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HomeMy WebLinkAbout2009-04-15 e-packet~P~G1A~ M~T'~ ~ IN~s ~G`T~I S~~~ a ~ REDEVE.LOPMENT AGI?~TCY '" ~) CiTY OF SOUTH SAN FRA:[~CISCO o c~Li`~cR~'~ CITY COLivTCIL OF THE CITY OF SOUTH SAN FRA:I~CISCO P.O. Bcx 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM 400 GRAND AVEI~LJE SOUTH SAN FRANCISCO, t~A 94080 WEDNESDAY, APRIL 15, 2009 7:00 P.M. NOTICE IS HLRLI3Y GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the Redevelopment Agency and the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, the 15°' day of April, 2009, at 7:00 p.m., in the Large Conferen•:;e Room, at City Hall, 400 Grand Avenue, South San Francisco, California. Purpose of the meeting: 1. Call to Order. 2. Roll Call. 3. Caltrain Station discussion. 4. Study Session: review and provision of direction related to Proposed Five (5) year Sewer Rate Increase Plan. 5. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code § 54956.8) Property under negotiation: City Owned Property at Oyster Point Marina (APN #'s 015-010-240, 015-010-260, 015-010-270, 015-010-500, 015- 010-600, 015-010-630, 015-190-170, 015-190-190) Agency negotiator: Marty Van Duyn. Negotiating Parties: City of South San Francisco, South San Francisco Redevelopment Agency, and Oyster Point Ventures, LLC. i 6. Adjournment. (; \ Krista artinelli-Larson ~- ~-• ity Clerk Staff Report DATE: April 15, 2009 TO: Honorable Mayor and City Council FROM: Terry White, Director of Public Works SUBJECT: Caltrain Station RECOMMENDATION It is recommended that the City Council discuss the proposed changes to the schedule for the design and construction of the new South San Francisco Caltrain Station and provide direction to staff. BACKGROUND/DISCUSSION _ _ __ The Peninsula Corridor Joint Powers Board (JPB), the California Department of Transportation (Caltrans), and the City of South San Francisco (SSF) have been collaborating on a joint project to construct a new Caltrain Station in South San Francisco. The new station will include an entry plaza at the intersection of Airport Boulevard and Grand Avenue. A pedestrian underpass will connect the entry plaza with the center boarding platform and the Executive Drive shuttle area. Caltrans, the JPB and the City have executed a Cooperative Agreement and Maintenance Agreement that allocates responsibility for construction of the Project and maintenance of improvements. Pursuant to the agreements executed above, the City has been negotiating the purchase of the Caltrans Maintenance facility with Caltrans for the entry plaza to the station. These negotiations also included an airspace lease of the property under Highway 101 to accommodate the "underpass" construction that will connect the entry plaza with the center boarding platform and the Executive Drive shuttle area. Furthermore, the City has reached agreement with Comfort Suites for the purchase of property at the intersection of Grand Ave and Executive Drive as well as with Boston Properties to transfer the properties encompassing Executive Drive and Corporate Drive right of way. As part of the City's responsibility, we are in the process of demolishing the old Caltrans maintenance facility at 296 Airport Boulevard as well as completing the environmental investigation. for hazardous material remediation at the site. Staff Report Subject: Caltrain Station Page 2 of 2 The plans and specifications for the station are 90% complete and construction of the station is planned to start in late 2009 and completed within 2 years. However, JPB has just notified the City that it would only be able to construct the underpass without relocating/constructing the new platform. This underpass would connect the east and west side of the freeway without any connection to the station platform. This is because JPB has been unable to reach an agreement with Union Pacific (UP) for the relocation of train tracks and the future need for redesign of tracks due to High Speed Rail (HSR). The construction of the underpass without relocating the platform would only be cause for nuisance and a maintenance issue for the City. Station passengers would continue to access the existing station without any additional amenities, connectivity, safety or access to downtown. It could be several years before JPB can redesign the tracks for HSR, conclude the negotiations with UP and construct the platform with connections to the underpass. Mr. Ian McAvoy, Chief Development Officer for Caltrain, will be available at the study session to discuss the schedule impact from Union Pacific and High Speed Rail Authority and respond to council questions. FUNDING This project is partially included in the City of South San Francisco's 2008-2009 Capital Improvement Program (CIP) for right of way acquisition and a portion of the City's share of construction upgrades. The remaining portion of the work is to be funded through additional appropriations in the 2009- 2010 CIP due to be approved by Council in late June. CONCLUSION After reviewing the status for design and construction of the SSF Caltrain Station and discussion with Mr. Ian McAvoy, Chief Development Officer for Caltrain, Council will provide direction for staff to proceed. ~.. By: Terry ite Director of Public Works Approve ~ : ~ ~ '~ a .Nagel City Manager ~°~~x ~~~ 0 n ~. y J O c'~LIFOR~1~ Staff Rebort DATE: April 15, 2009 TO: Honorable Mayor and City Council FROM: Terry White, Director of Public Works Jim Steele, Finance Director SUBJECT: PROPOSED FIVE YEAR SEWER RATE INCREASE PLAN RECOMMENDATION It is recommended that the City Council review and discuss the proposed revisions to the sewer service rates for Fiscal Years (FY) 2009-10 through 2013-14 as requested by Council at the March 25, 2009 study session, and provide direction to staffwho will then prepare the necessary noticing for a public hearing in June, in compliance with Proposition 218. BACKGROUND/DISCUSSION At its March 2S, 2009 study session, staff presented Council with several scenarios of rate increases to fund the -ever growing sewer fund debt service, maintain proper care of the treatment plant and collection system infrastructure, and ongoing operational costs. Staff also presented for discussion the potential environmental upgrades that could be mandated by the State Water Board within the current five year National Pollution Discharge Elimination System (NPDES) permit. Rates were last reviewed in accordance with the requirements of Proposition 218 in 2004. Council elected to put in place an increase of 2S% for sewer service for the 2004-2005 fiscal year, and then annual increases of up to 9% each year for FY 2005/06 through FY 2008/09, all of which were implemented. As was discussed, past improvements to the plant have taken place along with numerous wet weather projects to satisfy the Water Board's Cease and Desist Order (CDO) issued to the City in 1997. The CDO gave the City ten years to comply and the City met that goal but at a cost of nearly $7S million. The City has been issued a new NPDES permit by the Water Board which establishes new criteria for plant operations over the next five years. These requirements and routine plant operations require new funding. The rebuilding of three digesters, outfall line repair, and miscellaneous projects are part of normal maintenance activities. Upgrading the cogeneration facility, installation of solar systems, and construction of a recycled water generating facility are optional plans but Council has indicated they are good investments. These items were factored into the rates reviewed by Council at the study session. While Council recognizes the condition of certain components of the plant; understands the need to find alternative energy sources, and the need to pursue recycled water capabilities, they also are very aware of the economic climate and do not Staff Report Subject: PROPOSED SEWER RATE INCREASI? Page 2 of 3 wish to increase rates beyond what is essential and necessary. Consequently, Council instructed staff to "flatten out" the proposed Option II of an increase plan which would see 20% in year 1, 10% in year 2, 5% in year 3, and 0% in years 3 and 4 as outlined below. Option II includes the following improvements which are extremely vital; 1. Outfall repair costs totaling $400,000; 2. Reliability improvements to the aging Plant. These improvements are needed for components of the Plant which are quite old, and which were not upgraded during the plant upgrades over the past decade. These include such items as replacement of three (3) digesters, retrofitting grit basins, and replacing the main emergency generators at a cost totaling $25 million. 3. Seismic upgrades to the Plant, totaling $500,000; and These items which are not required but Council has indicated are good environmental investments; 4. Green technology improvements which include installing new solar and wind energy, and expanding the cogeneration capabilities of the plant to save additional energy. These improvements would result in energy savings over time, and would help reduce the City's carbon footprint. $5 million total costs (net of grants and rebates). 5. Cost for installing a Recycled Water Treatment and Transmission Facility in partnership with the San Francisco PUC, and potentially Cal Water and the City of San Bruno. This facility would only be triggered once cost sharing agreements are reached with at least the PUC, and staff will come back to Council at that trigger point. $5 million is our total cost commitment. Option II 2009-10 2010-11 2011-12 2012-13 2013-14 Rate Increase Needed 20% 10% 5% 0% 0% After further review of the cash flow projections and the timing of such improvements, staff has worked to bring down the front end costs by spreading them across the five year plan and increasing the reliance on debt financing. The debt financing has been increased by approximately $3.5 million from $29 million to $32.5 million. The total cost to construct the improvements remain the same, however, the timing for construction is staggered. Some risk is assumed by deferring replacement of critical components of the plant, however, staff feels these are reasonable risks and will give Council a flatter rate increase schedule to service the debt and fund ongoing operational costs. Staff Report Subject: PROPOSED SEWER RATE INCREASI? Page 3 of 3 The revised rate proposal is as follows: Option II 2009-10 2010-11 2011-12 2012-13 2013-14 (Revised) Rate Increase Needed 10% 10% 8% 8% 7% Council also inquired as to the rate structure (Dynamic Pricing) for residential customers being tied to water volume consumption rather than an annual flat rate. Commercial rate payers follow this structure and if the residential payers were handled the same way, a cost per hundred cubic feet, (HCF) would be established and calculated against their water meter numbers obtained by California Water service in the previous year. The calculations would be done and sent to the County Assessor for inclusion into the next year's assessment. Staff contacted three other cities (Daly City, San Bruno, and San Mateo) to inquire about their residential pricing schedule. It is common for winter water usage to be averaged per residential unit (to net out the effects of irrigation), with a sewer rate set based on the average of water usage in those months. Unlike those three cities, the City of South San Francisco has no garbage or water utility billing system in place, that is, has no database of customers linked to consumption, and also has no utility billing staff. Given the time involved in requesting/obtaining the data and processing it, insufficient time exists to follow this option and meet the Proposition 218 deadlines for this year's rate process. Staff will run examples of random properties and the associated costs involved to perform this work for Council's future consideration. CONCLUSION City staff has continued to work with the financial forecast model for the Sewer Fund, taking into consideration ongoing operational costs and new CIP prof ects that should be undertaken. Based on Council direction, this evaluation was considered and staff feels is workable. Therefore, staff recommends that a new five year plan of rate increases be authorized by the Council for the 2009- 10through 2013-14 fiscal years reflecting this modified structure. Council direction on this rate is necessary so work can begin on the documents needed to notify to all ratepayers in advance of a public hearing in June, in compliance with Proposition 218. By: ~ . Approve : ~ • ~ .~,-r Terry hite M. Nage ~/ Director of Public Works City Manager Attachments: Timeline for Proposition 218 noticing Projected Residential Survey PowerPoint presentation Timeline for Actions Needed for 2009-10 Rate Increase for Compliance with Proposition 218: Last date availabe for review/action Final Decision on Rates Needed From Council (Approval of Resolution Authorizing a 5 year Rate program, with final Not to Exceed Rates per year) Final Draft of Notices, including explanation, program details, rates, protest procedures, and date of public hearing Notices Mailed along with Proposed Rates for 5 Years to All Sewer Ratepayers 22-Apr 4-May 8-May 45 day noticing requirement Public Hearing, Formal Protest Vote Tabulation at Council Meeting: 24-J u n Update property/parcel database records for property tax bills, due to County on 8-Jul First Bond Sale Needed: July 2010 -September 2010 Est.$6 million for Required Plant Reliability Improvements -1- PROJECTED RESIDENTIAL SURVEY SEWER SERVICE CHARGE SAN MATED COUNTY (AS OF MARCH 2009) TREATING 65 UNITS OF WATER A YEAR AGENCY PROJECTED COSTS IN FY 09/10 MONTARA SANITARY DIST. $1905 HILLSBOROUGH $1563 HALF MOON BAY $939 PACIFICA $618 BURLINGAME $538 BRISBANE $535 SAN CARLOS $525* SAN BRUNO $518 FOSTER CITY $492* REDWOOD CITY $492* MILLBRAE $455 BELMONT $441 SOUTH SAN FRANCISCO $422* (with proposed 10% increase) MENLO PARK $400* SOUTH SAN FRANCISCO $384 (Current Charge) DALY CITY $315 EL GRANADA SANITARY $314* SAN MATED $293 AVG $625 *Flat charge per year not tied to individual water consumption. Other listed rates are annual estimates based on homeowners "average" monthly domestic water consumption charges that can vary from year to year, household to household. (1 unit equals 748 gallons.) -2-