the water resources manager of the city of santa barbara and today we'll be going through the water and waste water capacity charges proposed but actually for the next five years the last time these were updated was in two thousand and thirteen and a presentation was so quickly we'll look at the presentation outline we'll go over to the capacity charges description so we're all on the same page what we're talking about look quickly at the background then we'll go into the consultant study looking at the methodology calculation of charges and the recommended policy changes quickly look at the schedule of adoption we'll talk about what would happen when they're implemented how quickly those fees would go into effect so capacity charges are one time charges for new or expanded water and wastewater connections and ultimately what's going on is our existing customers over time had funded the infrastructure of the system and what allows new and expanded connections to connect to the system is these investments in the capital infrastructure it also kind of brings them onto equal footing so going forward it's equitable that we charge all customers the same monthly rates for their fixed and volumetric charges they're typically paid just before we install them the meters and issue them and that's just so we know exactly what's going in the ground and they're paying only for what's going in the ground previously in the municipal code and by staff we've referred to these as buy in or capacity fees we've started discussing them as capacity charges it aligns our terminology with the state government code but you may hear a slip in between these terms i just want to let you know we're talking about exactly the same things as mister hart hag mark had noted we last updated capacity and thirteen for the two thousand and seventeen study we contract with bartow wells associates it's the same firm that did the water rate study this year as well and their scope consisted of three main points which was review the current methodology evaluate alternative methods and of course develop proposed capacity charges and any policy recommendations capacity charges aren't subject to prop two hundred and eighteen but they do have other requirements one of which is that we have to make the consultant study available at least ten days prior to adoption so we have planned right now to go to city council the full council on october rd and we'd have to have it available ten days before that we made it available to the public in the city clerk's office and online on september  for both the water fund and the wastewater fund capacity charges make up about one percent of the revenues in the budget for fy eighteen so it's not a large large part of our revenues but it is an important aspect to get the equity right and make sure it's fair for everyone connecting to the system so i'll turn to the consultants study looking at the methodology there's two main approaches that are consultants analyzed one is an incremental cost approach and the other is an equity buying approach incremental cost is typically more appropriate when you're expanding the system to provide that new capacity for new customers or you're experiencing significant growth the equity buying approach is more appropriate for built out communities like ours as such the consultant recommended that we continue with the equity buying approach it's what we have historically used and what we'll continue to use according to the study and in this new customers pay a fee that's proportional to their share of system capacity now to get to that fee the fee calculation has three main elements one of which is you have to estimate the value of your system assets then you have to estimate system capacity and third a simple calculation dividing those two you get one dollar per unit of  one thing we also wanted to do similar to our water rate study is set out a schedule fees so the community has some expectation about what's to come now each year as i explained we're investing in the system in our capital program and that will increase the value of assets and the capacity charge so to estimate those increases we escalated the charges that we are de stablishing for fiscal year eighteen by three percent each year for a five year schedule and it's based on this engineering news record construction cost index it's also the index we use to value the assets in the study so they found it reasonable to continue using that as an escalating factor one change this year that we asked the consultants to look at is the city has shared capital assets that were bound by agreements participating in the state water project and the consumer project that have not previously been included  however like our city assets the existing customers have paid into those assets as well and our consultant found it reasonable and consistent with government code to include them in the calculation this year so you see those in asset tables in the study and as i had said it's consistent with the language that's that says supplier capacity contracts for rights are entitlements in the government code until we've included them in the fee now looking at the total net value of assets in each system water system has approximately two hundred and sixty million indirect city owned assets and an additional two hundred million in shared capital assets for a total of four hundred and sixty million for the waste water system we have approximately one hundred and fifty million indirect city owned assets second part of the calculation for capacity charges estimating our system capacity and what what we've done in the past and what we're recommended to continue to do is express our system capacity in terms of metered capacity and we convert those all up and we have a number for our meter capacity in the system dollars and as i had mentioned all the larger meter sizes are increased based on their flow factor ratio and in addition you'll see in the fee resolution that's been provided to you that  charges are then escalated by three percent for the out years here's a table of the proposed waste water capacity charges what you'll notice here is there's two sections to the table one is what we would be charging single family dwelling units and there's a proposed change here based on the water commission recommendation i'll get into that in the next slide and then there's the non residential portion based on meter sizes you'll see that the single family dwelling unit is the same as the inch meter what is being proposed is a decrease of approximately one thousand five hundred dollars so going from four thousand nine hundred and seventy seven to three thousand four hundred and fifty two i'd like to be clear it's it's not that we're not investing in the wastewater system and the capital infrastructure it's that some of our recent projects and our large projects have been funded by srf loans and the principal on those loans is excluded from the calculation so going forward our customers will be paying this principle down in their monthly bills but it's not included in the calculation so this is decreased in the next five years what you'd expect in our next comprehensive capacity charge study is for that to raise up as those loans are paid down now what we had originally proposed in the fee resolution is that we cap the waste water capacity charge for single family and multi family dwelling units at the inch fee and we did that because typically meter size is larger than five eighths inch go towards serving outdoor irrigation or fire flow requirements which don't contribute to our wastewater flows we find that typically to be true is that if you're going from a inch meter to a inch meter many times that's irrigation outdoor which doesn't contribute to the waste water however we had built that in as an assumption to the to the model and the fee resolution and the water commission they felt more comfortable if that was a determination made each time by staff so instead of assuming that we will talk with the customers and if they are up sizing their water meter for just indoor use indoor capacity then we would be charging the so in your fee resolution what you'll notice is there's an amendment from what was posted online there is a language added to effect this fee effect this policy excuse me another change recommended by our consultant is with multi family dwelling units the smallest meter offered by the city is a inch meter and that's fairly well match for our single family residences however if we offered a smaller meter there may be some multi family dwelling units and developments that would take us up on that so we're recommending a policy to prorate capacity charges based on water supply fixture units for multi family dwelling units and if i could we're recommending a policy that prorates the capacity charges based on fixture units inside of these multi family dwelling units correct if i can if i can just get into this next point may help the fixture units is actually weighted based on their max flow so for instance a clothes washer is rated at for fixture units or a kitchen sink at one point five fixture units you would add those up in addition the last recommended policy change from the consultant is we brought up the idea that our standard fees for the large majority of projects are appropriately applied but there may be instances ones that we can't foresee or rare and infrequent instances with projects that don't fit within those guidelines and these applicants may assert that they want to see a different determination made for their capacity charges something outside of our standards what we're recommend is adding an appeal process to deal with these situations so they'd be able to appeal to the public works director for an alternative method and we would be able to provide that if we found it sufficient the city won't dictate exactly what they'll provide to us they'll make their case by providing supporting information and analysis for consideration so we can't address individually every unique project or development but we think this gives us enough latitude to work with different accessory dwelling units you may be familiar but state law is passed in september two thousand and sixteen regulate how we can charge capacity fees for eighty use now the capacity charge must be based on either size for an adu or the number of plumbing fixtures we're recommending waiving separate metering acquirement freight use that will not be taking place in this v resolution that will be an amendment to the municipal code in title fourteen for water however by determining a dollar  staff is recommending one policy changes well that we waive the capacity charge for installation of inch meters irrigation meters to serve existing landscaping when you install an irrigation meter you get a water budget based on the size and type of landscaping which encourages efficient water use however we will make them demonstrate that two years of irrigation watering has been taking place while to make make them subject to site inspection by city staff to go to ground truth what they upon adoption by city council the new fees and policies would it be effective immediately but we do recognize that certain projects have have hit certain milestones and have based their projects on the old fees and policies potentially so we all we will allow  projects achieving certain milestones to pay previously adopted fees and also be subject to previously adopted policies so i know that was a lot but i'd like to to summarize the key policy recommendations continue using the equity by an approach which values the system of assets and determining our system capacity based on meter sizes charge multifamily units  resolution in front of you but those are the significant changes that we're proposing or continuing with and they've been affected in that resolution as i had said on september th we made the consultant study available to the public we went to water commission last week on september september st we made the one change based on wastewater capacity charges that we would no longer just be capping them outright if someone has a large meter size to serve indoor uses they shouldn't be paying the same amount as a very small home for waste water capacity charges today we're here at finance committee and we have a tentative meeting scheduled with city council on october rd and finally the recommendation today is that the finance committee recommend that council adopt a resolution rescinding the current capacity fees and adopting certain new water and waste water capacity charges thank you mister hamilton for the very comprehensive  presentation are there any questions of staff at this  point i'm surprised they that's such a significant drop in the wastewater fees just as we don't we were not accustomed to seeing anything go down and in this world so that was quite a quite a surprise was there and i'm wondering if the previous i mean we went through quite an analysis so that was at the in thirteen when we had that the previous group was there  then that was out size and then we're kind of moving back mister chair committee member white at the time my understanding is there we're not correcting for a bump in tw thirteen the large factor here is that there are srf loans that subtract from the asset value but secondly what i've been told by the consultant is they they may have used a different calculation methodology which is more conservative this time around which ultimately means that the fee is is lower as well so there's two parts there but the majority being outstanding loan okay thank you for that then mister chair i have questions around the the values but i can wait until after we committee member dominguez let me give you an example that may help with the desal project is that we have loan drawers right now but we have not begun paying the principal it will occur one year after the project is complete and that principal debt will be paid in full by future customers in future bill monthly bill amounts so as they pay their monthly bills we pay down the principal on debt and we would not be charging people now for things they'll be paying in the future i think that's one thing you want to avoid is double charging in those instances come some we're doing is i mean chime in on a waste water example the secondary ation project which is a thirty million dollar project and so you had an asset on the books then when we started construction that asset basically fell to zero because we're reconstruction it we're going through a major renovation but we're doing it on a loan and so the value of that asset is pretty much zero and then as we start to pay the principal that the add value of that asset will then begin to grow and so that's kind of why some of the we've been doing a lot of work down at ellis tarot and you've had a lot of those assets that have fallen to zero but we financed them over the next twenty years and so as we begin to pay principal that will then begin to start to show up in the valued assets that anybody buying into the system would have to come in and pay understand it's not declared an asset when it's built it is not because we haven't paid it off we basically built it on cash that's borrowed so we don't in essence don't own we don't own the the asset until we paid it off and so we'll start to pay principal on it and as we start to diminish that the asset will start to grow in value it's assumed that what we borrowed is what the asset is worth so wouldn't you just be booking it into the asset column for twenty million or whatever the unit costs and then putting an equal number in the liability column for your finance payments it's basically what happens and so as we start to pay on it the asset will start to actually have a value so to understand why we're not booking it as an asset now because we've built it it belongs to the city we're paying for it so you would want to but it's offset by the lawn right which decreases that value asset value then okay yeah so there is an asset but there's an almost equal liability  forever the financing was correct okay and that gets into our calculation estimated value of assets in the fee calculation mm hm and so you are using the full value in this estimated value of assets or the or what you really mean when you say estimated value of assets that's assets minus debt that's correct though the calculation there is assets less the debt on those assets less depreciation included as well and then brought into current dollars you know to study and the the less depreciation is usually built in because we record an depreciation so if it's a ten year asset every year we're taking approximately a tenth away or whatever formula they're using so you wouldn't necessarily have to take out depreciation unless for whatever reason they hadn't been but usually in the budget we're booking depreciation annually that's correct so in the asset table there's varying useful lives for our assets and like you had said if it's a ten year project you would book one tenth of that each year in depreciation so with these with these loans then you had said maybe they're using a more conservative formula now but it seems like if they were using a more conservative formula then the fees would actually be a little bit higher not lower my understanding from the previous study is that they had lumped some elements of the calculation together and ultimately that that lowered the metered capacity so the heirs isn't about the asset valuation i think they have a very similar asset valuation from two thousand and thirteen to the two thousand and seventeen study however how they measured metered capacity that's my understanding is where the change took place so the lower the system capacity the higher the fees would be if everything else is equal that's right okay so wouldn't lowering system capacity isn't that what you're saying would that increase the fees and yet we're seeing a pretty substantial drop which what i'm saying is that it was lower in two thousand and thirteen to seventeen by conservative meaning they're taking a higher system capacity number okay just like the number in two thousand and thirteen is lower than than it is today we have more wastewater capacity today and is that because of the new  structures we've built the new secondary units well there is a certain amount of growth built into the model for the system so over the course of five years you would see a little bit of growth in the system capacity for the wastewater and water systems which if you didn't have asset value growing at the same rate that it would lower so when we see it drop from five grand to three thousand five hundred that's about a thirty percent drop so did our capacity increased thirty percent i don't have that information available on me but i can get that to you because it would only increase if we're building putting in bigger pipes in risk to replace smaller pipes or the end of the system there's more capacity even with the same amount of pipe so the system faster did not increase by thirty percent okay that would have seemed odd hopefully we're not creating fifty percent more wastewater so is it so then which one of these figures is what's accounting for this thirty percent drop is it the asset value dropped is intensive capacity or it's a combination of things okay mm hmm maybe if we can see that penciled out or demonstrated a little more when you when you bring it to council that would be my my recommendation the  construction cost index so the annual increases of three percent that's up to three percent that's correct we would see that as a maximum increase if for some reason there was a significant deviation down construction cost index was zero for instance and consistently that way i think we would get back with the consultants and look at potentially not doing the increase but we see that as a cap the three percent we will not be adjusting upwards so if that's what if it's a negative three percent construction cost index i think that would be a trigger for us to come back with the consultants and look at if we should put that on hold or in fact look at those zero percent the floor percent way our policies written no i think we would say that three percent is the max right so what that's the top limit what's the bottom limit i think that's something we would have to look at for instance if you saw a significant decline in the construction cost index it's probably indicative of a larger issue in the economic surroundings and we would certainly like with the water rates and go to the consultant and discuss potentially adjusting the capacity charges but what's written into the agreement let's say we never take that step what would we do we would increase annually by three percent after fy eighteen even if cci is zero or negative that's correct and where is that written into the into the resolution what's the actual language i could turn to for more guidance as it stands now in the fee resolution what you'll see is just a table of charges a schedule of charges for five years the supporting information about the construction cost  induction the engineering news record is in the consultant study so where does this talk about the the annual increases of three percent in the few resolutions it doesn't actually specifically address them they are increased by three percent and then put into a schedule for five years so for instance if you look at the wastewater or charges table page four it shows what what the fixture unit charge would be scaled over time so the column that that says effective july one two thousand and nineteen and looking at that first fee of three thousand six hundred and sixty two dollars it's approximately three percent above three thousand five hundred and fifty five dollars i'm sorry what numbers are you percent increases column to column that's correct okay so it actually doesn't matter what the cci changes we're just doing three percent that's right in order to five years scheduled ahead of time if for instance we did not do it ahead of time we'd be back each year we make that more clear because like if most people assume cpi like your salary is going to go up or your pension goes up based on that year's cpi not historical so that's what the roomie off i thought you were saying it's going to vary every year and i was trying to find that but it's really at three what you're basing three percent on the past picture that's correct okay it was it was consistent enough because we actually had talked about changing it every year and trying to keep up with that but looking back had been fairly consistent and didn't see that we really needed to be bouncing it around we could be further consistent of thoughts and again this will come to council every year with the budget and should it be something unusual in the budget that certainly would be the maximum that we'd be looking at what could always be something different discussion so where something went to the commission and it changed so at this point we're only the original proposal was to cap wastewater for residential units but that's now scrapped we're not capping adding the caveat that staff is going to look to make sure that if they do need a meter larger than five eighths it is not being driven by indoor water usage because if it is an indoor water usage then they should be paying the capacity fees for that which was a good comment but it is an outlier most the time people are getting a larger marina than five eighths it's because of landscaping needs which is not going to the sewer system so what's being cap now right now lost me in your discussion of what was originally going to commission of what came out of commission and what's being kept so what went to commission is there would be i have a clear slide this is what went to commission was that there would be a cap on buy in fees for wastewater at a meter for a residential residential meter and the commission said well what about those odd cases someone's putting in a big house and they need a three quarter inch meter because they have four bedroom or four bathrooms or whatever it is and seventy fixtures right some i and i'm like well that that's a good point and to that point the capacity fees should apply if it's for indoor water usage and so that's the nuance change so where is that then on this chart on page twelve or is it not reflected page twelve i'm sorry  i think it would have been more clear if we said that on slide twelve that was the original proposal is that correct that's correct so this is the original proposal this is not what's implemented by this resolution that's not what's implemented by the resolution is for instance of looking at this table a single family dwelling single family residence once a three quarter inch meter and that will be primarily to serve into our water uses lots of fixtures many bathrooms they in this chart here would be paying five thousand one hundred and seventy eight dollars in fy eighteen previously it would have been capped at the three thousand four hundred and fifty two dollars in fy eight put the flow factor ratio in there to show that it has the same fee as the inch meter down below in the non residential schedule okay irrigation then they can then it is capped and they would only pay thirty four fifty two that's correct so if it's new construction you mentioned there was like a two year they have to show a two year history of irrigation where were the criteria and that's that's not for new construction that be for existing landscaping okay so how do you deal with new construction if someone comes in and wants to claim the smaller fee what's the test you use i'm clear so they've they've constructed a single family residence and two years later they come in and and claim they have existing landscaping no they come in just from day one and say we want a three quarter meter and it's all going to be used for fixtures inside the house the to use the smaller we want to have the smaller fee i'm not sure i'm exactly clear on what you're asking so you'd like i'm building a new home new construction i'm going to use a meter because i you know for whatever reason and they claim they should have to pay thirty four fifty two because they're not because they're doing irrigation how do you test that what's your your policy i think it without the demonstrated two years d fixtures that would be the number one test that's correct ok the next question i have is regarding a you d s staff is recommending waiving separate metering requirements for a to use can you talk a little bit more about that please cannot do with ad use right now there's if you don't mind let's use the real term instead of the acronyms because i think this is very confusing to people sure so close and by eight years i mean accessory dwelling units so the state did pass some legislation regarding accessory units and we are very restricted on what we can and cannot require for those accessory dwelling units so right now under the state legislation we cannot require a separate water meter for those units if they're within the existing space of an existing structure so we technically can require a separate water meter if the unit is proposed not with an existing space the problem is there are a lot a lot of projects coming through where they're barely not within existing space and so the water meter can sometimes be seen as creating a burden on those projects and the state is very sensitive to us creating burdens on these kinds of projects so we are currently proposing in this one to water commission  that we waive separate city water metering requirements for these accessory dwelling units under certain circumstances they would be required to have a private sub meter to measure the water usage of the accessory unit and that is per another state law that was passed recently as well so are we requiring the sub meter that is what we're proposing we introduced that to water commission and its will make its way through with the rest of the and how and i'm sorry i'd have to i'd want to accelerate that discussion because how that turns out would influence my decision on this so do these sub meters for all intents and purposes do the same function is there any reason we would want to require separate meters versus a separate sub meter so sb seven which is the regulation that requires sub metering is basically forcing we already have it on the books at all dwelling units must have a meter but given the challenges with the state pushing accessory dwelling units and trying to streamline that we're kind of limited on and and we strongly feel that you know if we're adding a small bedroom does it really a small unit two hundred square feet does that really need a meter that's it's not really the intent there especially if the owners on site but given that the state then has sb seven that says you must in cases where it's new space do this so if someone is converting their garage that's considered existing at this point but if they are adding a unit in their back yard and building it new that will require a meter per sb the state regulation on that and so they have the alternative of connecting and getting a city meter or a private sub meter in which it's up to the owner to read it and talk with their tenant about it maybe their grandmother or their son so there may not be anything there but that is a requirement under sb seven so it's kind of out of our jurisdiction on that one so that's a minimal requirement can they meet that requirement with a separate meter yes and that were making it if they want to come in and get a city meter we'd be happy to accommodate him with that as well so we would actually simplify it for people if we required a separate meter in some ways yeah and it would be based say for example someone is doing a very small little one one room with a little bar sink and a simple bathroom they may have ten fixture units total for that ho there's no washer and dryer there's none of that stuff in there well then that would basically they'd have they came and wanted to get a meter that they're buying when you based on the ten fixture units so i'd be a reasonable buy in or capacity fee for that connect did you have something to add to this conversation thank you chairman just one point on this and that is just before we go too far astray and that is that the accessory dwelling unit topic in terms of zoning is not on this agenda today this only pertains to the the capacity charge topic and with regard to the accessory dwelling unit issue with regard to capacity charges all this resolution proposes that is that pertaining to accessory dwelling units if an accessory dwelling unit is proposing a a meter that's separate and dedicated separate and dedicated meter then they would be paying a capacity charge so that's the only intersection between the the two that pertain to what's on this agenda and that pertain to accessory dwelling units so i just wanted to clarify that for pur poses of our discussion today thank you great thank you so what would the before the staff recommended waiving the metering requirement was there discussion of what the fee would be so when is it applicable only with new structures okay and that's currently again that's what's proposed that's the that's this discussion sara was talking about that's moving it forward separately this here it's kind of  the intersect of trying to address multiple things at least leaves the door open should we decide that that's how we want to proceed and we want to charge some type of capacity fee for these smaller units these allows us to do it based on with state regulations so someone comes in they have a singer single family dwelling there's brand new construction in the back in other words it's just dirt there's no existing garage or facility they're gonna build a brand adu and they want a half inch meter so what are we gonna charge them for a fee they would pay the full under this i don't know if it would fall under this or i'm just giving you the the hypothetical facts and asking you how they would be addressed by the department that's a so under the proposed so i'm trying to get under the proposed language here any want to speak to that i believe if they wanted a meter larger than five eighths inch they would have to pay the full charge for that larger meter it's a little bit complicated because at this point in time we are still requiring separate water meters for certain ad use in the case that it's new right if it's new and it was larger than five a so i would say they would have to pay the ful for based on the if it's larger than five ace they would pay the full fee of that meter wouldn't it be wouldn't it be capped because it's uh being used for the fixtures not or no because there's no irrigation extra irrigation use so it would follow the size okay so again maybe that's something that when when you bring it to council you make it clear with a chart if it's if it's a new ad you construction a new accessory dwelling unit construction and they want a separate meter they would have to pay these capacity charges but then also make it clear that you're not requiring a separate meter just so that that fact is clear the challenge with this is this just  s a fee should the council support that proposed changes which is moving its way through separately related to metering of a to use right so this by itself doesn't really have any bearing and unless the council supports i mean you go do a bunch of different ways depending on how the planning commission and council my only goal is to have full transparency in the most information available to people making decisions so if you could if you mean obviously the most important thing is describe what you're doing but then also put in a word or two and what you're not doing what you're not taxing putting fees on so it's just unclear from this presentation what all the contours are so i'm just trying to draw those contours clearly so that the public knows because it's complicated this is complicated stuff and we want them to be able to quickly and easily understand it so and that is that the intent here is to establish depending on which way planning commission and council go a fee if they choose to go that way there will be a structure in which they will understand clearly how much they need to pay well i want i want it to be clear before council makes that decision  commission and i think it might be going to council on them back to planning commission and i think it's timeline is probably somewhere in march before there's going to be a determination this for its what it is is establishing should something come out of that because right now we are not charging there would be a basis based on fixture units in which now depending on where it lands a homeowner will know clearly how much they need to pay based on the number of units they have but the discussion of whether make you understand that if you need to bring us decisions to be made earlier on in the process so that you guys can move things forward please do i know the ad use you know they were passed at this point about a year ago and we're still waiting to have the city respond and oh pasadena was was out of the out of the box in like february or march so we're really slow relative to other cities and it's too bad because this discussion would have been a lot clearer if we'd already dealt with with ad use in the community development department so i know that's not your guys's department but that's why i've left now having to clean up the mess of trying to get everyone on the same page in terms of how the city is regulating it and when and how people put in water meters is hugely important for the community that's that's involved in ad use so i just want to make sure all this has out in the open and clear everyone so we're not over taxing or under taxing we're doing exactly what is appropriate and so until we have a discussion about who needs meters who doesn't need meters you know it's going to be hard for people to to truly understand but i think you guys have done a good job answering my questions today so i just want to make sure that that information gets into the agenda for the full council because one there's going to be four more of us listening to that but then the public is generally more tuned in and so this would answer their questions if they're watching or reading the agenda without them necessarily having to listen to the discussions or questions or for me to have to ask the same questions again at council so i think that was it for my questions all right i have a different question on a different subject the consultant recommends that there be an appeal process to the public works director to calculate an alternative method seems to me there ought to be an appeal from the staff level to the water commission and then potentially to the council in case there's a disagreement about that is that something that you've thought about and considered  have and certainly that is could be a change that is made we kind of feel like with some of these things we can probably best resolve them simply but if we want to create an administrative process where it does thank you chairman hart just my comments on that is that according to the city charter if we wanted to create a more full appeal process which is not a bad idea i think for the administrative record we would probably to have an appeal of the public works director decision first go to the water commission so that they could then hear the appeal but only in an advisory capacity to the full city council so it would go intermediately to the water commission for recommendation to the city council so that would be what i would suggest if we wanted to do more full beyond the the public works director if your body decided you wanted to maybe see that we would then write that into the resolution thank you for that additional information that's helpful any other questions for staff this point will open up question while you were talking the on sli nineteen new fees and policies effective immediately upon adoption of resolution and then projects achieving certain milestones may pay previously adopted fees what are the milestones that you're envisioning or are they in the resolution milestones are not in the resolution you know member dominguez and i i do have a back outside if you just give me a second to move to it and i can show you again like many things at the front counter miss hoffenberg is works with that directly but let me show you i can move through these hopefully you remember dominguez up here are the development milestones as they've been developed previously so there there are a lot of ways here that they can meet these milestones and be eligible for the previous fees previously adopted fees and policies and and in addition if if an applicant felt that they didn't fall within these milestones but had a case they would be able to follow through with our appeal process as well assuming this resolution goes forward thank you very much all right at this point i'll open up the public hearing is there anyone who'd like to speak to i've had an ongoing relationship with the water department that hasn't been very successful and that is that i represent the sandman in which has been torn down and they are replacing it with residential multi multi tenant residential condominiums and back in two thousand and thirteen late two thousand and thirteen i went wrote a letter to the council or a letter to the public works director explaining that we had a water use that was twice the amount that would be required with the subsequently built multi tenant facility and i realized that that was rejected because i didn't call it a capacity fee i was trying to deal with how much water we were using and i still struggle with calling it a capacity fee when this is specifically in the study and in the description of what we're doing were saying we are a built out city and therefore why are we charging capacity fees we should be fees but because we're buying into the system that already exists we're not trying to build more capacity but i haven't maybe i got to get jason to explain that to me with all of his questions but i have been unsuccessful in getting this situation resolved and and now the project is being built and in order to build it we had to buy the water meters and therefore i've got a problem coming under the appeal procedure under this ordinance and i thought that in discussion with staff we maybe would make reach that point where there would be an appropriate credit according to this the charges reimburse existing customers for the investment they have made in the assets of the respective systems through the payment of monthly water bills and a capacity charge so here's the sandman been paying water fees since one thousand nine hundred and fifty and did he get any real credit no it said okay this is what it would cost to get your one and a half inch meter and we're one inch meter and we'll give you that back as a credit and i think the fair way to do this is that we look at fixture units that are in the hotel we look at fixture units which are in the multi tenant facility and if it's fifty percent we get a fifty percent credit i don't i know i'm not going to get anywhere with the water department so i've got to go to council and go to you to get this implemented so that in fairness the sandman  the subsequent multi tenant facility is treated fairly under this ordinance under the ordinances the existing one doesn't have an appeal procedure  it just sort of it says you may you may use a different system and i tried to propose a different system and it got rejected and no he gave me any response the the description of i mean the sandman's units fixture units is let's say one hundred then if that isn't the exact number but one hundred and the new project is fixture units will be two hundred so we would get a credit of fifty percent of that conversion and that to me is the fair way to do it but my guy has already spent seven hundred and eighty thousand dollars in buy in fees for both sewer and and water so and i think both of those should be credited and we should be able to get a refund and i'm asking you to give me some relief and help me have this injustice which i consider an injustice remedied because i've been at this for as i say since nineteen two thousand and thirteen trying to get somebody to listen this this when it starts focusing on fixture units kind of created an explanation a way we can approach it so i'd like you to take that into consideration i will bring it up at the city council meeting but i was hoping we could do something here at the finance committee  we're not talking about the actual project today we're talking about the concept of an appeal that can come to council that's what your that's the that's the point of this discussion right now well not that not the actual nuts and bolts of your one hundred you right now i can't use this appeal procedure i understand so i want it to be such that it can get to council it can get well it can get to the public works director me back up a little bit so we met was mister fell on tuesday last week and he has laid out a new approach that we haven't looked at before and so staff is looking through that we didn't have an answer for him today whether this is a workable option and we're continuing to kind of to go through this and so i don't believe we've rejected his approach yet and i think we could if honestly i think we're still working through what what there is here now again this is this process is moving forward to adopt capacity fees we're looking to see how the adopted capacity fees can work with us but i don't think it's i don't think we've exhausted the process that we've kind of established here yet and i don't know i don't know if i can really answer any more than that i mean i could get into the details of his specific situation we're asking about whether adopting this fee resolution and proposing this appeals process is going to is is mister fellows project going to be eligible for that process that's the question at this time we feel it is eligible for our appeals process because he has not the meters have not been installed okay so we feel  long as we get this process started before he actually starts installing meters we believe that in this sense he's you know for example just a weird example if he was gone banker we would return his money to him for his capacity fees that he's paid so at this time we feel that there's determined when you've received your sheet of fees we've we've since revised that in recognition of certain projects that it's prior to installation which gives the applicants more time to work on an alternative determination and make the appeal okay so it sounds as though it sounds as though mister fel was looking for is a path to make this case to you as he has already and continued to have that conversation that that works under this fee resolution that's correct and potentially if we're going to modify it to include an appeal to the water commission and for a recommendation to council that works as well and would apply in his instance yes so if that's what the finance committee wants us to do is bring that back to council though we could do that a specific concern i've got is the following language the applicant shall within thirty days of receiving a final written capacity charge determination which i would have to say we've had that because they said give us this amount of money in order to get your your meters in order to get a building permit to be able to build we haven't gotten any completed units there aren't any installed fixtures and in fact we still are using the old meters to deal with water you know dust and things like that so i think that would shut me down right now unless that was change and that's in the new ordinance mister hamilton yes mister chair that that's correct we we've been moving quickly on this and trying to trying to be as open as possible and we have made that change so that specific line that's being referred to there the official charge determination has been removed it's been replaced with language that says previous to installation of meters okay well that's i think that's what the intention is  and and for the record that's the new section is j that has this new language so my question is is kind of a generic one but kind of following the lines of that fact pattern if you have a new development that is using far fewer or more fixtures do they get any kind of credit and really what i want to get to is you're charging a fee based on a cost that the city has incurred is incurring or w incur so if you were to like use that number they're building two hundred fixtures and they used to have a hundred so part of the reason the fees assessed is because of the charges will incur or how what is the basis under the consultant recommendation for charging a fee the basis is there was capacity built in the system as we whether we replaced water mains or built reservoirs such that we would have capacity for projects so when a project such as salmon comes along we don't have to now go in enlarge our water mains and enlarge the city reservoirs because of this project we have built in adequate capacity and it's really an equity issue it's really for that project to reimburse the other ratepayers for the costs that we're spent to to upsize or to properly sized those facilities to handle modest increases from capacity in the future and so that is what we're talking about here and when we talk about capacity one of the things that often gets left out of discussion it's really that peaking capacity almost likely if you do with electrical charges it's the ability for everyone at that peak time of the day say seven zero a m and ones getting up to take showers everybody wants water at that one time the city has to be in a position adequate size reservoirs and piping to be able to provide that demand and what we found is even with our with our different customers you have different peaking our because we have most of our demand is in residential our peaking is  relatively driven around residential commercial peaking is it really doesn't play in because it comes in in the middle of the day later on and so really a lot of our reservoirs and pipelines are all designed around this peaking residential demand that occurs and so that is why it's difficult to compare a commercial facility a hotel to a residential facility and be able to draw parallels just because there's a hundred room hotel how does that compare to seventy two single family residential homes basically we're talking about here that are one thousand five hundred square feet have two to three bathrooms in them how do that compare as far as demands because those homes are more likely to demand water at seven zero a m where that hotel is doing laundry throughout the day and it has a totally different demand pattern and so that's kind of the the challenge with making this comparison across different customer classes great thank you customer white thank you and that's carson that's that's another that's a topic for a lengthy discussion about peak hour trips on traffic and all the different kinds and we are the metering is headed in the direction of being able to time water use such that we can start to charge even on that basis to say nothing of monitoring more so there's some stuff like that is coming i uh nine the net value of assets is is it something that concerns me those numbers seem extremely low i know there's i mean it's like our hundred year old reservoir up at gibraltar as an example that's probably a billion dollar reservoir and cachuma the shared our shared asset is we're two charge yesterday i got joshua's attention there because of a great big a couple of great big elves that are getting replaced and that the bureau of reclamation is saying we're replacing them and just get over it and yeah we're charging you late but i just so these low values concern me from that perspective particularly i mean the system and i expect that it's everywhere are so depreciated and their and their values are sort of stated are so low and yet the costs of maintaining them are going to be very high so i'd just that slide tells a different story then and particularly for us that are just looking at the one slide and moving on we think well we've got you know it's a lot of money four hundred and sixty million dollars or whatever and no it's the numbers are much bigger and i want to have that story out there for people to settle with because we have such a big system and such an old system that it's just going to need we're seeing it with this with the sewage treatment plant or these big numbers coming in obviously the desal plants another one where we're actually spending huge amounts of money every day and i just want that notion to be out there for people to understand in mister dominguez concept of transparency to know what the huge values are and the huge costs are so i guess that's a comment i don't know how we deal with that exactly but these numbers give  a more comforting and picture than we really have thank you for that clarification i appreciate the point about the appeals in general i support the concept of decisions being able to be moved up to the electeds eventually not easily necessarily but just that's why that's the just a foundation of the democratic system and  we are ready for a motion well then i would move that the finance committee recommend to council the resolution as proposed with the there's one change that we heard that's not built into this process be won from the that can go it goes to the public works director but then appeals can go to council with water commission recommendations