0
33 Treatment Aeration AERATION TANKS No. 1 & 2 1994 22 29% 75 8,000,000 29.3% 100% 8,000,000 5,653,333
34 Treatment Blowers BLOWERS 1,2 &3 1994 22 110% 20 1,350,000 100.0% 100% 1,350,000 0
35 Treatment Building MAIN SWITCHGEAR BUILDING 1994 22 29% 75 5,000,000 29.3% 100% 5,000,000 3,533,333
36 Treatment Building MCC BUILDINGS B & G 2015 1 1% 75 800,000 1.3% 100% 800,000 789,333
37 Treatment Building MCC BUILDINGS A & J 2010 6 8% 75 800,000 8.0% 100% 800,000 736,000
38 Treatment Other PROPANE POWERED EMERGENCY GENERATOR 1994 26 87% 30 1,500,000 86.7% 100% 1,500,000 200,000
39 Treatment Daft DAFT (DISSOLVED AIR FLOTATION THICKENER)1994 22 29% 75 1,500,000 29.3% 100% 1,500,000 1,060,000
40 Treatment Chemical CHLORINE CONTACT CHANNELS 1/2 1994 22 29% 75 2,200,000 29.3% 0%0 0
41 Treatment Building BELT PRESS BUILDING 1994 22 44% 50 500,000 44.0% 100% 500,000 280,000
42 Treatment Building ADMINISTRATION BUILDING 1994 22 220% 10 250,000 100.0% 100% 250,000 0
43 Treatment Tertiary TERTIARY MEDIA FILTERS 4 filters 1994 22 29% 75 10,000,000 29.3% 100% 10,000,000 7,066,667
44 Treatment Cooling Towers COOLING TOWERS 3 units 1994 22 73% 30 3,000,000 73.3% 100% 3,000,000 800,000
45 Treatment Equalization EQALIZATION TANKS (NORTH & SOUTH) 2 units 1994 22 29% 75 2,000,000 29.3% 100% 2,000,000 1,413,333
46 Treatment Chemical DISINFECTION CHEMICAL STORAGE AREA 1994 36 90% 40 2,200,000 90.0% 50% 1,100,000 110,000
47 Treatment Digester DIGESTER GAS FLARE SYSTEM 2006 10 50% 20 100,000 50.0% 100% 100,000 50,000
48 Treatment Other SLURRY SEALED ALL ASPHALT 2010 6 120% 5 100,000 100.0% 0%0 0
49 Treatment Other PERIMETER FENCING 2012 4 20% 20 500,000 20.0% 100% 500,000 400,000
50 Treatment Other WRRF SERVER IN ADMIN 2015 1 10% 10 2,500,000 10.0% 100% 2,500,000 2,250,000
51 Treatment Other FIBER OPTICS 2015 1 5% 20 100,000 5.0% 100% 100,000 95,000
52 Treatment Cogeneration COGENERATION SYSTEM 2015 1 5% 20 2,500,000 5.0% 100% 2,500,000 2,375,000
53 Treatment Other PLANT ENTRANCE GATE 2016 0 0% 20 25,000 0.0% 100% 25,000 25,000
54 Treatment Other LIGHTING 2016 0 0% 20 50,000 0.0% 100% 50,000 50,000
55 TOTAL EXISTING PLANT $82,281,925 $77,579,925 $40,600,025
Page 3 of 18 Packet Pg 399
11
1 City of San Luis Obispo - Wastewater Page 2 of 3
2 Exhibit S-3
3 Development of Treatment Capacity and Connection Fee
4
5 System Type Function Description
Install
Date
Average
Age (Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
56
57 PLUS: Interest on Debt Water Efficiency Project 5/05/15 $1,538,002 1.00 $1,538,002 100%1,538,002 1,538,002
58
59 TOTAL EXISTING PLANT $83,819,927 $79,117,927 $42,138,027
60
61 Buildout EDUs [2] 36,791
62
63 TOTAL EXISTING TREATMENT AND COLLECTION PLANT $/EDU $1,145
64
65 UPGRADE PLANT [3]Cost in 2016 $
% Fee
Eligible Cost in 2016 $
66 Water Resource Recovery Facility
67 Major Maintenance $3,762,884 16%$602,061
68 Influent Pump Replacement 155,705 16%24,913
69 WRRF Energy Efficiency 0 16%0
70 Design 1,325 16%212
71 Construction 3,861 16%618
72 WRRF Upgrade 0 16%0
73 Study/Environmental 382,151 16%61,144
74 Program Management 2,805,544 16%448,887
75 Design 6,063,682 16%970,189
76 amendment to CH2M 1,000,000 16%160,000
77 Construction 0 16%0
78 Infrastructure 140,000,000 16%22,400,000
79 Disinfection 0 16%0
80 Nutrient Removal 0 16%0
81 Contingency 0 16%0
82 Flood Control 0 16%0
83 Construction Management 0 16%0
84 WRRF Fiber Optic Impr 0 16%0
85 Digester 2 Cleaning 0 16%0
86 WRF Sludge Bed 0 16%0
87 WRRF Cooling Towers 0 16%0
88 IT - iFix Replacement 250,000 16%40,000
89 IT - HachWims 30,000 16%4,800
90 IT - MP2 Replacement 30,000 16%4,800
91 Fleet Replacement: Utility Trucks (3)57,600 0%0
92 Fleet Replacement: Sedan 33,000 0%0
93 Fleet Replacement: 4-Wheel Drive Loader 0 0%0
94 Fleet Replacement: Pickup Truck w/Flat Bed & Crane 0 0%0
95 Fleet Replacement: Compact Pickup Truck 36,000 0%0
96 Fleet Replacement: Decanter Trailer 0 0%0
97 Fleet Replacement: Club Cars - Electric 60,000 0%0
98 Fleet Replacement: Dump Truck 150,000 0%0
99 Fleet Replacement: Forklift 55,000 0%0
100 TOTAL UPGRADE PLANT $154,876,753 $0 $24,717,624
101
102 Total Future EDUs [4] 5,821
103
104 TOTAL FUTURE TREATMENT PLANT $/EDU $4,246
105
106 TOTAL EXISTING AND FUTURE TREATMENT PLANT $/EDU $5,391
Page 4 of 18 Packet Pg 400
11
1 City of San Luis Obispo - Wastewater Page 3 of 3
2 Exhibit S-3
3 Development of Treatment Capacity and Connection Fee
4
5 System Type Function Description
Install
Date
Average
Age (Years)
Life
Cycle
%
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
107
108
109
110 Notes:
111 [1] Existing plant based on replacement cost less deprecation. Land based on original cost and July 2017 ENR.
112 [2] See Exhibit S-2 for total EDUs.
113 [3] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit S-7.
114 [4] See Exhibit S-2 for future EDUs.
Page 5 of 18 Packet Pg 401
11
1 City of San Luis Obispo - Wastewater Page 1 of 2
2 Exhibit S-4A
3 Development of Collection Capacity and Connection Fee
4
5
6 System Type Function Description Install Date
Average
Age
(Years)
Life
Cycle
%
Pipe Length
(feet)
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
EXISTING PLANT [1]
7 Collection Sewer Mains Gravity Main 1910 to 1919 106 106%27,966 100 $8,389,677 100.0%80%$6,711,742 $0
8 Collection Sewer Mains Gravity Main 1920 to 1929 96 96%62,068 100 18,620,358 96.0%80%14,896,286 595,851
9 Collection Sewer Mains Gravity Main 1930 to 1939 86 86%1,863 100 559,017 86.0%80%447,214 62,610
10 Collection Sewer Mains Gravity Main 1940 to 1949 76 76%62,018 100 18,605,544 76.0%80%14,884,435 3,572,264
11 Collection Sewer Mains Gravity Main 1950 to 1959 66 66%118,881 100 35,664,195 66.0%80%28,531,356 9,700,661
12 Collection Sewer Mains Gravity Main 1960 to 1969 56 56%109,485 100 32,845,503 56.0%80%26,276,402 11,561,617
13 Collection Sewer Mains Gravity Main 1970 to 1979 46 46%86,723 100 26,016,912 46.0%80%20,813,530 11,239,306
14 Collection Sewer Mains Gravity Main 1980 to 1989 36 36%71,333 100 21,399,804 36.0%80%17,119,843 10,956,700
15 Collection Sewer Mains Gravity Main 1990 to 1999 26 26%76,462 100 22,938,525 26.0%80%18,350,820 13,579,607
16 Collection Sewer Mains Gravity Main 2000 to 2009 16 16%72,569 100 21,770,619 16.0%80%17,416,495 14,629,856
17 Collection Sewer Mains Gravity Main 2009 to Present 3 3%42,861 100 12,858,381 3.0%80%10,286,705 9,978,104
18 Collection Lift Stations [2]Prefumo Lift Station 7/1/2002 14 28%0 50 750,000 0.0%0%0 0
19 Collection Lift Stations [2]Calle Joaquin Lift Station 1/1/1973 43 86%0 50 4,000,000 0.0%56%2,221,850 2,221,850
20 Collection Lift Stations [2]Foothill Lift Station 1/1/1986 (Old Rockview) 30 60%0 50 2,098,000 0.0%77%1,606,979 1,606,979
21 Collection Lift Stations [2]Silver City Lift Station 1/1/1967 49 98%0 50 2,150,000 0.0%85%1,830,521 1,830,521
22 Collection Lift Stations [2]Airport Lift Station 1/1/1980 36 72%0 50 2,130,000 0.0%30%646,182 646,182
23 Collection Lift Stations [2]Margarita Lift Station 1/1/1967 49 98%0 50 1,500,000 0.0%51%758,275 758,275
24 Collection Lift Stations [2]Tank Farm Lift Station 7/1/2009 7 14%0 50 18,325,682 0.0%53%9,793,361 9,793,361
25 Collection Lift Stations [2]Laguna Lift Station 7/1/2015 1 2%0 50 3,121,300 0.0%76%2,378,019 2,378,019
26 Collection Force Mains Foothill (51 Foothill)1953 63 0% 440 75 110,023 0.1%0%0 0
27 Collection Force Mains 1055 Isabella 2002 14 0% 595 75 148,810 0.0%0%0 0
28 Collection Force Mains 206 Margarita 1967 49 0% 231 75 57,853 0.1%0%0 0
29 Collection Force Mains Silver City (Trailer Park)1966 50 0% 765 75 191,190 0.0%0%0 0
30 Collection Force Mains 850 Fiero 1980 36 0% 839 75 209,705 0.0%0%0 0
31 Collection Force Mains 1625 Calle Joaquin 2015 1 0%3,656 75 914,000 0.0%0%0 0
32 Collection Force Mains Tank Farm (264 Tank Farm)2009 7 0%3,772 75 943,108 0.0%100%943,108 943,101
33 Collection Force Mains Laguna (35 Prado)2015 1 0%2,232 75 558,000 0.0%100%558,000 557,999
34 Collection SCADA Prefumo Lift Station 7/1/2002 14 70%0 20 25,000 70.0%0%0 0
35 Collection SCADA Calle Joaquin Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
36 Collection SCADA Foothill Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
37 Collection SCADA Silver City Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
38 Collection SCADA Airport Lift Station 1/1/2000 16 80%0 20 25,000 80.0%0%0 0
39 Collection SCADA Margarita Lift Station 1/1/1997 19 95%0 20 25,000 95.0%0%0 0
40 Collection SCADA Tank Farm Lift Station 7/1/2009 7 35%0 20 25,000 35.0%100%25,000 16,250
41 Collection SCADA Laguna Lift Station 7/1/2015 1 5%0 20 25,000 5.0%100%25,000 23,750
42 Collection SCADA Mustang Village (Cal-Poly Flow)7/1/1997 19 76%0 25 25,000 76.0%0%0 0
43 Collection SCADA Computer 1/0/1900 0 0%0 5 25,000 0.0%0%0 0
44 Collection Vehicles Vac-Con Hydro-cleaner 2014 2 17%0 12 350,000 16.7%0%0 0
45 Collection Vehicles Vac-Con Hydro-cleaner 2007 9 75%0 12 350,000 75.0%0%0 0
46 Collection Vehicles Dump Truck / 5 Yard 2008 8 47%0 17 100,000 47.1%0%0 0
47 Collection Vehicles Service Truck/ Utility Bed & Crane 2004 12 100%0 12 75,000 100.0%100%75,000 0
48 Collection Vehicles Service Truck, /Utility Bed 2004 12 100%0 12 70,000 100.0%100%70,000 0
49 Collection Vehicles Van, 1 Ton w/Camera Equipment 2016 0 0%0 10 170,000 0.0%0%0 0
50 Collection Vehicles Pickup Truck, 1/2 Ton 2015 1 8%0 12 20,000 8.3%0%0 0
51 Collection Vehicles Excavator, Mini 2006 10 67%0 15 750,000 66.7%100%750,000 250,000
52 Collection Vehicles Trailer, Tilt 2006 10 67%0 15 6,000 66.7%100%6,000 2,000
53 Collection Vehicles Trailer, Portable Concrete Mixer 2002 14 82%0 17 6,000 82.4%100%6,000 1,059
54 Collection Equipment Pump, Portable (4 inch)2001 15 88%0 17 33,000 88.2%100%33,000 3,882
55 Collection Equipment Pump, Portable (6 inch)2007 9 53%0 17 45,000 52.9%0%0 0
56 Collection Equipment Generator, 240kw Portable 2012 4 27%0 15 121,000 26.7%0%0 0
57 Collection Equipment Generator, 110kW Portable 2015 1 7%0 15 67,000 6.7%0%0 0
58 Collection Equipment Generator, 200kW Portable 2015 1 7%0 15 102,000 6.7%0%0 0
Page 6 of 18 Packet Pg 402
11
1 City of San Luis Obispo - Wastewater Page 2 of 2
2 Exhibit S-4A
3 Development of Collection Capacity and Connection Fee
4
5
6 System Type Function Description Install Date
Average
Age
(Years)
Life
Cycle
%
Pipe Length
(feet)
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost % Depr.
% Fee
Eligible
Replacement
Cost New (RCN)
Replacement
Cost New Less
Depreciation
(RCNLD)
59
60 TOTAL EXISTING PLANT $259,391,205 $197,461,122 $106,909,803
61
62 Buildout EDUs [3] 36,791
63
64 TOTAL EXISTING COLLECTION PLANT $/EDU $2,906
65
66 FUTURE PLANT [4]Cost in 2016 $
67 Total Collection System Improvements $56,585,280 16.0%$21,847,448
68 Total Pretreatment Improvements 35,000 16.0% 5,600
69 Total Distribution Improvements 577,028 16.0%0
70 Total Water Quality Laboratory Improvements 0 16.0%0
71 Total Administration and Engineering Improvements 82,635 16.0%6,414
72 Total Wastewater Services CIP Requests 8,750,000 16.0%1,400,000
73 Total Shared Information Technology Improvements 230,374 16.0%33,045
74 $66,260,317 23,292,507
75
76 TOTAL FUTURE PLANT $66,260,317 $23,292,507
77
78 Total Future EDUs [5] 5,821
79
80 TOTAL FUTURE COLLECTION PLANT $/EDU $4,002
81
82 TOTAL EXISTING AND FUTURE COLLECTION PLANT $/EDU $6,908
83
84
85
86 Notes:
87 [1] Existing plant based on replacement cost less deprecation.
88 [2] Lift station catchment areas based on City specific analysis based on cost and flow for existing and future plant. See exhibit S-9.
89 [3] See Exhibit S-2 for total EDUs.
90 [4] Future plant based on City capital improvement plan in 2016 dollars. See Exhibit S-7.
91 [5] See Exhibit S-2 for future EDUs.
Page 7 of 18 Packet Pg 403
11
A B C D F G H I J M N O P
1 City of San Luis Obispo - Wastewater
2 Exhibit S-4B
3 Summary of Existing Catchment Assets
4
5
6 System Type Function Description Install Date
Average
Age
(Years)
Life
Cycle
%
Pipe
Length
(feet)
Estimated
Life Cycle
(Years)
Estimated
Replacement
Cost
%
Depr.
% Fee
Eligible
Replacement Cost
New (RCN)
Replacement Cost
New Less
Depreciation
(RCNLD)
7 Existing Plant
8 Collection Lift Stations [2]Calle Joaquin Lift Station 1/1/1973 43 86% 0 50 $4,000,000 0.0% 56% $2,221,850 $2,221,850
9 Collection Lift Stations [2]Foothill Lift Station 1/1/1986 (Old Rockview) 30 60% 0 50 2,098,000 0.0% 77%1,606,979 1,606,979
10 Collection Lift Stations [2]Silver City Lift Station 1/1/1967 49 98% 0 50 2,150,000 0.0% 85%1,830,521 1,830,521
11 Collection Lift Stations [2]Airport Lift Station 1/1/1980 36 72% 0 50 2,130,000 0.0% 30%646,182 646,182
12 Collection Lift Stations [2]Margarita Lift Station 1/1/1967 49 98% 0 50 1,500,000 0.0% 51%758,275 758,275
13 Collection Lift Stations [2]Tank Farm Lift Station 7/1/2009 7 14% 0 50 18,325,682 0.0% 53%9,793,361 9,793,361
14 Collection Lift Stations [2]Laguna Lift Station 7/1/2015 1 2% 0 50 3,121,300 0.0% 76%2,378,019 2,378,019
15
16 Total Existing Catchment Assets $33,324,982 $19,235,186 $19,235,186
17 Total Existing and Future EDUs [1] 36,791
18 TOTAL EXISTING CATCHMENT PLANT $/EDU $523
19
20 Future Plant
21 Collection Lift Stations [2]Margarita $741,725 $741,725
22 Collection Lift Stations [2]Tank Farm 8,532,321 8,532,321
23 Collection Lift Stations [2]Silver City 319,479 319,479
24 Collection Lift Stations [2]Calle Joaquin 1,778,150 1,778,150
25 Collection Lift Stations [2]Laguna 743,281 743,281
26 Collection Lift Stations [2]Airport 1,483,818 1,483,818
27 Collection Lift Stations [2]Foothill 491,021 491,021
28 Collection Lift Stations [2]Buckley 793,118 793,118
29
30 Total Future Catchment Assets $14,882,914 $14,882,914
31 Total Future EDUs [2]5,821
32 TOTAL FUTURE CATCHMENT PLANT $/EDU $2,557
33
34 TOTAL EXISTING AND FUTURE PLANT $34,118,100 $3,080
35
36
37 [1] See Exhibit S-2 for future EDUs.
38 [2] Buckley not built yet.
Page 8 of 18 Packet Pg 404
11
1 City of San Luis Obispo - Wastewater
2 Exhibit S-5
3 Development of Debt Service Credit [1]
4
5
6 WRRF Energy Efficiency Project Tank Farm Lift Station Financing Tank Farm Lift Station Financing Total
7 Principal Interest Total Principal Interest Total Principal Interest Total Principal
8 I. Debt Status:
9 Interest Rate 2.90%10,000,000$ 2,050,000$
10 Principal $7,479,000 3.25%4.25%
11 Financing Term 15 years 30 15
12
13
II. Outstanding Principal
Payments:
14 2015-16 $418,716 $200,004 $618,720 $257,658 $301,671 $559,328 $130,000 $55,020 $185,020 $806,374
15 2016-17 430,859 187,685 618,544 266,031 292,388 558,419 135,000 49,455 184,455 831,891
16 2017-18 443,354 175,009 618,363 274,678 282,803 557,481 140,000 43,680 183,680 858,032
17 2018-19 456,211 161,965 618,177 283,605 272,907 556,512 145,000 37,695 182,695 884,816
18 2019-20 469,441 148,543 617,985 292,822 262,689 555,511 150,000 31,500 181,500 912,263
19 2020-21 483,055 134,732 617,787 302,338 252,140 554,478 160,000 24,990 184,990 945,394
20 2021-22 497,064 120,520 617,584 312,164 241,247 553,411 165,000 18,165 183,165 974,228
21 2022-23 511,479 105,896 617,375 322,310 230,000 552,310 170,000 11,130 181,130 1,003,788
22 2023-24 526,312 90,849 617,160 332,785 218,388 551,173 180,000 3,780 183,780 1,039,096
23 2024-25 541,575 75,364 616,939 343,600 206,398 549,999 0 0 0 885,175
24 2025-26 557,280 59,431 616,711 354,767 194,019 548,786 0 0 0 912,048
25 2026-27 573,441 43,035 616,477 366,297 181,238 547,535 0 0 0 939,739
26 2027-28 590,071 26,164 616,236 378,202 168,041 546,242 0 0 0 968,273
27 2028-29 607,183 8,804 615,987 390,493 154,415 544,908 0 0 0 997,677
28 2029-30 0 0 0 403,185 140,346 543,530 0 0 0 403,185
29 2030-31 0 0 0 416,288 125,820 542,108 0 0 0 416,288
30 2031-32 0 0 0 429,817 110,822 540,639 0 0 0 429,817
31 2032-33 0 0 0 443,786 95,336 539,123 0 0 0 443,786
32 2033-34 0 0 0 458,209 79,347 537,557 0 0 0 458,209
33 2034-35 0 0 0 473,101 62,839 535,940 0 0 0 473,101
34 2035-36 0 0 0 488,477 45,794 534,271 0 0 0 488,477
35 2036-37 0 0 0 504,353 28,195 532,548 0 0 0 504,353
36 2037-38 0 0 0 520,744 10,024 530,768 0 0 0 520,744
37
38 Total $7,106,043 $1,538,002 $8,644,045 $8,615,711 $3,956,867 $12,572,579 $1,375,000 $275,415 $1,650,415 $17,096,754
39
40 Total EDUs [2]36,791 36,791 36,791 36,791
41
42 Total Debt Service $/EDU $193 $234 $37 $465
43
44
45
46 Notes:
47 [1] Debt service schedules from the City "Sewer Fund Analysis-working copy.xlsx".
48 [2] See Exhibit S-2 for total EDUs.
Page 9 of 18 Packet Pg 405
11
City of San Luis Obispo - Wastewater
Exhibit S-6
Summary of Reserve Funds
For the Year Ended June 30, 2016
Type Total
% Fee
Eligible [1] $ Fee Eligible
Cash $282,288 100%$282,288
Cash & Equivalents 27,988,970 100%27,988,970
Total $28,271,258 $28,271,258
Less:
Restricted
Debt Service $60,261 0%$0
Subsequent year expenditures 6,505,683 0%0
Committed
Rate Stabilization fund $697,600 0%0
Contingency fund 1,635,400 0%0
Total $8,898,944 $0
Net Available Cash Reserves $19,372,314 $28,271,258
Total EDUs [2]36,791
Total Cash Reserves $/EDU $768
Notes:
[1] Balance as of CAFR June 2016.
[2] See Exhibit S-2 for total EDUs.
Page 10 of 18 Packet Pg 406
11
1 City of San Luis Obispo - Wastewater Page 1 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
8 Wastewater Collection
9 Collection System Improvements
10 Sewer Lining Project - Design $32,610 $0 $0 $0 $0 $0 $0 $0 $0 $32,610 16.0%$5,218
11 Sewer Lining Project -Construction 425,000 0 0 0 0 0 0 0 0 425,000 16.0%68,000
12 Sewer Lining Project - Construction Management 35,000 0 0 0 0 0 0 0 0 35,000 16.0%5,600
13 RR Crossing @ Jennifer 2,735 0 0 0 0 0 0 0 0 2,735 16.0%438
14 RR Crossing @ Rachel 75,800 0 0 0 0 0 0 0 0 75,800 16.0%12,128
15 Stafford Taft Kentucky 633,527 0 0 0 0 0 0 0 0 633,527 16.0%101,364
16 Telemetry Upgrades 34,203 0 0 0 0 0 0 0 0 34,203 16.0%5,473
17 Radios 50,000 0 0 0 0 0 0 0 0 50,000 16.0%8,000
18 DN-Santa Barbara, Osos, Church, Leff, trench & pipe bursting 60,000 0 0 0 0 0 0 0 0 60,000 16.0%9,600
19 CN-Santa Barbara, Osos, Church, Leff, trench & pipe bursting 0 630,000 0 0 0 0 0 0 0 630,000 16.0%100,800
20 CM-Santa Barbara, Osos, Church, Leff, trench & pipe bursting 0 60,000 0 0 0 0 0 0 0 60,000 16.0%9,600
21 DN-Walnut, Morro, etc cured in place 0 17,000 0 0 0 0 0 0 0 17,000 16.0%2,720
22 CN-Walnut, Morro, etc cured in place 0 0 170,000 0 0 0 0 0 0 170,000 16.0%27,200
23 CM-Walnut, Morro, etc cured in place 0 0 17,000 0 0 0 0 0 0 17,000 16.0%2,720
24 DN-Albert, Slack, etc cured in place 0 17,000 0 0 0 0 0 0 0 17,000 16.0%2,720
25 CN-Albert, Slack, etc cured in place 0 0 170,000 0 0 0 0 0 0 170,000 16.0%27,200
26 CM-Albert, Slack, etc cured in place 0 0 17,000 0 0 0 0 0 0 17,000 16.0%2,720
27 DN-Foothill, etc trench & pipe bursting 0 5,000 0 0 0 0 0 0 0 5,000 16.0%800
28 CN-Foothill, etc trench & pipe bursting 0 0 50,000 0 0 0 0 0 0 50,000 16.0%8,000
29 CM-Foothill, etc trench & pipe bursting 0 0 5,000 0 0 0 0 0 0 5,000 16.0%800
30 DN-Murray, Chorro, Meinecke, etc trench & sewer replacement 0 33,000 0 0 0 0 0 0 0 33,000 16.0%5,280
31 CN-Murray, Chorro, Meinecke, etc trench & sewer replacement 0 0 330,000 0 0 0 0 0 0 330,000 16.0%52,800
32 CM-Murray, Chorro, Meinecke, etc trench & sewer replacement 0 0 33,000 0 0 0 0 0 0 33,000 16.0%5,280
33 DN-Walnut, Morro, etc trench & sewer replacement 0 40,000 0 0 0 0 0 0 0 40,000 16.0%6,400
34 CN-Walnut, Morro, etc trench & sewer replacement 0 0 400,000 0 0 0 0 0 0 400,000 16.0%64,000
35 CM-Walnut, Morro, etc trench & sewer replacement 0 0 40,000 0 0 0 0 0 0 40,000 16.0%6,400
36 DN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 110,000 0 0 0 0 0 0 110,000 16.0%17,600
37 CN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 1,100,000 0 0 0 0 0 1,100,000 16.0%176,000
38 CM-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 110,000 0 0 0 0 0 110,000 16.0%17,600
39 DN-Verde, Luneta, Serrano, Penman, Palomar, etc trench & pipe bursting 0 0 0 120,000 0 0 0 0 0 120,000 16.0%19,200
40 CN-Verde, Luneta, Serrano, Penman, Palomar, etc trench & pipe bursting 0 0 0 0 1,200,000 0 0 0 0 1,200,000 16.0%192,000
41 CM-Verde, Luneta, Serrano, Penman, Palomar, etc trench & pipe bursting 0 0 0 0 120,000 0 0 0 0 120,000 16.0%19,200
42 DN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 0 120,000 0 0 0 0 120,000 16.0%19,200
43 CN-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 0 0 1,200,000 0 0 0 1,200,000 16.0%192,000
44 CM-Westmont, Cerro Romaldo, Jeffrey, San Lucia, etc trench & pipe bursting 0 0 0 0 0 120,000 0 0 0 120,000 16.0%19,200
45 DN-Serrano, Bressi, Palomar, etc trench & pipe bursting 0 0 0 0 0 0 0 75,000 75,000 16.0%12,000
46 CN-Serrano, Bressi, Palomar, etc trench & pipe bursting 0 0 0 0 0 0 0 0 750,000 750,000 16.0%120,000
47 CM-Serrano, Bressi, Palomar, etc trench & pipe bursting 0 0 0 0 0 0 0 0 75,000 75,000 16.0%12,000
48 DN-Johnson, Buchon, etc trench & pipe bursting 0 0 0 0 0 0 0 0 100,000 100,000 16.0%16,000
49 CN-Johnson, Buchon, etc trench & pipe bursting 0 0 0 0 0 0 0 0 0 0 16.0%0
50 CM-Johnson, Buchon, etc trench & pipe bursting 0 0 0 0 0 0 0 0 0 0 16.0%0
51 Study-Foothill Chorro Project 0 60,000 0 0 0 0 0 0 0 60,000 50.0%30,000
52 DN-Foothill Chorro Project 0 0 0 0 0 0 0 450,000 450,000 50.0%225,000
53 CN-Foothill Chorro Project 0 0 0 0 0 0 0 0 7,000,000 7,000,000 50.0%3,500,000
54 CM-Foothill Chorro Project 0 0 0 0 0 0 0 0 700,000 700,000 50.0%350,000
55 Inflow/Infiltration Reduction 100,000 200,000 200,000 200,000 200,000 200,000 250,000 250,000 250,000 1,850,000 50.0%925,000
56 Lateral Replacement Program 0 0 0 0 0 0 0 0 0 0 16.0%0
57 Trench Repair 0 25,000 25,000 25,000 25,000 25,000 0 0 0 125,000 16.0%20,000
58 Raise Manholes 25,000 25,000 25,000 25,000 25,000 25,000 0 0 0 150,000 16.0%24,000
Proposed
Page 11 of 18 Packet Pg 407
11
1 City of San Luis Obispo - Wastewater Page 2 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
Proposed
59 Telemetry System Improvements 94,807 100,000 0 0 0 0 0 0 0 194,807 16.0%31,169
60 CN-Sewerline Improvement 09-10 0 0 0 0 0 0 0 0 0 0 16.0%0
61 CM-Sewerline Improvement 09-10 0 0 0 0 0 0 0 0 0 0 16.0%0
62 Collection System Infrastructure Replacement Strategy 0 0 0 0 0 0 0 0 0 0 16.0%0
63 Santa Rosa Siphon 520,000 0 0 0 0 0 0 0 0 520,000 16.0%83,200
64 Jennifer St RR Crossing Design 0 0 0 0 0 0 0 0 0 0 16.0%0
65 California Sewerline Rerouting-Study 0 0 0 0 0 0 0 0 0 0 0%0
66 Sewerline Repl Rachel 941 0 0 0 0 0 0 0 0 941 0%0
67 Sewerline Repl Stafford 5,510 0 0 0 0 0 0 0 0 5,510 16.0%882
68 Marsh St Siphon (PW project)271,618 0 0 0 0 0 0 0 0 271,618 16.0%43,459
69 SY-JENNIFER RR/HIG-MARSH 19,222 0 0 0 0 0 0 0 0 19,222 16.0%3,076
70 CN-JENNIFER RR/HIG-MARSH 1,400,000 0 0 0 0 0 0 0 0 1,400,000 16.0%224,000
71 DN-SANTA ROSA SWRLINE REPL 0 0 0 0 0 0 0 0 0 0 16.0%0
72 CN-SANTA ROSA SWRLINE REPL 0 0 0 0 0 0 0 0 0 0 16.0%0
73 CM-Santa Rosa Sewerline Repl 0 0 0 0 0 0 0 0 0 0 16.0%0
74 RR Safety Trail Hath/Taft 0 0 0 0 0 0 0 0 0 0 16.0%0
75 SCADA Upgrade Integration 15,993 0 0 0 0 0 0 0 0 15,993 0%0
76 Recycled Water System-Reservoir Study 0 25,000 0 0 0 0 0 0 0 25,000 0%0
77 RW SCADA Study 0 0 9,000 0 0 0 0 0 0 9,000 0%0
78 Automatic Meter Pilot Study 0 0 4,000 0 0 0 0 0 0 4,000 0%0
79 IT - CityWorks 11,412 0 0 0 0 0 250,000 0 0 261,412 0%0
80 Fleet Replacement: 1/2 Ton Pickup 0 0 0 0 0 0 0 0 0 0 0%0
81 Fleet Replacement: Hydro-Cleaner 0 0 0 410,000 0 0 0 0 0 410,000 16.0%65,600
82 Fleet Replacement: Portable Generators (50% share)0 0 0 0 0 0 0 0 0 0 0%0
83 Fleet Replacement: CCTV Van 135,902 0 0 0 0 0 0 0 0 135,902 16.0%21,744
84 Fleet Replacement: 1 1/2 Ton Service Trucks 144,000 0 0 0 0 0 0 0 0 144,000 16.0%23,040
85 Fleet Replacement: Portable Sewage Pump 36,900 0 0 0 0 0 0 0 0 36,900 16.0%5,904
86 Fleet Replacement: Trailer, Portable Concrete Mixer 0 25,000 0 0 0 0 0 0 0 25,000 16.0%4,000
87 Fleet Replacement: Caterpillar Mini Excavator (pooled)0 0 0 0 0 70,000 0 0 0 70,000 16.0%11,200
88 Catchment [3]
89 Margarita 1,500,000 0 0 0 0 0 0 0 0 1,500,000 49.4%741,725
90 Tank Farm 18,325,682 0 0 0 0 0 0 0 0 18,325,682 46.6%8,532,321
91 Silver City 2,150,000 0 0 0 0 0 0 0 0 2,150,000 14.9%319,479
92 Calle Joaquin 4,000,000 0 0 0 0 0 0 0 0 4,000,000 44.5%1,778,150
93 Laguna 3,121,300 0 0 0 0 0 0 0 0 3,121,300 23.8%743,281
94 Airport 2,130,000 0 0 0 0 0 0 0 0 2,130,000 69.7%1,483,818
95 Foothill 2,098,000 0 0 0 0 0 0 0 0 2,098,000 23.4%491,021
96 Buckley 793,118 0 0 0 0 0 0 0 0 793,118 100.0%793,118
97 Total Collection $38,248,280 $1,262,000 $1,605,000 $1,990,000 $1,690,000 $1,640,000 $500,000 $775,000 $8,875,000 $56,585,280 $21,847,448
98
99 Water Resource Recovery Facility
100 Major Maintenance $1,137,884 $0 $0 $0 $0 $0 $875,000 $875,000 $875,000 $3,762,884 16.0%$602,061
101 Influent Pump Replacement 155,705 0 0 0 0 0 0 0 0 155,705 16.0%24,913
102 WRRF Energy Efficiency 0 0 0 0 0 0 0 0 0 16.0%0
103 Design 1,325 0 0 0 0 0 0 0 0 1,325 16.0%212
104 Construction 3,861 0 0 0 0 0 0 0 0 3,861 16.0%618
105 WRRF Upgrade 0 0 0 0 0 0 0 0 0 16.0%0
106 Study/Environmental 382,151 0 0 0 0 0 0 0 0 382,151 16.0%61,144
107 Program Management 1,305,544 1,500,000 0 0 0 0 0 0 0 2,805,544 16.0%448,887
108 Design 6,063,682 0 0 0 0 0 0 0 6,063,682 16.0%970,189
109 amendment to CH2M 1,000,000 0 0 0 0 0 0 0 1,000,000 16.0%160,000
Page 12 of 18 Packet Pg 408
11
1 City of San Luis Obispo - Wastewater Page 3 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
Proposed
110 Construction 0 0 0 0 0 0 0 0 0 16.0%0
111 Infrastructure 0 80,000,000 35,000,000 25,000,000 0 0 0 0 0 140,000,000 16.0%22,400,000
112 Disinfection 0 0 0 0 0 0 0 0 0 0 16.0%0
113 Nutrient Removal 0 0 0 0 0 0 0 0 0 0 16.0%0
114 Contingency 0 0 0 0 0 0 0 0 0 0 16.0%0
115 Flood Control 0 0 0 0 0 0 0 0 0 0 16.0%0
116 Construction Management 0 0 0 0 0 0 0 0 0 0 16.0%0
117 WRRF Fiber Optic Impr 0 0 0 0 0 0 0 0 0 0 16.0%0
118 Digester 2 Cleaning 0 0 0 0 0 0 0 0 0 0 16.0%0
119 WRF Sludge Bed 0 0 0 0 0 0 0 0 0 0 16.0%0
120 WRRF Cooling Towers 0 0 0 0 0 0 0 0 0 0 16.0%0
121 IT - iFix Replacement 0 0 0 250,000 0 0 0 0 0 250,000 16.0%40,000
122 IT - HachWims 0 0 0 30,000 0 0 0 0 0 30,000 16.0%4,800
123 IT - MP2 Replacement 0 0 0 30,000 0 0 0 0 0 30,000 16.0%4,800
124 Fleet Replacement: Utility Trucks (3)0 57,600 0 0 0 0 0 0 0 57,600 0%0
125 Fleet Replacement: Sedan 33,000 0 0 0 0 0 0 0 0 33,000 0%0
126 Fleet Replacement: 4-Wheel Drive Loader 0 0 0 0 0 0 0 0 0 0 0%0
127 Fleet Replacement: Pickup Truck w/Flat Bed & Crane 0 0 0 0 0 0 0 0 0 0 0%0
128 Fleet Replacement: Compact Pickup Truck 0 0 0 0 36,000 0 0 0 0 36,000 0%0
129 Fleet Replacement: Decanter Trailer 0 0 0 0 0 0 0 0 0 0 0%0
130 Fleet Replacement: Club Cars - Electric 0 0 60,000 0 0 0 0 0 0 60,000 0%0
131 Fleet Replacement: Dump Truck 0 0 0 0 150,000 0 0 0 0 150,000 0%0
132 Fleet Replacement: Forklift 0 0 0 0 0 55,000 0 0 0 55,000 0%0
133 Total WRRF $10,083,153 $81,557,600 $35,060,000 $25,310,000 $186,000 $55,000 $875,000 $875,000 $875,000 $154,876,753 $24,717,624
134
135 Pretreatment
136 Fleet Replacement: Prius $0 $0 $0 $35,000 $0 $0 $0 $0 $0 $35,000 16.0%$5,600
137 Fleet Replacement: Pickup Truck $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0%0
138
139 Distribution
140 Water Meters and boxes $134,528 $82,500 $90,000 $90,000 $90,000 $90,000 $0 $0 $0 $577,028 0%$0
141
142 Water Quality Laboratory
143 Fleet Replacement: Pickup Truck $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0%$0
144
145 Administration and Engineering
146 From Creek Decom $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0%$0
147 Street Reconstruction 2013 0 0 0 0 0 0 0 0 0 0 0%0
148 EA-UB SYSTEM UPGRADE 0 0 0 0 0 0 0 0 0 0 0%0
149 Fleet Replacement: Prius 0 0 0 35,000 0 0 0 0 0 35,000 0%0
150 Control System Trucks 40,090 0 0 0 0 0 0 0 0 40,090 16.0%6,414
151 879 Morro Refurb 7,545 0 0 0 0 0 0 0 0 7,545 0%0
152 Shared - Mobile Equipment Lifts & Safety Stands 0 0 0 0 0 0 0 0 0 0 0%0
153 Total Admin $47,635 $0 $0 $35,000 $0 $0 $0 $0 $0 $82,635 $6,414
154
155 Total Wastewater Services CIP Requests $0 $0 $0 $0 $1,250,000 $1,500,000 $1,750,000 $2,000,000 $2,250,000 $8,750,000 16.0%$1,400,000
156
157 Shared Information Technology
158 Server Operating System $4,260 $0 $0 $0 $0 $0 $0 $0 $0 $4,260 0.0%$0
159 VOIP 0 15,789 0 0 0 0 0 0 0 15,789 16.0%2,526
160 City Website Upgrade (4% share)0 0 0 0 0 0 0 0 0 0 0.0%0
Page 13 of 18 Packet Pg 409
11
1 City of San Luis Obispo - Wastewater Page 4 of 4
2 Exhibit S-7
3 Development of the Wastewater Capacity and Connection Fee Future Capital Improvements
4
5
6
7 CAPITAL IMPROVEMENT PLAN [1]2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Total
% Fee
Eligible
[2] $ Fee Eligible
Proposed
161 UB System Upgrade 1,667 0 0 0 0 0 0 0 0 1,667 0.0%0
162 Network Firewalls 0 0 0 8,918 0 0 0 0 0 8,918 0.0%0
163 Virtual Private Network (VPN) Replacement 0 0 0 18,958 0 0 0 0 0 18,958 16.0%3,033
164 Network Switching Infrastructure Replacement 0 0 0 27,252 0 0 0 0 0 27,252 16.0%4,360
165 Radio Handhelds and Mobile Replacements 0 42,960 0 0 0 0 0 0 0 42,960 16.0%6,874
166 Tait Radio System 0 0 42,960 0 0 0 0 0 0 42,960 16.0%6,874
167 Document Management System 0 0 0 0 0 0 0 0 0 0 0.0%0
168 Office Application Software Replacement 9,000 0 0 0 0 0 0 0 0 9,000 0.0%0
169 VM Infrastructure 20,615 0 0 20,615 0 0 0 0 0 41,230 16.0%6,597
170 Enterprise Storage Growth 0 0 0 0 0 0 0 0 0 0 0.0%0
171 CA-FOX PRO REPLACE 0 0 0 0 0 0 0 0 0 0 0.0%0
172 CA-LASERFICHE 0 0 0 0 0 0 0 0 0 0 0.0%0
173 GPS System replacement 0 0 0 0 0 0 0 0 0 0 0.0%0
174 UPS Battery Replacement 4,345 8,690 4,345 0 0 0 0 0 0 17,380 16.0%2,781
175 Total Share of Information Technology CIP $39,887 $67,439 $47,305 $75,743 $0 $0 $0 $0 $0 $230,374 $33,045
176
177
178 TOTAL WASTEWATER FUND CAPITAL PLAN $48,553,482 $82,969,539 $36,802,305 $27,535,743 $3,216,000 $3,285,000 $3,125,000 $3,650,000 $12,000,000 $221,137,069 $48,010,131
179
180 Notes:
181 [1] From the City "Sewer Fund Analysis-working copy.xlsx" and additional projects from City.Treatment $24,717,624
182 [2] Based on growth EDUs, growth is 16% of total EDUs, 5,821/36,791 = 16%. See Exhibit S-2. Catchment % fee eligible based on City specific analysis based on wastewater flow of 134 gpd.Collection 23,292,507
Total $48,010,131
OK
Page 14 of 18 Packet Pg 410
11
City of San Luis Obispo - Wastewater
Exhibit S-8
Allowable Wastewater Capacity and Connection Fees
Component Buy-in +
Upgrade Future Debt
Service
Total
($/EDU)
Full Cost [1]
Treatment $1,145 $4,246 $0 $5,391
Collection 2,906 4,002 0 6,908
Debt Service 0 0 (465) (465)
Cash Reserves 768 0 0 768
------------ ------------ ------------ ------------
Net Allowable Capacity and Connection Fee $4,819 $8,248 ($465)$12,602
Fee without Catchment [2]
Treatment $1,145 $4,246 $0 $5,391
Collection 2,906 4,002 0 6,908
Less: Catchment (523)(2,557) 0 (3,080)
Debt Service 0 0 (465) (465)
Cash Reserves 768 0 0 768
------------ ------------ ------------ ------------
Net Allowable Capacity and Connection Fee $4,296 $5,691 ($465)$9,522
Difference of Full Cost and Without Catchment $523 $2,557 $0 $3,080
Notes:
[1] Catchment infrastructure cost included.
[2] Catchment infrastructure not included. See Exhibit S-4B.
Area
Full Cost
Capacity and
Connection Fee
Fee Cost
without
Catchment
Total
Catchment
Total Fee w/
Catchment
Area Area
City Wide
Fee
Total
Catchment
Total Impact
Fee
Margarita $12,602 $9,522 $3,830 = $3,830 $13,352 Margarita $3,755 $2,764 $2,764 $6,519
Tank Farm 12,602 9,522 3,192 = 3,192 12,714 Tank Farm 3,755 3,655 3,655 7,410
Silver City 12,602 9,522 1,995 434 =2,429 11,951 Silver City 3,755 872 493 =1,365 4,627
Calle Joaquin 12,602 9,522 2,464 434 =2,898 12,421 Calle Joaquin 3,755 1,349 493 =1,842 5,104
Laguna 12,602 9,522 434 = 434 9,957 Laguna 3,755 493 493 4,248
Airport 12,602 9,522 3,180 3,192 =6,372 15,894
Foothill 12,602 9,522 22,319 = 22,319 31,841
Buckley 12,602 9,522 643 = 643 10,165
Current Wastewater Development Impact Fee
Plus: Catchment
Calculated Wastewater Capacity and Connection Fee
Plus: Catchment
Page 15 of 18 Packet Pg 411
11
City of San Luis Obispo - Wastewater
Exhibit S-9
Summary of Catchment Calculation
Area Wastewater Flow
(Gallons Per Day)% Improvement Cost
Apportionment
Existing Flow 26,529 51%$758,275
Future Flow 25,950 49%741,725 $3,830
Total 52,479 $1,500,000
Existing Flow 411,145 53%$9,793,361
Future Flow 358,204 47%8,532,321 $3,192
Total 769,349 Total Cost $18,325,682
Plus Lag.Total
Existing Flow 122,971 85%$1,830,521
Future Flow 21,462 15%319,479 $1,995 $434 $2,429
Total 144,433 $2,150,000
Plus Lag.Total
Existing Flow 120,827 56%$2,221,850
Future Flow 96,698 44%1,778,150 $2,464 $434 $2,898
Total 217,525 $4,000,000
Existing Flow 733,688 76%$2,378,019
Future Flow 229,324 24%743,281 $434
Total Flow 963,012 $3,121,300
Airport Catchment Area Plus TF.Total
Existing Flow 27,227 30%$646,182
Future Flow 62,521 70%1,483,818 $3,180 $3,192 $6,372
Total Flow 89,748 $2,130,000NOTE: Costs
for the Airport
Existing Flow 9,648 77%$1,606,979
Future Flow 2,948 23%491,021 $22,319
Total Flow 12,596 $2,098,000
Plus TF Total
Existing Flow 0 0%NA
Future Flow 165,233 100%NA $793,118 $643 $643
Total 165,233 NA
Cost attributed Cost attributed
Area to Existing to Future Dev TOTAL
Margarita $758,275 $741,725 $1,500,000
Tank Farm 9,793,361 8,532,321 18,325,682
Silver City 1,830,521 319,479 2,150,000
Calle Joaquin 2,221,850 1,778,150 4,000,000
Laguna 2,378,019 743,281 3,121,300
Airport 646,182 1,483,818 2,130,000
Foothill 1,606,979 491,021 2,098,000
Buckley 0 793,118 793,118
Total $19,235,186 $14,882,914 $34,118,100
Foothill Catchment Area
Laguna Catchment Area
Cost per EDU (134 gallons = 1 EDU)
Buckley Catchment Area
Tank Farm Catchment Area
Margarita Catchment Area
Calle Joaquin Catchment Area
Silver City Catchment Area
Page 16 of 18 Packet Pg 412
11
City of San Luis Obispo - Wastewater
Exhibit S-10
Summary of Wastewater Capcity and Connection Fee Schedule
CURRENT WASTEWATER DEVELOPMENT IMPACT FEES AS OF 7/1/2017
Land Use Type EDU*Citywide Margarita Tank Farm Silver City Calle Joaquin Laguna
RESIDENTIAL (per unit)
Single Family Residential 1.0 $3,830.21 $2,819.50 $3,728,52 $1,392.80 $1,878.64 $503.30
Multi-Family Residential 0.7 2,681.14 1,973.65 2,609.96 974.96 1,315.05 352.31
Mobile Home 0.6 2,298.12 1,691.70 2,237.11 835.68 1,127.18 301.98
Studio Unit (450 s.f. or less)0.3 1,149.06 845.85 1,118.56 417.84 563.59 150.99
NON-RESIDENTIAL
Meter Size
5/8" to 3/4"-inch 1.0 $3,830.21 $2,819.50 $3,728.52 $1,392.80 $1,878.64 $503.30
1-inch 1.7 6,511.35 4,793.15 6,338.48 2,367.76 3,193.69 855.61
1-1/2 inch 3.4 13,022.70 9,586.30 12,676.96 4,735.53 6,387.37 1,711.22
2-inch 5.4 20,683.11 15,225.30 20,134.00 7,521.13 10,144.65 2,717.81
3-inch 10.7 40,983.19 30,168.64 39,895.14 14,902.98 20,101.44 5,385.30
4-inch 16.7 63,964.42 47,085.64 62,266.25 23,259.79 31,373.27 8,405.09
6-inch 33.4 127,928.85 94,171.28 124,532.51 46,519.58 62,746.54 16,810.17
* Equivalent dwelling unit
CALCULATED CAPACITY AND CONNECTION FEE WITH CATCHMENT AREAS
Land Use Type EDU*Citywide Margarita Tank Farm Silver City Calle Joaquin Laguna Airport Foothill Buckley
RESIDENTIAL (per unit)
Residential (greater than 800 s.f.)1.0 $9,522 $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
Residential (451 s.f. to 800 s.f.)0.7 6,666 2,681 2,234 1,700 2,029 304 4,460 15,623 450
Mobile Home 0.6 5,713 2,298 1,915 1,457 1,739 261 3,823 13,391 386
Studio Unit (450 sf or less)0.3 2,857 1,149 958 729 870 130 1,912 6,696 193
NON-RESIDENTIAL
Meter Size
5/8" to 3/4"-inch 1.0 $9,522 $3,830 $3,192 $2,429 $2,898 $434 $6,372 $22,319 $643
1-inch 1.7 16,188 6,511 5,426 4,129 4,927 738 10,833 37,943 1,093
1-1/2 inch 3.4 32,375 13,022 10,852 8,259 9,855 1,477 21,665 75,885 2,187
2-inch 5.4 51,420 20,683 17,236 13,117 15,651 2,345 34,409 120,523 3,473
3-inch 10.7 101,887 40,982 34,153 25,990 31,013 4,647 68,181 238,815 6,882
4-inch 16.7 159,021 63,963 53,304 40,565 48,403 7,253 106,414 372,730 10,741
6-inch 33.4 318,041 127,925 106,608 81,129 96,807 14,506 212,828 745,460 21,483
CALCULATED CAPACITY AND CONNECTION FEE WITHOUT CATCHMENT AREAS
Full Cost
Land Use Type EDU*
Capacity and
Connection Fee
RESIDENTIAL (per unit)
Residential (greater than 800 s.f.)1.0 $12,602
Residential (451 s.f. to 800 s.f.)0.7 8,821
Mobile Home 0.6 7,561
Studio Unit (450 sf or less)0.3 3,781
NON-RESIDENTIAL
Meter Size
5/8" to 3/4"-inch 1.0 $12,602
1-inch 1.7 21,423
1-1/2 inch 3.4 42,847
2-inch 5.4 68,051
3-inch 10.7 134,841
4-inch 16.7 210,453
6-inch 33.4 420,907
Additional Catchment Area Charges
Capacity and Connection Fee
Impact Fee
Additional Catchment Area Charges
Page 17 of 18 Packet Pg 413
11
Current Fee Option #3 Option #4
Future Portion of
Treatment Project
plus Financing
Cost
Current Fee plus
Future Portion of
Project plus
Financing Cost
Existing
(Replacement Cost
Less Depreciation)
plus Future plus
Financing Cost
Difference between Option
#1 and Option #2
Existing Fee - Future Capacity Projects
Studies $43,065 $43,065
Design 1,004,844 1,004,844
Construction Infrastructure 4,475,863 4,475,863
Construction Nutrient Removal 11,328,900 11,328,900
Construction management 1,291,942 1,291,942
Unit #3 4,324,359 4,324,359
Unit #4 3,358,717 3,358,717
Total Existing Fee Future Plant $25,827,691 $25,827,691
Existing Fee Future EDUs 6,927 6,927
Existing Fee $/EDU $3,729 $3,729 ($3,729)
New Future Plant
Treatment [1]$25,821,264 $24,717,624 (190)
Collection 0 23,292,507 4,002
Total New Future Plant $25,821,264 $48,010,131
Total New Future EDUs 5,821 5,821
New Future Plant $/EDU $4,436 $8,248
Future Plant $/EDU $3,729 $8,165 $8,248 $83
Existing Plant
Treatment $42,138,027 1,145
Collection 106,909,803 2,906
Plus: Cash balances 28,271,258 768
Total Existing Plant $177,319,088
Total EDUs 36,791
Existing Plant $/EDU $4,819 $4,820
Debt Credit ($465)($465)
Catchment [3]$19,118,800 $14,882,914
Total Future EDUs 6,927 5,821
Catchment Cost per EDU $2,760 $2,557 ($2,557)
Total Future and Existing $/EDU $6,489 $10,721 $12,602 $1,881
Current Fee (ENR
7/1/2017)
Option #1 with
separate
Catchment
Option #2 with
Separate
Catchment
Citywide $3,830.21 $8,165 $9,522 See Exhibit S-8 and S-10
Additional Catchment Area Charges
Margarita $2,819.50 $3,830 $3,830 See Exhibit S-9 and S-10
Tank Farm 3,728.52 3,192 3,192 See Exhibit S-9 and S-10
Silver City 1,392.80 2,429 2,429 See Exhibit S-9 and S-10
Calle Joaquin 1,878.64 2,898 2,898 See Exhibit S-9 and S-10
Laguna 503.30 434 434 See Exhibit S-9 and S-10
Airport 6,372 6,372 See Exhibit S-9 and S-10
Foothill 22,319 22,319 See Exhibit S-9 and S-10
Buckley 643 643 See Exhibit S-9 and S-10
[1] Option #1 is WRRF 20% of growth related equals $30 million project, plus interest at 2%
[2] Future EDUs are net of Vested/ Pending projects
[3] Catchment fee currently is in addition to capacity fee and based on usage in specific area.
Wastewater Capacity Fee and Connection Fee
Page 18 of 18 Packet Pg 414
11
1
Oakland Sacramento Denver Los Angeles
April 3, 2018April 3, 2018
San Luis Obispo Capital
Facilities Fee Update
presented to
San Luis Obispo City Council
presented by
Economic & Planning Systems, Inc.
1San Luis Obispo Capital Facilities Fee Update
1.Receive a presentation on the Capital Facilities Fee Program Nexus
Study, which identifies various infrastructure projects associated
with transportation, parkland and park improvements, police, fire,
and general government facilities, and calculates new
development’s fair share of the cost of these facilities;
2.Consider recommended policy adjustments to reduce the fair share
for new development to ensure the feasibility of various
development types, including multi‐family and smaller single‐family
units;
3.Introduce an Ordinance and Resolution to adopt and implement the
recommended Capital Facilities Fee Program; and
4.Adopt a Resolution to adopt and implement the recommended
Water and Wastewater Development Impact Fee Program.
RECOMMENDATION
04-03-2018 Item 11, Presentation
2
2San Luis Obispo Capital Facilities Fee Update
STUDY SCOPE
Updated
Transportation
Parks
(Water/
Wastewater)
New
General
Government
Police
Fire
Not
Affected
Affordable
Housing
Art In-Lieu
Fee
School
District Fees
3San Luis Obispo Capital Facilities Fee Update
TASKS COMPLETED SINCE
1/9/18 STUDY SESSION
04-03-2018 Item 11, Presentation
3
4San Luis Obispo Capital Facilities Fee Update
Citywide Transportation Fee Program
Incentivize Missing Middle Housing
Reduce Fees to Improve Feasibility
COUNCIL DIRECTION
5San Luis Obispo Capital Facilities Fee Update
Technical Adjustments
•Transportation Project List and Cost Estimates
•Police HQ Cost Estimates
Revised Maximum Fee Calculations
Additional Coordination with Stakeholders
Recommended Fees
•Certain fees not charged
•Policy discounts
•Incentives (transportation tiering, a form of discount)
RESPONSE
04-03-2018 Item 11, Presentation
4
6San Luis Obispo Capital Facilities Fee Update
SUMMARY OF
TRANSPORTATION FEE
CALCULATIONS
7San Luis Obispo Capital Facilities Fee Update
TRANSPORTATION: Existing Geography
04-03-2018 Item 11, Presentation
5
8San Luis Obispo Capital Facilities Fee Update
TRANSPORTATION: Proposed Geography
9San Luis Obispo Capital Facilities Fee Update
TRANSPORTATION: Fee Over Time
Land Use Fee
% Change
from Oct. Fee
% Change
from Oct.
Residential
Single Family
1,400 Sq.Ft. or Larger (per Unit)$6,859 $12,384 $11,109 $9,828 -11.5% $9,828 -11.5%
Between 700 and 1,400 Sq.Ft.$6,859 $12,384 $11,109 $9,828 -11.5% $7.02/ Sq.Ft.n/a
Up to 699 Sq.Ft. (per Unit)$6,859 $12,384 $11,109 $9,828 -11.5% $4,914 -55.8%
Multifamily
1,100 Sq.Ft. or Larger (per Unit)$5,389 $9,730 $8,728 $7,636 -12.5% $7,636 -12.5%
Between 550 and 1,100 Sq.Ft.$5,389 $9,730 $8,728 $7,636 -12.5% $6.94/ Sq.Ft.n/a
Up to 549 Sq.Ft. (per Unit)$5,389 $9,730 $8,728 $7,636 -12.5% $3,818 -56.3%
Non-Residential
Office (per Sq.Ft.) $8.35 $15.07 $13.52 $11.16 -17.4% $9.47 -29.9%
Service (per Sq.Ft.) $8.35 $15.07 $13.52 $11.16 -17.4% $9.47 -29.9%
Retail (per Sq.Ft.) $29.45 $53.18 $47.70 $34.45 -27.8% $13.75 -71.2%
Industrial (per Sq.Ft.) $10.89 $19.66 $17.64 $6.86 -61.1% $5.82 -67.0%
Institutional (per Sq.Ft.) $8.35 $15.07 $13.52 $11.16 -17.4% $11.14 -17.6%
Lodging (per Room) $3,056 $5,518 $4,950 $9,913 100.3% $3,958 -20.0%
Recommended
Fees*
Maximum Calculated Fees
March 2018 October 2017
North
Area
South
Area
City-
wide
Citywide Citywide
04-03-2018 Item 11, Presentation
6
10San Luis Obispo Capital Facilities Fee Update
TRANSPORTATION: Cost Allocation
Fee Program:
$169.4 M
City:
$66.9 M
Total Project Costs $271.6 MillionRegional Funding:
$23.9 Million
Developer Contribution:
$31.3 Million
Grants/Other Sources:
$23.8 Million
Existing Development:
$49.3 Million
New Development:
$143.4 Million
Less Fees Collected:
$135.8 Million
Direct
Developer
Contribution
$31,265,720
Grants/Other
Sources
$23,800,000
Regional
Funding
$23,866,296
Existing
Development
$49,335,040
Fee Program
$135,781,280
Current Fund
Balance
$7,596,878
11San Luis Obispo Capital Facilities Fee Update
SUMMARY OF POLICY
DISCOUNTS AND
RECOMMENDED FEES
04-03-2018 Item 11, Presentation
7
12San Luis Obispo Capital Facilities Fee Update
Transportation
1.Single family fee is tiered to incentivize smaller, more
affordable units.
•Max fee applies to single family units of 1,400 sq.ft.
and above
•Below 1,400 sq.ft., fees decrease proportionally by
size
2.Multifamily fee is tiered so that the multifamily fee
never exceeds the single family fee for the same unit
size.
3.Retail and hotel uses are discounted by 60%
4.Office and industrial uses are discounted by 15%
POLICY DISCOUNTS AND INCENTIVES
13San Luis Obispo Capital Facilities Fee Update
Parks
1.Maintain maximum single family and multifamily fees
2.Do not charge commercial development
Public Safety
1.Discount police fees by 54% to maintain fee level,
despite increase in costs
General Government
1.Do not charge at all
Utilities
1.Water –use Option #1, plus residential tiering
2.Wastewater –use Option #3, plus residential tiering
DISCOUNTS AND INCENTIVES, CONTINUED
04-03-2018 Item 11, Presentation
8
14San Luis Obispo Capital Facilities Fee Update
While policy discounts help achieve feasibility objectives,
allowing desired development to go forward, funding
gaps are created.
Funding gaps create the need to identify and secure
other funding.
Example ‐Transportation
Funding gaps in transportation, with significant delay in
filling that gap may result in multimodal goals being
delayed because infrastructure is not in place when
development occurs.
NEED FOR ADDITIONAL FUNDING
15San Luis Obispo Capital Facilities Fee Update
Recommended Fees
Land Use
Residential
Single Family
1,400 Sq.Ft. or Larger (per Unit) $9,828 $6,030 $0 $668 $569 $17,096
Between 700 and 1,400 Sq.Ft.
(Transportation Fee is Per Sq.Ft.
Other Fees are per Unit)
$7.02 $6,030 $0 $668 $569
Requires
Calculation
Up to 699 Sq.Ft. (per Unit) $4,914 $6,030 $0 $668 $569 $12,182
Multifamily (per Unit)
1,100 Sq.Ft. or Larger (per Unit) $7,636 $3,530 $0 $481 $410 $12,057
Between 550 and 1,100 Sq.Ft.
(Transportation Fee is Per Sq.Ft.
Other Fees are per Unit)
$6.94 $3,530 $0 $481 $410
Requires
Calculation
Up to 549 Sq.Ft. (per Unit) $3,818 $3,530 $0 $481 $410 $8,239
Non-Residential
Office (per Sq.Ft.) $9.47 $0 $0 $0.44 $0.38 $10.29
Service (per Sq.Ft.) $9.47 $0 $0 $0.24 $0.21 $9.92
Retail (per Sq.Ft.) $13.75 $0 $0 $0.24 $0.21 $14.20
Industrial (per Sq.Ft.) $5.82 $0 $0 $0.18 $0.15 $6.15
Institutional (per Sq.Ft.) $11.14 $0 $0 $0.24 $0.21 $11.59
Lodging (per Room) $3,958 $0 $0 $133 $113 $4,205
General
GovernmentParksTransportation Recommended
FeePolice Fire
04-03-2018 Item 11, Presentation
9
16San Luis Obispo Capital Facilities Fee Update
FEASIBILITY
CONSIDERATIONS OF
RECOMMENDED FEES
17San Luis Obispo Capital Facilities Fee Update
Single Family Prototype 1
Square Feet: 1,650
Price/Unit: $650,000
10% of Avg.
Sale Price
15% of Avg.
Sale Price
20% of Avg.
Sale Price
Key
Other fee obligations
include school district fees,
public art in‐lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy”
affordable housing fee is
calculated at 5% of the
building permit valuation,
estimated at 50% of sales
price.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 1,650 sq.ft unit.
32.6%
04-03-2018 Item 11, Presentation
10
18San Luis Obispo Capital Facilities Fee Update
Single Family Prototype 2
Square Feet: 1,100
Price/Unit: $525,000
10% of Avg.
Sale Price
15% of Avg.
Sale Price
20% of Avg.
Sale Price
Key
Other fee obligations
include school district fees,
public art in‐lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy”
affordable housing fee is
calculated at 5% of the
building permit valuation,
estimated at 50% of sales
price.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 1,100 sq.ft unit.
20.6%
19San Luis Obispo Capital Facilities Fee Update
Multifamily Rental Prototype
Square Feet/ Unit: 800
Price/Unit: $400,000
Key
5% of Avg.
Sale Price
10% of Avg.
Sale Price
15% of Avg.
Sale Price
Other fee obligations
include school district
fees, public art in‐lieu
fee, and the affordable
housing fee where
applicable. These fees
are not part of this
current fee update.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 800 sq.ft. unit.
71.4%
04-03-2018 Item 11, Presentation
11
20San Luis Obispo Capital Facilities Fee Update
Retail Prototype
Square Feet: 10,000
Price/Square Foot: $300
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 10,000 sq.ft. building.
Other fee obligations
include school district fees,
public art in‐lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
42.8%
21San Luis Obispo Capital Facilities Fee Update
Office/Business Park Prototype
Square Feet: 10,000
Price/Square Foot: $425
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 10,000 sq.ft. building.
Other fee obligations
include school district fees,
public art in‐lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
17.1%
04-03-2018 Item 11, Presentation
12
22San Luis Obispo Capital Facilities Fee Update
Office/Service Prototype
Square Feet: 10,000
Price/Square Foot: $300
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 10,000 sq.ft. building.
Other fee obligations
include school district fees,
public art in‐lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
18.4%
23San Luis Obispo Capital Facilities Fee Update
Industrial Prototype
Square Feet: 17,424
Price/Square Foot: $200
5% of Avg.
Sale Price
7.5% of Avg.
Sale Price
10% of Avg.
Sale Price
Key
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 17,424 sq.ft. building.
Other fee obligations
include school district fees,
public art in‐lieu fee, and
the affordable housing fee
where applicable. These
fees are not part of this
current fee update.
Outside of the expansion
area, the “proxy” affordable
housing fee is calculated at
5% of the building permit
valuation, estimated at 50%
of per square foot sales
price.
45.9%
04-03-2018 Item 11, Presentation
13
24San Luis Obispo Capital Facilities Fee Update
HOW DOES SLO COMPARE?
Davis Napa Palm
Springs
Paso
Robles
Santa
Cruz
Santa
Maria
Benchmark Cities
•Residential: mid- to upper- range
•Non-Residential: mid-range
•Residential: mid-range
•Residential: mid-range
•Non-Residential: mid- to upper- range*
Public Safety
Parks
Transportation
*Relationship depends on actual use type
25San Luis Obispo Capital Facilities Fee Update
Public Safety
Comparable Cities w/o Public Safety Fees
-Palm Springs
-Santa Cruz
-Palm Springs
-Santa Cruz
-Palm Springs
-Santa Cruz
-Palm Springs
-Santa Cruz
-Palm Springs
-Santa Cruz
-Napa
-Davis
-Palm Springs
-Santa Cruz% Above Base% Below Base04-03-2018 Item 11, Presentation
14
26San Luis Obispo Capital Facilities Fee Update
Parks
Comparable Cities w/o
Parks Fees
-Napa
-Palm Springs
-Santa Cruz
-Napa
-Palm Springs
-Santa Cruz% Above Base% Below Base27San Luis Obispo Capital Facilities Fee Update
Transportation
Comparable Cities w/o Transportation Fees
-Davis% Above Base% Below Base04-03-2018 Item 11, Presentation
15
28San Luis Obispo Capital Facilities Fee Update
Council Meeting on 4/17
2nd Ordinance Reading
10‐Year CIP
Alternative Funding Efforts
NEXT STEPS
29San Luis Obispo Capital Facilities Fee Update
1.Receive a presentation on the Capital Facilities Fee Program Nexus
Study, which identifies various infrastructure projects associated
with transportation, parkland and park improvements, police, fire,
and general government facilities, and calculates new
development’s fair share of the cost of these facilities;
2.Consider recommended policy adjustments to reduce the fair share
for new development to ensure the feasibility of various
development types, including multi‐family and smaller single‐family
units;
3.Introduce an Ordinance and Resolution to adopt and implement the
recommended Capital Facilities Fee Program; and
4.Adopt a Resolution to adopt and implement the recommended
Water and Wastewater Development Impact Fee Program.
RECOMMENDATION
04-03-2018 Item 11, Presentation
16
30San Luis Obispo Capital Facilities Fee Update
DISCUSSION AND
QUESTIONS
31San Luis Obispo Capital Facilities Fee Update
04-03-2018 Item 11, Presentation
17
32San Luis Obispo Capital Facilities Fee Update
SINGLE FAMILY
PROTOTYPES
(PROJECT SPECIFIC EXAMPLES)
33San Luis Obispo Capital Facilities Fee Update
Single Family Prototype 2
Square Feet: 1,650
Price/Unit: $650,000
10% of Avg.
Sale Price
15% of Avg.
Sale Price
20% of Avg.
Sale Price
(Avila Ranch Example)
Key?
Existing Wastewater cost
includes costs for the Tank
Farm catchment area.
The existing transportation fee
reflects the LOVR Base fee,
MASP Sub‐area fee, MASP
Area Plan Prep fee.
Yellow outline is shown as
visual reminder of other
infrastructure costs outside of
the fee program that new
development is required to
pay. This amount is lower in
the revised maximum
calculations, reflecting that
some of these infrastructure
costs are being incorporated
and formalized in the fee
program as part of this update.
LOVR Interchange cost reflects
the LOVR Sub‐area fee.
Other fee obligations include
school district fees, public art
in‐lieu fee, and the affordable
housing fee where applicable.
These fees are not part of this
current fee update.
Outside of the expansion area,
the “proxy” affordable housing
fee is calculated at 10% of the
building permit valuation,
estimated at 50% of sales price.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 1,675 sq.ft unit.
The existing parks fee is based
on the DA.
04-03-2018 Item 11, Presentation
18
34San Luis Obispo Capital Facilities Fee Update
Single Family Prototype 3
Square Feet: 1,100
Price/Unit: $525,000
10% of Avg.
Sale Price
15% of Avg.
Sale Price
20% of Avg.
Sale Price
(Avila Ranch Example)
Key?
Existing Wastewater cost
includes costs for the Tank
Farm catchment area.
The existing transportation fee
reflects the LOVR Base fee,
MASP Sub‐area fee, MASP
Area Plan Prep fee.
Yellow outline is shown as
visual reminder of other
infrastructure costs outside of
the fee program that new
development is required to
pay. This amount is lower or
equal in the revised maximum
calculations, reflecting that
some of these infrastructure
costs are being incorporated
and formalized in the fee
program as part of this update.
LOVR Interchange cost reflects
the LOVR Sub‐area fee.
Other fee obligations include
school district fees, public art
in‐lieu fee, and the affordable
housing fee where applicable.
These fees are not part of this
current fee update.
Outside of the expansion area,
the “proxy” affordable housing
fee is calculated at 10% of the
building permit valuation,
estimated at 50% of sales price.
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 1,100 sq.ft unit.
The existing parks fee is based
on the DA.
35San Luis Obispo Capital Facilities Fee Update
Multifamily Prototype
Square Feet/ Unit: 1,100
Price/Unit: $500,000
Key
5% of Avg.
Sale Price
10% of Avg.
Sale Price
15% of Avg.
Sale Price
(LOVR Example)
Maximum wastewater and
water fees are based on
Option 1 for Water and
Option 3 for Wastewater
for a 1,100 sq.ft. unit.
The recommended
transportation fee reflects
multifamily fee for the Los
Osos Valley Road Subarea.
LOVR Interchange cost reflects
the LOVR Sub‐area fee.
Other fee obligations include
school district fees, public art
in‐lieu fee, and the affordable
housing fee where applicable.
These fees are not part of this
current fee update.
04-03-2018 Item 11, Presentation
TENewspaper of the Central Coast
luo
1151MM
RECEIVED
MAR 2 8 H18
SLO CITY CLERK
3825 South Higuera • Post Office Box 112 • San Luis Obispo, California 93406-0112 • (805) 781-7800
In The Superior Court of The State of California
In and for the County of San Luis Obispo
AFFIDAVIT OF PUBLICATION
AD # 3572200
CITY OF SAN LUIS OBISPO OFFICE OF CITY CLERK
STATE OF CALIFORNIA
ss.
County of San Luis Obispo
I am a citizen of the United States and a resident of the
County aforesaid; I am over the age of eighteen and not
interested in the above entitled matter; I am now, and at
all times embraced in the publication herein mentioned
was, the principal clerk of the printers and publishers of
THE TRIBUNE, a newspaper of general Circulation,
printed. and published daily at the City of San Luis
Obispo in the above named county and state; that notice
at which the annexed clippings is a true copy, was
published in the above-named newspaper and not in any
supplement thereof — on the following dates to wit;
MARCH 17, 24, 2018, that said newspaper was duly and
regularly ascertained and established a newspaper of
general circulation by Decree entered in the Superior
Court of San Luis Obispo County, State of California, on
June 9, 1952, Case #19139 under the Government Code
of the State of California.
I certify (or declare) under the penalty of perjury that the
foregoing is true
and
correct.
1 a r
6, /,
(Signature of Principal'lerk)
DATED: MARCH 16, 2 )18
AD COST: $459.36
Cirff OF
SOD, LUIS OBISPO
SAN LUIS OBISPO CITY COUNCIL
NOTICE OF PUBLIC HEARING
Trie San Luis Obispo City Council invites all interested persons to
attend a public hearing on Tuesday, April 3, 2018, at 6:00 p.m.
in the City Hall Council Chamber, 990 Palm Street, San Luis
Obispo, California, relative to the following:
CAPITAL FACILITIES FEE PROGRAM I)PDATE/NE%U$
STT LAE 1800) ORDIHA_.NCE INTRODUCTi�N AND WA'rE
AND WASTEWATER OEYELOPMENT IMPACT FEE PROGRAM,
A public hearing to consider the following:
1. Receive a presentation on the final results of the Capital Facili-
ties Fee Program Nexus Study and the Water and Wastewater
Development Fee Program; and
2. Introduce Ordinance to adopt and implement the Capital Facili•
ties Fee Program; and
3. Approve a Resolution to implement the Capital Facilities Fee
Program; and
4. Approve a Resolution to adopt and implement the Water and
Wastewater Development Fee Program; and
5. Receive public input; and
6. Direct staff to return on April 17, 2018 for the second reading
of the Ordinance to adopt and implement the Capital Facilities Fee
Program.
For more information, you are invited to contact Xzandrea Fowler
of the City's Community Development Department at (805) 781-
7274 or by email at g owl Lslq�rl grg_
The City Council may also discuss other hearings or business
I ems before or after Ihe. Items Elated above. If you challenge 1h
proposed proiect In court, you may ba limited to raising only those
Muss you or someone else raised at the public hearing descri-
bed In this notice, or in wr$ten correspondence delivered to the
City Council at, or prior to, the public hearing.
Reports for this meeting will be available for review in the City Cler-
k's Office and online at www.slocity.org on Wednesday, March 28,
2018. Please call the City Clerk's Office at (805) 781-7100 la
more information. The City Council meeting will be televised live
on Charter Cable Channel 20 and live streaming on www.slocity-
_9
Teresa Purrington
Acting City Clerk
City of San Luis Obispo
March 17, 24, 2018 3572200