Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of May 28, 2019
Title
PUBLIC HEARING ON THE ANNUAL LEVY FOR
THE SEWER CHARGE AND ENGINEER’S REPORT
(Acting Public Works Director Lucho Rodriguez)
Body
Recommended Action:
Recommendation
It is recommended that the City Council hold a public hearing, and:
1. Make a finding that there is no majority protest by property owners within the City of Hermosa Beach; and
2. Adopt enclosed Resolution, with attached Engineer’s Report, and place the sewer service charge on the annual County of Los Angeles Tax Roll.
Body
Background:
At the June 23, 2015 City Council meeting, Council adopted a resolution adopting for the first time an annual sewer service charge authorizing to fund maintenance, operation, servicing, and improvements to the City’s sewer collection system.
The sewer service charge is based on the direct cost of providing maintenance, operation, servicing, and improvements to the sewer collections system. The $115 charge per Equivalent Service Unit (ESU) for fiscal year 2015-16 (as adopted by the City Council) was multiplied by the ESUs for each residential parcel; and by water consumption for non-residential users to determine the charge for each parcel. The total of the charges collected from the parcels funds the City’s sewer services.
The June 23, 2015 City Council action also includes a provision stipulating that beginning on July 1, 2016 and each July 1 through 2020, the sewer service charge shall be increased by the annual increase in the Consumer Price Index (CPI-W) for Urban Wage Earners and Clerical Workers in the Los Angeles-Riverside-Orange County Area (now named Los Angeles-Long Beach-Anaheim, which covers the Los Angeles and Orange County Areas), including all items as published by the US Bureau of Labor Statistics as of March 1 of each year, not to exceed two percent (2%) per year.
The FY 2018-19 service charge per ESU increased by 2.0% to $121.69, per Council action. For FY 2019-20, the Los Angeles-Long Beach-Anaheim CPI-W increase is 2.9% (Attachment 1). However, as noted above, yearly increases shall not exceed 2% per approved Council action. Therefore, the new annual sewer service charge when increased by the allowable 2% CPI-W index will be $124.12. As required under state law, each property will be notified by mail of the CPI-W increase prior to June 1, 2019.
Analysis:
For Fiscal Year 2019-20, the sewer service charge rates, adjusted to the additional 2% CPI-W increase for residential parcels are as listed below:
Residential Parcel Sewer Charges
Single family residential units are charged at 1.0 ESU per parcel; multi-family residential units are charged at 0.6 ESU per parcel and condominiums at 1.0 ESU per parcel as they are similar to single family residents in use. Vacant parcels of any use are charged 0.5 ESU. For FY 2019-20 the proposed charge per 1.0 ESU is $124.12.
The CPI-W increase of 2% also applies to non-residential parcels. A summary of ESUs for land-use classes can be found on pages 12 and 13 of the Engineer’s Report (Attachment 2). For non-residential parcels the cost went up 2% per ESU, whether their sewer fee went up or down relative to last year is a function of whether they used more or less water than last year. The ESU for various non-residential land uses is calculated per the following equation:
ESU = commercial water consumption gallons per day (GPD)/260 GPD per single family residential unit (SFRU)
The Engineer’s Report contains detailed information about the annual charge and the charge to be applied to the parcels. Also included in the report is information about the use of revenue, annual increases, and Proposition 218 considerations. Every parcel in the City is subject to the sewer service charge.
This public hearing provides an opportunity for the City Council to hear and consider all protests to the annual levy of the sewer service charge. In the absence of a majority protest by property owners within the City of Hermosa Beach, the City Council may order implementation of City sewer service charge on the FY 2019-20 property tax rolls. Council action on the staff recommendation is required in order to place the annual charge on the tax roll.
If Council finds that protest is made by the property owners of a majority of separate parcels of property described in the Engineer’s Report, then the Resolution and Engineer’s Report shall not be adopted and the charges shall be collected separately from the tax roll, by a method to be determined, and shall not constitute a lien against any parcel or parcels of land.
The City must notify each property owner in writing of the CPI-W increase at least thirty (30) days before the effective date of the adjustment per state law. To meet this requirement, the enclosed draft notice (Attachment 3) must be sent prior to June 1, 2019, after Council adoption of the resolution.
A notice of public hearing for the annual levy for the sewer charge was published in the local newspaper (Attachment 4).
General Plan Consistency:
PLAN Hermosa, the City’s General Plan, was adopted by the City Council in August 2017. This report and associated recommendations have been evaluated for their consistency with the City’s General Plan. Relevant policies are listed below:
Infrastructure Element:
4.1 Sewer system master plan. Ensure that the Sanitary Sewer Master Plan contains an effective and proactive maintenance program that reduces future operation costs.
4.3 Service fees. Ensure that allocation of the Sewer Service Charge is efficient and transparent to the public.
Fiscal Impact:
The anticipated total revenue is approximately $1,040,000, which is included in the 2019-20 Preliminary Budget.
Attachments:
1. Engineer’s Report with CPI-W increase for FY 2019-20
2. Draft Resolution
3. Draft Notice to Property Owners
4. Notice of Public Hearing
Respectfully Submitted by: Reed Salan, Associate Engineer
Concur: Lucho Rodriguez, P.E., Acting Public Works Director/City Engineer
Noted for Fiscal Impact: Viki Copeland, Finance Director
Legal Review: Lauren Langer, Assistant City Attorney
Approved: Suja Lowenthal, City Manager