ASHLAND SYSTEM DEVELOPMENT CHARGE (SDC) REVIEW COMMITTEE
July 8, 2014
CALL TO ORDER
: Carlos Reichenshammer called the meeting to order at 1:07 p.m. in the Siskiyou Room, 51 Winburn Way.
Committee Members Present:
Russ Silbiger, Carlos Reichenshammer, Allen Douma (arrived at 1:09), Dan Jovick, Jac Nickels (arrived at 1:08) and Troy Brown Jr.
Committee Members Absent:
Bill Molnar, Mike Faught, and Tami De Mille-Campos
Consultant Present via phone:
Ray Bartlett (Financial Analyst)
Council Liaison Absent:
Mike pointed out last month we didn’t have a quorum but we did go over some of the documents. At this meeting the plan is to summarize the water SDC and answer any questions the committee has.
Dan asked whether there has been any consideration given to those homes with gray water systems. Mike asked Bill if they have gotten many questions regarding gray water. Bill said they do get the occasional question regarding gray water. One of the issues regarding gray water is how to calculate it, as well as tracking whether the system is in use as it passes from one owner to another.
Ray went over the comparison that was provided by the Community Development department (see attached).
Ray went over 3 basic reasons why the wastewater increases 151%. Also, in 2006 the City decreased the SDC from $2,707 for a typical 2,000 square foot house to $1,613—a 40% decrease. According to the 2006 “Water and Wastewater – System Development Charge Fee Schedules Summary Exhibit ‘A’ this was “. . . due to a significant downsized allocation of capital facility costs to growth and the removal of the treatment plant funded through the food and beverage tax receipts . . .” (page 1). In the proposed 2014 update, we also remove those elements of the WWTP that are funded from the food and beverage tax.
- In 2006 the reimbursement fee was based on a Net Asset Value of $9.7 million. The 2014 update is based on a Net of $8.9 million—an 8% decrease.
- In 2006 the improvement fee was based on $2.5 million of SDC qualified capital improvements. The 2012 Wastewater Master Plan (WWMP) has $9.0 million in SDC qualified capital improvements—a 260% increase.
- In 2006 the WWMP had a design capacity of 2.58 million gallons per day (mgd) while the 2012 WWMP has a design capacity of 3.18 mgd—a 23% increase.
|Net Asset Value (millions)
|Capital improvements qualified for SDC (millions)
|Design Capacity (million gallons per day)^
|^Average Daily Dry Weather flow. The 2006 SDC projected 2.58 mgd by 2023; however, the 2012 WWMP shows the current flows exceed this flow at 2.85 mgd.
Mike noted the waste water capital improvements are regulatory driven. Carlos asked about the exclusion of the food and beverage tax against the $9,017,350 growth apportionment. Ray stated that it excludes all of the capital that is being paid for by the food and beverage tax. None of the capital that is being proposed in the improvement fee is expected to be paid for by the food and beverage tax. At this point the food and beverage tax is paying for capital that has already been constructed so it is kept out of the reimbursement fee. Mike pointed out it could be used for other projects after the debt is paid off in 2022. Mike asked Ray if that was calculated towards future wastewater capital improvements. Russ pointed out there is a nice separation from priority 1 and 2 projects which is pretty close to when the majority of the debt is paid off so the food and beverage tax could be allocated to priority 2 projects at that time. Mike noted the projects have a completion timeline and we need to start collecting the SDC’s now otherwise development isn’t paying their fair share.
Russ read the ballot measure “Funds generated after 2022 not designated for parks will be used for wastewater treatment capital improvement projects.” Allen asked what percentage of the capital sewer costs are because we have to mitigate the problem we have even if there is no growth. Mike stated that some of the projects are directly related to growth and those would be delayed if there was no growth (such as the oxidation ditch listed in priority 2). Jac asked if there is no development but they still want to do these projects would rates be increased. Mike answered that it would be exactly what you do but that would be a tough conversation to have with Council if the project is 100% paid out of SDC’s because it is related to growth. Growth related projects really should be paid for with SDC’s. Mike pointed out the water master plan is pretty spot on for the growth projections. He feels very comfortable with the schedules based on those growth projections. Ray stated 14.4 million is allocated to rate payers which the master plan calls for significant rate increases over the next 5 years to produce the revenue to pay for that. It is also coupled with 4 additional debts that the City plans to take out to pay for the improvements. The total debt service that as forecast is greater than the food and beverage tax is likely to produce. The food and beverage tax is only paying for the capital that was purchased in 2010 and the small amount of the future debt service which doesn’t leave a lot of room to allocate money to reduce the proposed SDC. However, Mike and Ray will take a look at the impact of the food and beverage tax and get the information back to the committee.
APPROVAL OF WATER SDC
Russ/Dan m/s to recommend Council adopt the proposed water SDC increase.
All ayes. Motion passes.
Next meeting scheduled for August 5, 2014 to finish up Sewer.
Meeting adjourned at 2:00 pm
Tami De Mille-Campos, Administrative Assistant