Loading...
CC Resolution No. 23-067 approving the renewal and collection of the 2019 Clean Water and Storm Protection Fee with a 3% increase in rates for FY 2023-24 RESOLUTION NO. 23-067 A RESOLUTION OF THE CUPERTINO CITY COUNCIL APPROVING THE RENEWAL AND COLLECTION OF THE EXISTING 2019 CLEAN WATER AND STORM PROTECTION FEE FOR FISCAL YEAR 2023-2024 WHEREAS, on March 5, 2019, the City Council of the City of Cupertino adopted Resolution 19-022 initiating proceedings to obtain approval of the proposed 2019 Clean Water and Storm Protection Fee (“Fee”), which is a property related fee conforming to Article XIII D, Section 6 of the California Constitution, and approved the Fee Report for the Water Quality and Flood Protection Fee (“Fee Report”) which sets forth the basis and the amount of the 2019 Clean Water and Storm Protection Fee on various parcels of land in order to finance, in compliance with Article XIIID of the Constitution, the costs of the City’s Clean Water and Storm Protection Program; and WHEREAS, on March 18, 2019, a notice of public hearing was mailed to all property owners whose property would be subject to the Fee, in accordance with California Health and Safety Code Section 5473.1; and WHEREAS, on May 7, 2019, the City Council adopted Resolution 19-041 finding that a majority protest does not exist and ordering a mailed ballot proceeding for the proposed Fee proceeding in accordance with Article XIII of the Constitution, Section 53755.5 of the Government Code; and WHEREAS, on May 7, 2019, the City Council introduced Ordinance No. 19-2183 establishing Chapter 3.38 of the Municipal Code to establish the Clean Water and Storm Protection Fee; and WHEREAS, on May 17, 2019, ballots were mailed to all property owners whose property would be subject to the Fee; and WHEREAS, on July 17, 2019, by its Resolution 19-096 the City Council adopted Ordinance No. 19-2183 establishing Chapter 3.38 of the Municipal Code, found that the Fee was approved by 51.15% of the returned ballots from property owners of the property subject to the Fee and thereby ordered that the Fee for fiscal year 2019-20 be levied at the rates specified in the Fee Report; and WHEREAS, Sections 3.38.040 through 3.38.070 of the Ordinance establishing the 2019 Clean Water and Storm Protection Fee allow the City Council to review the Resolution No. 23-067 Page 2 Fee annually and apply a rate increase based on the change in the Consumer Price Index (“CPI”) up to a maximum increase of 3% in any single year, and to collect the Fee on the property tax roll in the same manner, by the same persons, and at the same time as, the general taxes; and WHEREAS, a written report titled “Engineer’s Report, Assessment of Fees for Storm Drainage Purposes Nonpoint Source Pollution Program” (“report”), concerning the method of assessing fees to fund the City’s Stormwater Management Program, was prepared by the Director of Public Works pursuant to Section 3.36.080(B) of the City’s Municipal Code and filed with the City Clerk on May 31, 2023; and WHEREAS, notice of the proposed rates was published in a local newspaper on 5/19/2023 and 5/26/2023; and WHEREAS, the City Council of the City of Cupertino finds and determines as follows: 1. There is a need in the City to continue collecting the Clean Water and Storm Protection Fee to cover the costs of the Clean Water and Storm Protection Program; and 2. The facts and evidence presented establish that there is a reasonable relationship between the need for this Fee and the impacts for which this Fee shall be used, and that there is a reasonable relationship between the Fee’s use and the properties, which are to be charged the Fee. These relationships or nexus are described in more detail in the above referenced Fee Report; and 3. The amounts of the Fee for each category of property, as set forth below in the Schedule of Charges, are reasonable amounts, because the amounts are based on the methodology established in the Fee Report. NOW, THEREFORE, BE IT RESOLVED, by the City Council, that: 1. Charges. The 2019 Clean Water and Storm Protection Fee shall continue to be charged to each parcel within the City to contribute to the costs of the City’s Clean Water and Storm Protection Program. The Fee charged will be increased by 3% for Fiscal Year 2023-2024. Resolution No. 23-067 Page 3 2. Use of Revenue. The revenue derived from said Fee shall be used in connection with implementing and enforcing Chapters 3.38 of the Cupertino Municipal Code titled “Clean Water and Storm Protection Fee” and Chapter 9.18 titled “Stormwater Pollution Prevention and Watershed Protection.” 3. Schedule of Charges. a. Annual fees for each category of property will be assessed and collected as follows: 4. Judicial Action to Challenge this Resolution. Any judicial action or proceeding to challenge, review, set aside, void, or annul this resolution shall be brought within 120 days from the date of its adoption. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 6th day of June, 2023, by the following vote: Single-Family Residential * Small (Under 0.13 acre)37.68$ per parcel Medium (0.13 to 0.22 acre)45.75$ per parcel Large 0.23 to 0.40 acre)57.25$ per parcel Extra Large (over 0.40 acre)109.61$ per parcel Condominium 1 (1 story)37.68$ per parcel Condominium 2+(2+ stories)12.34$ per parcel Non-Single-Family Residential ** Multi-Family Residential 31.81$ per 0.1 acre Commercial / Retail / Industrial 41.59$ per 0.1 acre Office 31.81$ per 0.1 acre Church / Institutional 26.91$ per 0.1 acre School (w/playfield)19.57$ per 0.1 acre Park 7.34$ per 0.1 acre Vacant (developed)2.45$ per 0.1 acre Open Space / Agricultural * Single-Family Residential category also includes du- tri- and four-plex units ** Non-SFR parcels are charge per the tenth of an acre or portion thereof *** Low Impact Development Adjustment only applies to condominium and non-single- family properties. Land Use Category Fee no charge Low Impact Development Adjustment ***25% Fee Reduction Resolution No. 23-067 Page 4 Members of the City Council AYES: Wei, Mohan, Chao, Fruen, Moore NOES: None ABSENT: None ABSTAIN: None SIGNED: ________ Hung Wei, Mayor City of Cupertino ________________________ Date ATTEST: ________________________ Kirsten Squarcia, City Clerk ________________________ Date 06/13/23 6/20/23 Resolution No. 23-067 Page 5 EXHIBIT A ENGINEER'S REPORT ASSESSMENT OF FEES FOR STORM DRAINAGE PURPOSES NONPOINT SOURCE POLLUTION PROGRAM A. Program Description and Purpose The purpose of this assessment is to collect fees to fund the City of Cupertino's Nonpoint Source Pollution Prevention Program mandated by the Environmental Protection Agency (EPA) and the Clean Water Act. Regulations by the EPA and the State of California require cities to take specific actions to eliminate or control pollutants in waters of the State. The term "nonpoint source pollution" represents a process whereby pollutants, debris, trash, sediment and chemicals which accumulate on streets, in neighborhoods, at construction sites, in parking lots, and on other exposed surfaces are washed off by rainfall and carried away by stormwater runoff (via city drain inlets and pipes installed for flood control) into local creeks and the San Francisco Bay. Sources of these pollutants may include automobile exhaust and oil, pesticides, fertilizers, eroded soil, detergents, pet waste, paint, litter, and other material carried through the City's storm drainage system without treatment directly to the Bay. Many of these pollutants are hazardous to aquatic and human life. The City of Cupertino has implemented several mandated and pro-active programs to mitigate this problem. Among other activities, these programs include an illegal storm drain discharge investigation and elimination complaint response program; scheduled proactive inspections of outdoor housekeeping practices at business sites within the City; bi-weekly sweeping of residential streets and weekly sweeping of commercial streets; installation of trash capture devices and curb drain inlet screens to prevent litter from entering the City's storm drainage system; inspection and cleaning of storm drain structures and trash capture devices; public education and engagement with teachers and students, educational activities offered at City events; and a popular, unique, and well- established District-wide third-grade creek education & field trip program led by the City's naturalist at McClellan Ranch Preserve and Stevens Creek. Resolution No. 23-067 Page 6 The San Francisco Bay Regional Water Quality Control Board (Water Board) approved the first Municipal Regional Permit (MRP) on October 14, 2009, and, on November 18, 2015, adopted the second regional permit (MRP 2.0) with additional requirements that became effective on January 1, 2016. MRP 2.0 was issued to the City of Cupertino and 75 agencies or co-permittees which discharge storm water through municipal drainage systems to local creeks and the San Francisco Bay. The City of Cupertino and 14 other co-permittees in Santa Clara County are members of the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP) which works collaboratively to maintain compliance with MRP 2.0. In addition to conducting local activities, City staff work closely with the other SCVURPPP jurisdictions to implement pollution prevention, source control, monitoring, and educational programs. A further update and reissuance of the Municipal Regional Permit (MRP 3.0) was adopted by the Regional Water Quality Control Board and became effective on July 1, 2022. In FY 2019-2020, the Nonpoint Source budget was increased to accommodate a new street sweeping contract, enhanced assessment and maintenance of aging structures, and additional staff to clean and maintain the city’s storm drain system. The City’s storm drain system consists of 2092 drain inlets and 90 miles of storm drainage pipes. Of the drain inlets 178 are fitted with full trash capture devices and 281 have curb screens. Maintenance of these assets includes twice per year cleaning of inlets and trash capture devices which protects the city from flooding while preventing stormwater pollution. The budget for FY 20-21 included those ongoing enhancements along with increased allocations of staff time to more accurately reflect time spent on stormwater pollution prevention tasks. A total of 5.07 full time employees are included in the Nonpoint Source program budget across 21 positions with varying allocations of a person’s time. One maintenance worker is covered at 100%, the Nonpoint Source inspector is at 95%, and the remaining positions are covered at between 2% - 60%. The budget for FY 21-22 and FY 22-23 maintained those adjustments and no changes in those areas are expected for FY 23 -24. B. Estimated Expenditures The total estimated (amended) budget to implement the required programs described above for FY 22-23 was approximately $2,127,933. Actual expenses for all of FY 22-23 are anticipated to be approximately $2,025,222. Resolution No. 23-067 Page 7 The breakdown of past actuals, current actuals as of Q3, and budgeted expenses for FY 23-24 are as follows: FY 21-22 Actuals FY 22-23 Q3 7/1/2022 – 3/31/2023 FY 23-24 Requested Budget Staffing $844,326 $687,122 $947,538 Materials $56,287 $56,956 $73,748 Contract Services $322,762 $226,051 $678,920 Allocations $406,269 $249,823 $344,797 Cost Share & Rebate Programs $13,373 $9,159 $23,206 Total Expenses $1,643,017 $1,229,111 $2,068,209 Expected Final $2,025,222 Activities undertaken within the Nonpoint Source program for permit compliance: Countywide Program SCVURPPP Program Assessment - Regional Permit Implementation Regional Watershed Monitoring (administered by EOA, Inc.1) State NPDES 2 Permit Fees Countywide Public Education and Municipal Staff Training CA Stormwater Quality Association (CASQA) Participation County Policy Development Operations and Maintenance Catch Basin and Frequent Trash Capture Device Cleaning Installation of Trash Capture and Retractable Screen Devices On-call Emergency Spill and Discharge Response Staff and Equipment to Implement City's Mandated Litter Reduction Plan Street Sweeping (weekly in commercial areas) City Public Education Awareness Public Outreach Materials & Events 1 EOA, Inc. is the environmental engineering and regulatory consulting firm that manages the Santa Clara Valley Urban Runoff Pollution Prevention Program for the co-permittees www.eoainc.com 2 NPDES: National Pollutant Discharge Elimination System Resolution No. 23-067 Page 8 Third-Grade Creek Education for Local Schools Support High School Students' Watershed and Creek Education Support De Anza College and Community Environmental Education Community Engagement - Creek Cleanup & Watershed Monitoring Events Staff to Conduct Public Education, Training and Outreach CA Product Stewardship Council membership (Extended Producer Responsibility) Local Programs Development, Administration, and Evaluation of Mandated Programs Environmental Impact and New and Redevelopment Review Rain barrel, rain garden, and permeable pavement rebates Ordinance Revisions Database Maintenance Illegal Discharge Complaint Investigation and Enforcement Industrial/Commercial Discharger Inspection Program Construction Site Inspection Program Verification of Treatment Measure Maintenance by Private Property Owners Low Impact Development (LID) and Green Infrastructure Management Litter Reduction Education and Enforcement City's Participation in Multiple Countywide and Regional Programs Annual Parcel Stormwater Fee Assessment Other Staffing Costs Cost Allocations C. Revenue And Assessment Revenues generated to fund this program come from two fees assessed on parcels in Cupertino. The Storm Drain Fee was established in 1992. Revenues from that fee are inadequate to meet the expenses associated with maintaining the storm drain system in Cupertino and ensuring compliance with the MRP, so the Clean Water and Storm Protection fee was established in 2019 and first appeared on 2019-2020 property tax bills. As assessed on the 2022-2023 tax roll and direct billed, the revenue from the two fees will total approximately $1,467,386. Resolution No. 23-067 Page 9 FY 22-23 Assessed Actuals 1992 Storm Drain Fee $375,569 Clean Water and Storm Protection Fee $1,101,239 Total Assessed $1,476,808 1992 Storm Drain Fee Fees are based on a factor calculated from the City's Master Storm Drain Study runoff coefficients and average area of impervious surface per acre based on type of land-use development. The factor for each category is based on a comparison to an average residential parcel assigned a factor of one. Certain parcel-owners such as schools and government entities were exempt from such fees in 1992 and as such are not assessed this fee. The fee assessed on the 2022-2023 tax roll totaled $375,569. Those fees were applied to 16,558 residential, commercial, and vacant or recreational use parcels. 2019 Clean Water and Storm Protection Fee The Clean Water and Storm Protection Fee is imposed on properties that shed water, directly or indirectly, into the City’s storm drainage system, and is calculated to be proportionate to the amount of stormwater runoff contributed by each parcel, which is in turn proportionate to the amount of impervious surface area. The details of the methodology are described in the Fee Report as prepared by SCI in February of 2019 that is attached to the Clean Water and Storm Protection fee ordinance. The calculations are informed by the City’s 2018 Storm Drain Master Plan, which includes an analysis of the percentage of impervious area for Cupertino, and rates are further calculated by parcel size and land use category. Unlike the 1992 fee, the Clean Water and Storm Protection fee is subject to treatment under prop 218 and as such all parcels are assessed the fees without exemptions. The fees assessed on the 2022-2023 tax rolls totaled $1,002,324. Those fees were applied to 16,539 parcels in fourteen categories including single-family Resolution No. 23-067 Page 10 residential parcels in four sizes, condominiums, and apartments, commercial, office, institutional, recreational, and vacant. Fees billed directly to parcel- owners that do not receive property tax bills (such as schools and government) totaled $98,915 applied to 96 parcels. The total revenue invoiced from the Clean Water and Storm Protection fee for 2022-2023 is $1,101,239. For both fees, in coordination with the City’s contracted consultant for this purpose, each parcel was identified, and a fee established in a separate report submitted to the County entitled Certification of Special Assessment Annual Enrollment which lists the APN and fee associated fee. The consultant used by the City, SCI, prepares both forms and submits them to the County in accordance with the annual deadline in early August so that the fees can appear on the property tax bills. Additionally, SCI staff are available to answer questions via a phone number provided on the tax bill. D. Annual Review The Clean Water and Storm Protection Fee included annual review requirements beginning with FY 2020-2021 as described in ordinance 19-2183 (Chapter 3.38 of the Cupertino Municipal Code). Section 3.38.040 describes the review process and allows for an annual increase based on the change in CPI as of December each year up to 3% maximum if actual additional costs are incurred. The expenses attributed to the Nonpoint Source Program through third quarter of FY22-23 are $1,229,111 and are projected to reach $2,025,222 by the end of the fiscal year. That expected total is about $102,711 below the approved budget for FY22-23; however, it is above expected revenue by approximately $548,000. Available balance in Fund 230 is sufficient to make up the difference for FY22-23 but will be exhausted during FY23-24. The intention of the fee assessments is only to cover costs and not accrue a balance, however several factors resulted in fund balance accruing. In 2019, before the Clean Water and Storm Protection Fee ballot measure passed, a General Fund subsidy had already been budgeted and transferred that was ultimately not needed. In FY19-20 the program came in under budget largely because true staffing cost allocations had not yet been applied, something that Resolution No. 23-067 Page 11 was corrected for FY20-21. In FY20-21 a storm drain video and repair project was anticipated at $248,436, but no acceptable bids were received for the project, and it was also not conducted in FY21-22. An RFP was conducted in winter 2023 for an initial outfall survey to inform needed repair planning that will likely begin in late FY22-23, but at less than the full budgeted amount for the storm drain video and repair project. The fund 230 balance was $917,878 at the beginning of FY22-23. After covering the shortfall from the projected expenditures from FY22-23, the remaining balance in Fund 230 at the end of the fiscal year is expected to be approximately $369,400 heading into FY 23-24. The requested budget for FY 23-24 totals $2,068,209. With anticipated revenue at $1,477,239, which indicates a projected shortfall of $522,300. That shortfall will exhaust the remaining fund balance in Fund 230, meaning that an increase to the Clean Water and Storm Protection fee is now recommended to reduce the draw upon the General Fund to cover the difference. A 3% increase to the Clean Water and Storm Protection fee would result an increase of $1.33 per year for residents in the most common size of residential property and would generate approximately $33,000 per year additional revenue. That increase will not bridge the expected shortfall after exhausting the Fund 230 balance, but it will reduce the funding request of the General Fund. A full year of expenses and revenues for the Nonpoint Source Program were audited under the City’s annual external audit and reviewed by the City’s Audit Committee. An additional Agreed-Upon Procedures (AUP) audit specific to the Nonpoint Source Program was developed to further assess this program using a calendar year cycle. The AUP was performed on calendar year 2021 (Attachment D) and no exceptions were noted. The City anticipates that the AUP audits of calendar years 2022 and 2023 will be completed and reviewed by the Audit Committee ahead of the next time these fees are brought to Council for renewal in 2024. Chad Mosley Assistant Director of Public Works/City Engineer