HomeMy WebLinkAbout05-19-2015 C4 Industrial User FeesCity of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number
FROM: Carrie Mattingly, Utilities Director
Prepared By: Dave Hix, Deputy Director Wastewater Division
Brigitte Elke, Utilities Business Manager
SUBJECT: INDUSTRIAL USER PERMIT FEE
RECOMMENDATION
Adopt a Resolution changing the billing of the industrial user permit fee.
DISCUSSION
Background
In 1982, the City of San Luis Obispo established a federally mandated pretreatment program for
monitoring and control of industrial users discharging waste into the City’s wastewater collection
and treatment systems. The Code of Federal Regulations also required the City to have sufficient
resources (funding and personnel) to carry out the requirements of the program.
In 1991, the City Council approved Resolution 6981 (1991 Series) setting forth the permit fees
for the industrial users and pretreatment program. In its deliberation, the City Council approved
fees that recover the costs directly attributable to the program. The program involves one to
four inspections per year depending on industry class, as follows:
• Significant and Federal categorical industries at four inspections per year.
• Class 1 Industries such as gas stations at two inspections per year.
• Class 2 Industries such as restaurants at one inspection per year.
At the same time, the City Council enacted cost recovery for follow-up inspections for
noncompliance and/or violations and decided to collect the permit fee through utility billing.
Until 2007, the City’s utility bills were sent every other month, dividing the fee into six
incremental payments.
Current Situation
The same industrial user fee categories apply today as adopted in 1991. Roughly 300 industrial
users are inspected each year. In 2007, the City began monthly billing of water and sewer
services, generating twelve utility bills per year. Industrial users who do not have a water and
sewer account are invoiced the permit fee only in twelve monthly increments. Currently, this
applies to 95 industrial users (31% of accounts).
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Industrial User Fees Page 2
Fee Categories and Permit Cost (2014 Fee Schedule)
User Category Number
of Users
Current
Permit Cost
Monthly
Payment
S& F Class 4 $1,611 $134.25
Class 1 127 $ 309 $ 25.75
Class 2 170 $ 166 $ 13.83
The fee is increased annually with the applicable consumer price index with the City’s fee
schedule.
Over the past few years, it has become apparent, that the collection of the fee with the utility bill
is problematic. With twelve annual payments, it is difficult to determine when a customer is
delinquent and in violation of the permit requirements. Cases surfaced where customers have
never paid the fee in totality or at all, yet have been permitted as payment status was not
concluded. Coordination of non-compliance is made difficult in addition to the administrative
burden produced by the monthly billing of the fee. Additionally, the invoicing through utility
billing is problematic in cases such as:
- Accounts set up under a property owner with only one shop needing pre-treatment
inspection such as shopping malls with one restaurant.
- Accounts without water and sewer services.
- Tenant changes mid-term that no longer require inspection.
Recommendation
Staff from Environmental Compliance, Finance and IT, and the Attorney’s Office met to discuss
the issues to find a way to better coordinate permitting efforts and fee payments. Based on these
deliberations, staff recommends invoicing the Industrial User fee at the same time as business
license and fire permits in order to streamline enforcement and collection of the fees. Invoicing
the permit once a year instead of 12 monthly installments will allow for a clear date when the fee
is due, subsequently delinquent, and then when follow-up inspection and enforcement are
warranted. Staff will notify Industrial Users of the recommended change in billing.
To ensure the fees recover the costs identified in the 1991 resolution for providing this
mandatory service, staff will return during the Sewer Fund review with appropriate
recommendations regarding the applicable fees for each industry class to achieve the cost
recovery objective.
CONCURRENCES
The Finance and IT Department has been an integral part of the review of the program and
concurs with the recommendation in this report.
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Industrial User Fees Page 3
FISCAL IMPACT
There is no fiscal impact associated with this change. The change will generate administrative
savings as only one invoice will be produced annually. There might be a slight increase in
penalty and non-compliance fees, as non-payment can be monitored and enforced more readily.
ALTERNATIVES
The Council could decide to leave the program as is and continue the current invoice practices.
This is not recommended as violators are difficult to track and are often times permitted without
paying the appropriate permit fees.
ATTACHMENTS
1. Resolution 6981 (1991 Series)
2. Staff report – May 21, 1991
3. Amended Resolution
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R ______
RESOLUTION NO. _____ (2015 Series)
A RESOLUTION OF THE CITY OF SAN LUIS OBISPO REQUIRING ANNUAL
PREPAYMENT OF INDUSTRIAL USERS PERMIT FEES FOR THE CITY
WASTEWATER COLLECTION AND TREATMENT SYSTEMS
WHEREAS, in 1982, the City established a wastewater pretreatment program compliant
with State and Federal requirements as defined in Part 403 of the Code of Federal Regulations
(CFR); and
WHEREAS, Resolution 6981 (1991 Series) established the permit fees for each class of
industrial users and the collection of said fees; and
WHEREAS, the City previously prorated the permit fees and included the amount in the
bimonthly utility bills; and
WHEREAS, the change in Utility Billing practices to monthly billing has made the
industrial user fee collection costly, administratively cumbersome and the permit process difficult
to enforce; and
WHEREAS, the City Council finds that changing to an annual billing for the industrial
user permit fee would be more efficient and improve the permit process.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo that the annual industrial user permit fees as established by Resolution No. 6981 (1991
Series) shall be due and payable on July 1st of each year and shall be billed on an annual basis.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2015.
____________________________________
Mayor Jan Marx
ATTEST:
____________________________________
ATTACHMENT 3
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Resolution No. _____ (2015 Series) Attachment 3
Page 2
Anthony Mejia
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
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