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CC 2013-02-12_08.b. Annual Adjustment of Sewer Connection FeesMEMORANDUM TO: CITY COUNCIL FROM: RYAN CORNELL, INTERIM DIRECTOR OF ADMINISTRATIVE SERVICES~ SUBJECT: CONSIDERATION OF ANNUAL ADJUSTMENT OF SEWER CONNECTION FEES BASED ON CHANGES IN THE ENGINEERING NEWS RECORD CONSTRUCTION COST INDEX DATE: FEBRUARY 12, 2013 RECOMMENDATION: It is recommended the City Council adopt the attached Resolution· approving the annual adjustment to the sewer connection fees based on changes in the Engineering News Re.c.ord (ENR) Construction Cost Index (CCI). IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The. adopti0n of the attached Resolution will increase the sewer connection fees charged for new development prdjects in 2013. The revenue generated from 'fhis increase is depender:it on the amount of new development in the community during the coming year. · No or minimal future staff time is projected. BACKGROUND: Ordinance 528 C.S. amended Section 13.1.2.1:90 of the Arroyo Grande Municipal Code to provide that for each connection of a building to a public sewer, a connection fee will be charged and that the amount of the fee shall be set by resolution. Resolution No. 3567 set sewer connection fees and requires that the sewer connection fee be adjusted each year in accordance with the percentage increase based on changes in the. annual average Engineering News Record Construction Cost Index. ANALYSIS OF ISSUES: The calculation shown below provides documentation that a 2.62% increase in the ENR CCI warrants an adjustment in sewer connection fees. Overall Index ENR Annual Average for 2012. ENR Annual Average for 2011 Change Percent Increase 9,308 .9.070 238 238/9,070 = 2.62% Item 8.b. - Page 1 GITY COUNCIL SEWER CONNECTION FEE ADJUSTMENT FEBRUARY 12, 2013 PAGE2 Attached t0 this report is a Resolution to adjust the sewer connection fees and which delineates the .service provided .by the City, the current fee charged for that service, the CCI, and the r:ecommende-d adjusted fee. ALTERNATIVES: The following alternatives are provided for City Council consideration: • Adopt the Resolution adjusting sewer connection fees; • Do not adopt the Resolution and postpone adjustment until July 2013; • Provide direction to staff. ADVANTAGES: By approving the recommended fee adjustments, the City will be able to maximize revenue by recovering the es.tir:nated co~st of providing tbe service. DISADVANTAGES: The only disadvantage identified in relation to this recommendation is an increased cost t0 new development. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The Agenda WC3S posted in front of City Hall on Thursday, February 7, 2013. The Agenda and report were posted on th.e City's website on Friday, February 8, 2013. No public comments were r:ec~ived. Item 8.b. - Page 2 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADJUSTING SEWER CONNECTION FEES BY THE CHANGE IN THE ENGINEERING NEWS RECORD CONSTRUCTION COST INDEX WHEREAS, the, City Counc::il ad0pted Ordinance. 528 C.S. amer:ldihg Section 13.12.190 ofthe Municipal Ce.de regarding sewer connection fees; and WHEREAS,. pursuant to Sectien 13. 12.190 the City Council may by resoluti0n establish the amount of the s . .ewer connection fees, pursuant to the above referenced Ordinance,; and WHEREAS, Resolutio.n 3567 authorizes an annual adjustment in the sewer connection fees based on the changes in the annual average Engineering News Record Construction Cost Index. NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo Grande hereby adopts the sewer connection fees set forth in Exhibit "A" attached hereto and incorporated herein by this reference as though set forth in full. In accordance with Government Code Section 66017,. this Resolution shall take effect sixty (60) days after its adoption. On motion of Council Member , seconded by Council Member _____ , an·d on the following roll call vote., to wit: AYES: NOES·: ABSENTi the foregoing Resolution was passed and adopted this_ day of February, 2013. Item 8.b. - Page 3 .RESOLUTION NO. PAGE2 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TfMOTHY J. CARMEL, CITY ATTORNEY Item 8.b. - Page 4 EXHIBIT A SEWER CONNECTION FEES EFFECTIVE 4/~5/13 For each connection of a building sewer to a public sewer, a c0nnection fee shall be collected by the City before the permit for the connection work is issued. The amount of the fee collected is as follows: Connection Fee 20.09 20.10 2011 .2012 ENR Index 8310 8570 88.02 9070 Residential -per dwelling unit Single Family $ 972 $ 1,002 $ 1,029 $ 1,056 Multifamily (a) 720 743 763 783 Trailer Park/Mobile Home 797 822 844 866 Non-Residential -per water meter size (b) 5/8 inch $ 972 $ 1,002 $ 1,029 $ 1,056 3/4 inch 1,456 1,502 1,543 1,583 1 inch 2,431 2,507 2,575 2,642 1 1/2 inch 4,862 5,014 5,150 5,285 2 inch 7,780 8,023 8,240 8,456 3 inch 14,587 15,043 15,451 15,856 4 inch 24,312 25,073 25,752 26,427 6inch 48,623 .50, 144 51,503 52,852 8 inch 97,246 to0,289 103,007 105,706 10 .inch 145,869 1:50,433 154,51'0 158,558 12inch 213,941 220,635 226,614 232,551 (a) Multifamily includes duplex, triplex, apartments, and condominiums (b) For meter sizes larger than shown, conne.ction fee determined based on the ratio of the maximum safe operating capacity of the meter to that of a 5/8 inch meter. The connection fees shall be increased each year with the annual percentage increase of the annual average ENR Construction Cost Index as established in the Engineering News Record publication. Adjustment Formula: Adjusted Fee= (Current Fee) x (Current Year ENR index) I (Prior Year ENR index) 2013 9308 $ 1,084 804 889 $ 1,084 1,625 2,712 5,423 8,677 16,271 27, 119 54,237 108,475 1,62,712 238,644 Item 8.b. - Page 5 THIS PAGE INTENTIONALLY LEFT BLANK Item 8.b. - Page 6