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HomeMy WebLinkAbout6/15/2005 - STAFF REPORTS (14) U N t + c City Council Staff Report DATE: June 15, 2005 Consent Calendar SUBJECT: Partial Suspension of Sewer Facility Fee FROM: David H. Ready, City Manager BY: City Manager's Office SUMMARY Approval of this Resolution will suspend full collection of the Sewer Facility Fee that is assessed on new construction within the City for one (1) year commencing July 1, 2005 through June 30, 2006. In addition, this Resolution authorizes the City Council to enter into agreements or contracts with other governmental agencies for the purpose of providing sewer services to properties outside or adjacent to the City under such terms as the City Council in its sole discretion determine are fair, reasonable and appropriate. RECOMMENDATION: 1. Approve a Resolution suspending full collection of the Sewer Facility Fee currently assessed on new construction within the City for one (1) year commencing July 1, 2005 through June 30, 2006. STAFF ANALYSIS: The City assesses a Sewer Facility Fee to recover the costs of wastewater infrastructure needed to serve new development, as well as the costs for increasing capacity of existing facilities to serve growth. This fee, which is authorized under California Government Code Section 66013, is collected at the time a building permit is issued. The City's Sewer Facility Fee was last increased on July 1, 1993. On May 17, 2000, the City Council adopted Resolution No. 19795 partially suspending full collection of the Sewer Facility Fee as an incentive to economic development within the community. This suspension, which reduced the Facility Fee by 40%, was continued in 2003 for an additional two (2) years. The current suspension expires on June 30, 2005. In light of the current upswing in development activity and the City Council's previous ITEM NO. 2.K. City Council Staff Report June 15, 2005 -- Page 2 Partial Suspension of Sewer Facility Fee commitment to remove both actual and perceived barriers to economic development within the community, staff believes that it would be prudent to suspend collection of the full Sewer Facility Fee for an additional year. If approved, the proposed Resolution will suspend full collection of the Sewer Facility Fee for an additional year. Staff is only recommending a year suspension due to the pending sale of the Wastewater Treatment Plant to the Desert Water Agency. In addition to suspending the Sewer Facility Fee, the proposed Resolution enables the City Council to enter into agreements or contracts with other governmental agencies for the purpose of providing sewer services to properties outside or adjacent to the City when in the determination of the City Council such services would be in the public's best interest. FISCAL IMPACT: It is difficult to ascertain the actual fiscal impact of this action due to the uncertain nature of development activity within any given year. It should be noted that the Wastewater Treatment Plant has sufficient funds to cover all anticipated capital costs during the suspension period proposed by this Resolution. Oy L. Butzlg s istant City Manager David H. Ready, City I�ng er Attachments: 1. Resolution RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUSPENDING COLLECTION OF 40% OF THE CITY SEWER FACILITY FEE CHARGED FOR CONSTRUCTION WITHIN THE CITY LIMITS, FOR THE PERIOD COMMENCING JULY 1, 2005 TO JUNE 30, 2006 AND AUTHORIZING THE EXECUTION OF AGREEMENTS AND CONTRACTS WITH OTHER GOVERNMENTAL AGENCIES FOR THE PROVISION OF SEWER SERVICES TO PROPERTIES OUTSIDE OR ADJACENT TO THE CITY --------------- WHEREAS, in November of 1974, the City Council approved Resolution No. 11247 establishing a Sewer Facility Fee; and WHEREAS, this fee has been used to recover the costs of wastewater infrastructure needed to serve new development, as well as the costs for increasing capacity of existing facilities to serve growth; and WHEREAS, the City Council has worked hard over the years to remove actual and perceived barriers to economic development of the community; and WHEREAS, the Sewer Facility Fee has been viewed as a optional barrier to economic development; and WHEREAS, on November 5, 2003, the City Council adopted Resolution 20778 partially suspending the Sewer Facility Fee for a period of two years to help stimulate economic growth and development; and WHEREAS, the suspension, which reduced the Sewer Facility Fee by 40%, will expire on June 30, 2005; and WHEREAS, the City is currently experiencing a significant increase in development activity; and WHEREAS, the City Council does not want to hinder economic development and is concerned that if the higher fee is charged it will be viewed as a disincentive to development of the community; and WHEREAS, the City has determined that for the immediate future and for the period specified herein, the lower fee will not adversely affect the City's ability to build additional infrastructure to serve new development or to finance needed sewer plant expansion; and WHEREAS, by suspending instead of amending the fee, the City Council intends to retain the authority to lift the suspension and reestablish the full fee when needed for facility expansion; and WHEREAS, Section 15.24.030 of the City's Municipal Code allows properties outside and adjacent to the City to connect to the City's sewer system at a rate twice that of properties within the City; and WHEREAS, the City Council finds that there is a policy interest to enter into agreements or contracts with other governmental agencies to provide sewer services to properties outside and adjacent to the City if such services are in the public's interests. Resolution No. June 15, 2005 Page Two NOW THEREFORE BE IT RESOLVED: Section 1. For the period commencing July 1, 2005 through June 30, 2006, the City shall suspend collection of the full sewer facility fee charged for construction within the City and shall for such period collect the lesser amount specified below (an approximate 40% reduction rounded to the nearest dollar), but reserves the right to repeal or modify this suspension by Resolution when necessary at the direction of the City Council for purposes of financing sewer facilities construction. Such repeal or modification of this suspension shall not be construed as an imposition of a new or increased fee. The authorized rate and the rate charged following suspension shall be as follows: Authorized Rate Suspended Rate A. Residential Units (single-family, $4014/Unit $2408/Unit apartments, co-op apartments, condominiums and mobile home park spaces). B. Commercial and Industrial Units $388/Fixture Unit $203/Fixture Unit C. Hotel Room Without Kitchens $1744/Unit $1046/Unit With Kitchens $1998/Unit $1198/Unit D. Recreational Vehicle Spaces $3121/Space $1873/Space Section 2. The City Council may, by resolution, authorize or approve agreements or contracts with other governmental agencies for the purpose of providing sewer services to properties outside or adjacent to the City under such terms as the City Council in its sole discretion determines are fair, reasonable, and appropriate or when in the determination of the City Council such services would be in the public's best interest. Such agreement or contract shall state the terms of service, special conditions and limitations, connection costs, and all other conditions of sewer service to be provided. Section 3. The City Council may, as part of the agreements or contracts approved pursuant to Section 2 above, waive all or a portion of the Sewer Connection Fees established by the City Council for properties outside or adjacent to the City if in the determination of the City Council determines the services being provided, through such agreement or contract, constitute a "public purpose" under the laws of the State of California or the Charter of the City of Palm Springs.