CC 2019-08-27_08c Adjustment of Sewer Connection Fees
MEMORANDUM
TO: CITY COUNCIL
FROM: SHANNON ESENWEIN, DIRECTOR OF ADMINISTRATIVE SERVICES
SUBJECT: CONSIDERATION OF ADJUSTMENT OF SEWER CONNECTION FEES
BASED ON CHANGES IN THE ENGINEERING NEWS RECORD
CONSTRUCTION COST INDEX
DATE: AUGUST 27, 2019
SUMMARY OF ACTION:
Approval of an adjustment of sewer connection fees.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The adoption of the attached Resolution will adjust the Sewer Connection Fees charged
for new development projects for the remainder of 2019. The revenue generated from this
adjustment is dependent on the amount of new development in the community during the
coming year.
RECOMMENDATION:
It is recommended the City Council adopt a Resolution approving an adjustment to the
City’s Sewer Connection Fees based on changes in the Engineering News Record (ENR)
Construction Cost Index (CCI).
BACKGROUND:
Ordinance 528 C.S. amended Section 13.12.190 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. 4507
set sewer connection fees for 2013 and authorized 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.
Sewer Connection Fees were last updated in 2013. This was due to a 2014
comprehensive fee study, including sewer connection fees, not being completed and
therefore, the annual update to sewer connection fees was postponed.
ANALYSIS OF ISSUES:
Sewer Connection Fees, enacted pursuant to Section 13.12.190 of the City Municipal
Code, is collected to help pay for improvements and future sewer system capacity as
necessary to meet the needs of the City resulting from growth and expansion. Since
Item 8.c. - Page 1
CITY COUNCIL
CONSIDERATION OF ADJUSTMENT OF SEWER CONNECTION FEES BASED ON
CHANGES IN THE ENGINEERING NEWS RECORD CONSTRUCTION COST INDEX
AUGUST 27, 2019
PAGE 2
Sewer Connection Fees have not been adjusted since 2013, it is staff’s recommendation
that the fees be adjusted by the cumulative change in the Engineering News Record
Construction Cost Index between the period of 2013 and 2018 to be consistent with recent
cost recovery policies and to ensure that a portion of the true cost of new sewer
connections are not subsidized by all sewer system users. Once the ENR CCI for 2019
is published, this item will be brought back for further Council consideration.
The calculation shown below provides documentation that a 18.8% increase in the ENR
CCI warrants an adjustment in the City’s Sewer Connection Fees.
The calculation adjusts the fees as follows:
Factor = 1 + Current Index –Base Index for Date of Adoption
Base Index for Date of Adoption
The calculation is as follows:
1.188 = 1 + 11,062 – 9,308
9,308
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
1. Adopt the Resolution;
2. Do not adopt the Resolution and request further information; or
3. Provide direction to staff.
ADVANTAGES:
By approving the recommended fees, the City will be able to recover the estimated cost
of providing services to new development.
DISADVANTAGES:
The only disadvantage identified in relation to this recommendation is an increased cost
to new development.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Item 8.c. - 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 Council adopted Ordinance 528 C.S. amending Section 13.12.190
of the Municipal Code regarding sewer connection fees; and
WHEREAS, pursuant to Section 13.12.190 the City Council may by resolution establish
the amount of the sewer connection fees, pursuant to the above referenced Ordinance;
and
WHEREAS, Resolution 4507 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
_______________, and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this 27th day of August, 2019.
Item 8.c. - Page 3
RESOLUTION NO.
PAGE 2
CAREN RAY RUSSOM, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
JAMES A BERMAN, CITY MANAGER
APPROVED AS TO FORM:
HEATHER WHITHAM, CITY ATTORNEY
Item 8.c. - Page 4
2010 2011 2012 2013-2019 11/1/2019
ENR Index 8570 8802 9070 9308 11062
Residential - per dwelling unit
Single Family 1,002$ 1,029$ 1,056$ 1,084$ 1,288$
Multifamily (a)743 763 783 804 955$
Trailer Park/Mobile Home 822 844 866 889 1,056$
Non-Residential - per water meter size (b)
5/8 inch 1,002$ 1,029$ 1,056$ 1,084$ 1,288$
3/4 inch 1,502 1,543 1,583 1,625 1,931$
1 inch 2,507 2,575 2,642 2,712 3,223$
1 1/2 inch 5,014 5,150 5,285 5,423 6,445$
2 inch 8,023 8,240 8,456 8,677 10,312$
3 inch 15,043 15,451 15,856 16,271 19,337$
4 inch 25,073 25,752 26,427 27,119 32,228$
6 inch 50,144 51,503 52,852 54,237 64,455$
8 inch 100,289 103,007 105,706 108,475 128,912$
10 inch 150,433 154,510 158,558 162,712 193,367$
12 inch 220,635 226,614 232,551 238,644 283,605$
(a) Multifamily includes duplex, triplex, apartments, and condominiums
Adjustment Formula:
Adjusted Fee = (Current Fee) x (Current Year ENR index) / (Prior Year ENR index)
Adjusted Fee = (Current Fee) x (11,062) / (9,308)
EXHIBIT A
EFFECTIVE 11/1/19
(b) For meter sizes larger than shown, connection 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
For each connection of a building sewer to a public sewer, a connection 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
SEWER CONNECTION FEES
Item 8.c. - Page 5
THIS PAGE INTENTIONALLY LEFT BLANK
Item 8.c. - Page 6