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City of San Leandro <br />Meeting Date: July 15, 2019 <br />Staff Report <br />Agenda Section:File Number:19-370 PUBLIC HEARINGS <br />Agenda Number: <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:Debbie Pollart <br />Public Works Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report for a City of San Leandro City Council Resolution to Receive a <br />Report on Wastewater Utility Capacity Charges and to Amend the City of San <br />Leandro Administrative Code Title 6, Chapter 4, Section 6.4.110 to Reflect <br />Connection Fees Recommended by the Report <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council receive a report titled “Wastewater Utility Capacity <br />Charges Study,” which analyzes the fees paid when adding new demand to the City sewer <br />system. Staff further recommends that the City Council update the connection fees according to <br />the recommendations in the report. <br />BACKGROUND <br />Capacity charges are assessed when new demands are put on the sewer and treatment system, <br />such as new development or increases in production. They are meant to pay for facilities in <br />existence and for facilities that will be constructed in the future. They can only be used for funding <br />capital improvements. Sometimes, capacity charges are referred to as “connection fees.” For the <br />purposes of this report, these terms are synonymous. <br />In 2018, the City contracted with Municipal Financial Services to evaluate current capacity <br />charges and recommend changes to the schedule. The study calculated the value of the <br />wastewater treatment system and the total capacity of the system in terms of flow, biochemical <br />oxygen demand (BOD) and suspended solids. It then found unit costs for each of these <br />measures. <br />For new residential construction, the capacity charge is calculated by using the expected average <br />usage as found in the Wastewater Utility Financial Plan and Rates Study. For non-residential <br />users, staff calculates the capacity charge when issuing the building permit by using estimates of <br />expected discharge and multiplying by the unit costs. The fee may be adjusted at the end of one <br />Page 1 City of San Leandro Printed on 7/9/2019 <br />157