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File Number: 19-224 <br />Capacity Charges <br />Capacity charges are one-time charges assessed to new users of the water treatment system. <br />For example, new homes and businesses are assessed a fee as part of the permitting process. <br />This fee is based on the projected usage of the system by the new user. Because staff found that <br />the average usage by residential customers has fallen since the last rate study (due in part to the <br />continued installation of water-saving devices), the fee for new residential projects would actually <br />decrease if the City Council adopts the new rates. Fees for non-residential users are based on <br />projections specific to the intended use. These rates would increase at the construction industry <br />cost index, known as the ENR 20 City. Staff will return at a future date with the proposed revisions <br />to the capacity charges. <br />Regulatory Environment for Sewer Service Fee Increases <br />Pursuant to Proposition 218, property-related fees, such as utility service fees, must be charged <br />proportionately to the actual usage of the utility service. Ratepayers must also be provided with <br />notice and an opportunity to protest any proposed rate increase. In addition, Proposition 218 <br />provides for the opportunity to protest at a public hearing and requires that public entities tabulate <br />the results of the protest ballot process. Staff engaged Municipal Financial Services to analyze <br />current rates and propose adjustments to meet Proposition 218 requirements. <br />If the City does not receive protest ballots from greater than 50% of the ratepayers, the City can <br />approve the proposed new maximum sewer service rates, which would be effective January 1, <br />2020. Subsequent fiscal years’ rates would be effective July 1 of each successive year. This <br />would provide enough time for rate payers to prepare for the change and for respective public <br />agencies to update billing systems. <br />ATTACHMENTS <br />Attachments to Staff Report <br />·Bay Area Clean Water Agencies Nutrient Reduction Study <br />·Survey of Single-Family Residential Sewer Rates <br />·Proposition 218 Public Notice <br />PREPARED BY: Justin Jenson, Plant Manager, Public Works Department & Hayes Morehouse, <br />Administrative Analyst II, Public Works Department <br />Page 3 City of San Leandro Printed on 4/30/2019