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Ord 0226 06/2024ORDINANCE NO. 226 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE VALLECITOS WATER DISTRICT ADOPTING WATER AND WASTEWATER CAPITAL FACILITY FEES AND MAKING CERTAIN DETERMINATIONS AND FINDINGS UNDER CEQA AND TAKING CERTAIN ACTIONS RELATING THERETO WHEREAS, the Board of Directors of the Vallecitos Water District (the "District") is authorized pursuant to California Government Code section 66013 to impose water and wastewater capacity fees and charges for public facilities in existence at the time the fee or charge is imposed, or for new facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged; and WHEREAS, the District previously adopted its water and wastewater capital facility fees ("Water Charge" and "Wastewater Charge," respectively, or collectively, the "Charges"), which are each "capacity fees" within the definition of Government Code section 66013; and WHEREAS, the Charges were previously adopted pursuant to the recommendations of a Capacity and Impact Fee Study Final Report, dated November 8, 2011 ("Prior Report"), prepared for the District by an independent consultant, which has since been updated as described in more detail below; and WHEREAS, pursuant to the Prior Report, the Water and Wastewater Charge is imposed per equivalent dwelling unit, (each an "EDU"), and is determined by identifying necessary capital improvements to fund new connections to the water or wastewater system, financing costs discounted to present value, existing debt, and other expenses related to offsetting the impact of new connections to the system, which are then allocated to new growth to be served by the new facilities and extra capacity in existing facilities based on projected EDUs; and WHEREAS, each EDU is based on District data leading to the allocation of up to 500 gallons of water consumption per day per EDU for purposes of the Water Charge, and up to 250 gallons of wastewater generation per day per EDU for purposes of the Wastewater Charge; and WHEREAS, EDUs are assigned based on projected water use and wastewater generation, as provided by the applicant and reviewed by the District Engineer; and WHEREAS, a minimum of one EDU is assigned to each single-family dwelling unit; and WHEREAS, for non-residential connections, EDUs shall be assigned based on projected water use or wastewater generation, with each EDU equaling up to 500 gallons per day of water use and 250 gallons per day of wastewater generation, and any projected usage above such amounts shall be prorated; and WHEREAS, it is the policy of the Board that, to the extent a connection uses greater amounts of water than projected, or generates greater amounts of wastewater, the applicant will be required to purchase or lease additional EDUs; and Ordinance No. 226 Page 2 WHEREAS, the Prior Report has since been updated to account for the District's 2018 Water, Wastewater, and Recycled Water Master Plan, adopted by the District Board on May 1, 2019, which accounts for the latest land use revisions from the County of San Diego, and Cities of Escondido, Vista, Carlsbad, and San Marcos, as well as to bring Master Plan costs to January 2019 values using the Engineering News Record Construction Cost Index (the "Updated Report"); and WHEREAS, the Updated Report has since been updated to account for the District's 2023 Twin Oaks Sub -Basin Sewer Plan, adopted by the District Board on June 19, 2024, which amended the 2018 Water, Wastewater, and Recycled Water Master Plan to include the Twin Oaks Valley Road Sewer Improvement Project, as well as incorporate these project costs into the 2018 Master Plan costs with a Wastewater Capital Facility Fee Revision (the "Cap Fee Study") to bring the Wastewater Capital Facility Fee to January 2024 values using the Engineering News Record Construction Cost Index; and WHEREAS, the Twin Oaks Sub -Basin Sewer Plan and 2023 Cap Fee Study, which maintains the same model and method of calculating the Charges as the Prior Report and Updated Report but updates the model to account for the Twin Oaks Valley Road Sewer Improvement Project, has been presented to the Board and has been made available to the public for inspection for at least ten (10) days prior to the meeting at which this Ordinance is considered; and WHEREAS, the Board of Directors finds it is appropriate at this time to adjust the amount of the Charges, based on the findings and analysis contained in the 2023 Cap Fee Study; and WHEREAS, the District now wishes to adopt increases to the Charges, in the amounts set forth in Exhibits "A" and "B" hereto; and WHEREAS, the Board of Directors has determined that: (1) its proposed Charges do not exceed the estimated reasonable cost of the services and facilities for which the Charges will be imposed; and (2) the allocation of those costs bear a fair or reasonable relationship to the burdens on, or benefits that those who pay the Charges will receive from such services and facilities, as evidenced by the Updated Report and the 2023 Cap Fee Study. BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE VALLECITOS WATER DISTRICT: SECTION 1. Incorporation of Recitals: The Recitals set forth above are incorporated herein, are made findings and determination of the Board of Directors and are an operative part of this Ordinance. SECTION 2. CEQA Compliance: (a) The District, as lead agency under the California Environmental Quality Act ("CEQA"), has evaluated the potential environmental impacts of adopting the Charges. As the decision-making body for the District, the Board of Directors has reviewed and considered the information contained in the administrative record for the adoption of the Charges. Ordinance No. 226 Paae 3 (b) The Board of Directors finds that to maintain levels of service for existing customers and to provide service to potential new development within the District's service area, additional infrastructure and facilities may be necessary in the future. The Charges are intended to provide a source of funds if capital improvement projects and programs are proposed in the future to provide the additional infrastructure and facilities. The Board of Directors finds that this Ordinance does not approve any particular capital improvement project or program, nor does it commit the District to approve any particular capital improvement project or program. The revenue from the Charges will be placed in a separate fund for potential future capital improvement projects or programs, if any are approved. If any capital improvement projects or programs that would be funded by the Charges are proposed in the future, those projects or programs would be subject to environmental review under CEQA, as applicable, before they are approved. (c) Based on its review of the record and exercising its independent judgment, the Board of Directors determines that (1) the adoption of the Charges is not a "project" within the definition of CEQA; (2) even if it is a project, it is exempt from CEQA; and (3) even if it is not exempt, no further environmental review is necessary under Public Resources Code section 21166. (d) The District's adoption of the Charges is not a "project" within the meaning of CEQA. Adoption of the Charges does not approve any particular capital improvement project and it does not commit the District to approving any particular capital improvement project. It is unknown if and when a capital improvement project funded by Charges might be proposed and approved. As such, adoption of the Charges will not cause any physical change in the environment or lead to a reasonably foreseeable indirect physical change to the environment and is not a "project" within CEQA's meaning. (Public Resources Code section 21065; CEQA Guidelines section 15378(a).) Any direct or indirect changes to the environment from the Charges are speculative. Further, the Charges are a funding mechanism that does not commit the District to approving or implementing any project at all and as such is not a "project" subject to CEQA. (CEQA Guidelines section 15378(b)(4).) (e) Even if adoption of the Charges is a "project," it is exempt from CEQA, CEQA exempts a public agency's approval of rates or charges if they are intended to obtain "funds for capital projects, necessary to maintain service within existing service areas ..." (CEQA Guidelines section 15273(a)4).) As explained above, the purpose of the Charges is to obtain funding for potential capital improvement projects that might be necessary for the District to accommodate planned growth within its existing service area. The Charges are necessary to meet the District's protected need for additional facilities and infrastructure to provide services within its existing service areas. The Charges are also exempt under the "common sense" exemption because it can be seen with certainty that there is no possibility that adoption of the Charges may have a significant effect on the environment. (CEQA Guidelines section 15061(b)(3).) As noted above, adoption of the Charges does not authorize, approve, or commit the District to any specific capital improvement project or program, or any construction activity at all. For these reasons, there is no possibility that adoption of the Charges may have a significant environmental impact. Further, there is no evidence of any unusual circumstances related to the Charges that would cause a significant impact on the environment. (Guidelines section 15300.2(c).) Ordinance No. 226 Page 4 (f) Even if adoption of the Charges is not exempt, no further CEQA analysis is necessary. The Vallecitos Water District's 2018 Water Wastewater and Recycled Water Master Plan Program EIR (PEIR), which the District certified on May 1, 2019, analyzed at a program level the environmental effects of the potential programs and capital improvement projects that might be funded by the Charges should the District approve such programs and projects in the future. Under Public Resources Code section 21166, once an agency has certified an EIR for a project, no further environmental review is required unless there are: (1) substantial changes to the project that require major revision of the EIR; (2) substantial changes occur with respect to the circumstances under which the project is being undertaken that will require major revisions to the EIR; or (3) new information, that was not known and could not have been known when the EIR was certified, becomes available. None of those circumstances exist here. Charge fees were in place when the PEIR was certified and the action before the District simply changes the amount of those fees. This increase does not constitute a substantial change to any project, a substantial change with respect to the circumstances under which any project will be undertaken, or new information that was not known or could not have been known when the PEIR was certified. (g) The Board of Directors has considered any comments received at the public meetings on June 19, 2024, prior to adoption of this Ordinance. (h) These CEQA determinations reflect the Board of Directors' independent judgment and analysis. (i) The documents and materials that constitute the record of proceedings on which these findings have been based are located at 201 Vallecitos de Oro, San Marcos, CA 92069. The custodian for these records is the Board Secretary. SECTION 3. Water and Wastewater Study: All development projects at the sole expense of the developer shall be required to complete a Water and Wastewater Study which considers water demand and wastewater generation from development to determine if the current water and wastewater infrastructure is sufficient to accommodate the development and provides recommendations for needed capital improvements to provide service. SECTION 4. Adoption of Charges: The Board of Directors hereby adopts the Charges in the amounts set forth in Exhibits "A" and "B" hereto. EDUs for Water Charges and for Wastewater Charges are assigned as set forth in the fee schedule set forth in Exhibits "A" and "B" hereto. The Charge shall be imposed on any property or any person requesting a new, additional, or expanded connection to the District's water or wastewater system, and the amount of the Charge imposed shall vary in accordance with the number of EDUs assigned to the property and shall equal the estimated reasonable cost of providing the service for which the Charge is imposed. EDUs shall be determined based on projected water use or wastewater generation, as provided by the applicant and confirmed by District staff. In the event actual water use or wastewater generation exceeds projected demand, the District may increase the assigned EDU to such connection and require the applicant to purchase or lease such additional EDUs at such later date. Additionally, the fee schedule set forth in Exhibits "A" and "B" includes assigned EDUs based on meter sizes. In the event that a particular connection requires water use or wastewater generation that exceeds the meter size assigned to such Ordinance No. 226 Page 5 property, but the District allows the applicant to install a smaller meter, the District shall assign the applicant additional EDUs for purposes of determining the Charges based on projected use, regardless of whether such EDUs exceed the amounts set forth in Exhibits "A" and "B" for such meter size. SECTION 5. Annual Adjustments to Charges: Commencing January 1, 2025, and each January 1 thereafter, the Charges (subject to any decrease set forth in Section 4 above), shall be automatically increased annually by the percentage change in the Engineering News Report Construction Cost Index — Los Angeles measured from the immediately preceding December and December of the prior year. SECTION 6. Inconsistency with Other Actions, Fees, and Charges: To the extent that the Charges established by this Ordinance, or any provision herein are inconsistent with any rates, fees, charges previously adopted by the District, or other actions previously taken by the District, it is the explicit intention of the Board of Directors that the Charges adopted in this Ordinance and provisions contained herein shall prevail. SECTION 7. Time of Payment of Water and Wastewater Capital Facility Fees: Water and Wastewater Capital Facility Fees shall become due, and payable pursuant to Resolution No. 1441 and prior to commitment by the District for service. SECTION 8. Non -Refundable: To assure availability for proper planning and to meet obligations incurred by the District to develop capacity in the District's water and wastewater system in a timely manner, all water and wastewater capital shall be non -transferable, and all water and wastewater capital facility fees collected shall be non-refundable. SECTION 9. Severability: If any section, subsection, clause or phrase in this Ordinance or the application thereof to any person or circumstances is for any reason held invalid, the validity of the remainder of this Ordinance or the application of such provisions to other persons or circumstances shall not be affected thereby. The Board of Directors hereby declares that it would have passed this Ordinance and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses or phrases or the application thereof to any person or circumstance be held invalid. SECTION 10. Future Amendments: It is the explicit intention of the Board of Directors in adopting this Ordinance that future amendments to the Charges may be adopted either by ordinance or resolution of the District. SECTION 11. Authority to General Manager: The General Manager, or his or her designee, is hereby authorized and directed to take all actions necessary to implement the Charges effective August 18, 2024, as well as to implement any increase to the Charges as authorized herein and in accordance with the schedule of rates in Exhibits "A" and "B" hereto. Additionally, the General Manager, or his or her designee, is hereby authorized and directed to account for all proceeds of the Charges in accordance with the requirements of Government Code section 66013. Ordinance No. 226 Page 6 SECTION 12. Limitations on Judicial Review: Any judicial action or proceedings to attack, review, set aside, void, or annul this ordinance or any water or wastewater capital facility fee increase adopted as a result of this ordinance shall be brought no later than one hundred twenty (120) days following the date this ordinance has been adopted by the Board of Directors of the Vallecitos Water District. Any action not filed within the 120 -day period shall be forever barred. SECTION 13. Effective Date: August 18, 2024. This Ordinance shall become effective immediately upon adoption, subject to the effective date set forth above. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Vallecitos Water District at a regular meeting held on this 19th day of June 2024, by the following roll call vote: AYES: BOYD-HODGSON, ELITHARP, GROSET, HERNANDEZ, PENNOCK NOES: ABSTAIN: ABSENT: Tiff ny Boyd -Hodgson, President Board of Directors Vallecitos Water District ATTEST: Js Gumpel, Secy ary Board of Directors Vallecitos Water District EXHIBIT "A" Vallecitos Water District Water Capital Facility Fee Schedule Adopted: June 19, 2024 Effective: August 18, 2024 1. The Equivalent Dwelling Unit (EDU) is established as 500 gallons per day (GPD). A 3/4" meter is equal to one EDU. Meters larger than 3/4" are equal to a base of 1 EDU times the incremental increase in meter continuous flow rate in gallons per day (see schedule below). 2. Water meter size and amount of capacity to be purchased is determined by using 2018 Master Plan criteria, land use, information submitted by the applicant, and the project's Water and Wastewater Study, if applicable. The minimum capacity shall be based on the 2018 Master Plan land use designations. Purchase of additional capacity may be required, and separate landscape meters are required except for single family residences. One meter shall not serve more than one APN. 3. Residential and small commercial applicants for service on lots smaller than one acre are subject to the purchase of water capacity for 3/4" meter (1 EDU). 4. All other applications for water service must be submitted to the District for analysis and determination of meter size and amount of capacity to be purchased, with a minimum capacity of 1 EDU. After service has commenced, accounts will be monitored for usage and if the purchased capacity is exceeded based on the most recent twelve-month average, the customer will be notified by the District and be given the option to purchase additional capacity or to have a surcharge on water consumption over the purchased capacity added to the monthly bill, or the customer must significantly reduce consumption within three months. 5. Water Capital Facility Fees are modified to $10,036 per EDU to be adjusted annually per Section 5 of this ordinance. 6. The Water Capacity Surcharge is established as $3.33 per unit (hundred cubic feet). 7. The Water Meter Base Capacity Schedule is established as minimum for each meter size: 2024 Capital Facili Fee Meter Size EDU GPD Base Fee 3/4" 1.0 500 $10,036 1" 2.5 1,250 $25,090 1-1/2" 6.0 3,000 $60,216 2" 8.0 4,000 $80,288 3" 17.5 8,750 $175,630 4" 25.0 12,500 $250,900 Meters larger than 4" are restricted to fire service purposes unless request is submitted to the Board of Directors for consideration. Capital Facility Fees are increased based on the annual change in the Engineering News Record (ENR) Construction Cost Index, Los Angeles. The 2024 Capital Facility Fees are based on the December 2023 ENR index of 15,258. EXHIBIT "B" WA MW Vallecitos Water District Wastewater Capital Facility Fee Schedule Adopted: June 19, 2024 Effective: August 18, 2024 1. Wastewater Capital Facility Fees are based upon the amount of the demand or increased demand as measured by Equivalent Dwelling Units (EDUs) of 250 gallons per day (GPD) of wastewater. 2. The amount of capacity to be purchased is determined by the District using 2018 Master Plan criteria, land use, information submitted by the applicant, and the project's Water and Wastewater Study, if applicable. The minimum capacity shall be based on the Master Plan land use, with minimum capacity of one EDU. Purchase of additional capacity may be required. The fee for residential use is determined using the schedule below. The fee calculation for non-residential use may be based on the project -specific Study or analysis using 2018 Master Plan criteria. The applicant may submit information to be considered in the capacity determination. 3. Following commencement of service, other than service for residential use, the account will be monitored for flow volume. If the flow exceeds the purchased capacity based on the most recent twelve-month average, the payment or lease (if qualified) of additional capital facility fees may be required. Unless determined otherwise, all water entering the property through the water meter or from an on-site water source is assumed to reach the wastewater system. 4. The Wastewater Capacity Lease is established as $80.24 per gallon per day. 5. The Wastewater Capital Facility Fee Schedule is as follows: 2024 Capital Facility Fee Residential Category GPD EDU Sewer Fee Single Family Residence ** 250 1.00 $20,059 Mobile Home (each unit in ark 200 0.80 $16,048 Mixed Use — Residential (per unit 180 0.72 $14,443 "Multi -Family residential fees are calculated using the Water and Wastewater Study, land use categories in the 2018 Master Plan, and information submitted by the applicant. Nonresidential fees are based on land use and/or actual flow capacity as determined by District review. Capital Facility Fees are increased based on the annual change in the Engineering News Record (ENR) Construction Cost Index, Los Angeles. The 2024 Capital Facility Fees are based on the December 2023 ENR index of 15,258.