HomeMy WebLinkAbout8.5.14 SDC Review Committee MinutesSDC Committee
August 5, 2014
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AASSHHLLAANNDD SSYYSSTTEEMM DDEEVVEELLOOPPMMEENNTT CCHHAARRGGEE ((SSDDCC)) RREEVVIIEEWW CCOOMMMMIITTTTEEEE
MMIINNUUTTEESS
August 5, 2014
CALL TO ORDER: Carlos Reichenshammer called the meeting to order at 1:07 p.m. in the Siskiyou Room, 51
Winburn Way.
Committee Members Present: Russ Silbiger, Carlos Reichenshammer, Allen Douma, and Troy Brown Jr.
Committee Members Absent: Dan Jovick, and Jac Nickels
Staff Present: Bill Molnar, Mike Faught, and Tami De Mille-Campos
Consultant Present via phone: Ray Bartlett (Financial Analyst)
Council Liaison Present: Rich Rosenthal
Faught pointed out to Bartlett that on the water SDC he has it listed at $700,000 but at Douma’s request during the
last meeting they looked it up and it is only showing $300,000 for the Water Master Plan updates (project D2).
Bartlett is going to check into that and see why there is a difference.
SEWER SDC
Bartlett explained that the cost basis for the Sewer SDC is primarily the improvement fee portion—$1.833/sq. ft. The
reimbursement fee portion is relatively small at $0.195/sq. ft.
The improvement fee is based on the Sewer Master Plan that has 3 sets of priority projects:
Priority Time Line 2012 $’s SDC qualified % Included in Update
Rate Payers
Other
1 2012 – 2020 $10,791,000 $3,263,430 30% Yes $3,263,430 $7,527,570
2 2020 – 2030 $16,713,000 $5,753,920 34% Yes $5,753,920 $10,959,080
3 Beyond 2030 $5,799,000 $5,153,000 89% No $5,799,000
Totals
$33,303,000 $14,170,350 43%
$9,017,350 $24,285,650
% 100% 43% 27% 73%
Of the $33.3 million of planned improvements about $14.2 million (43%) is attributable to expanding capacity to
accommodate growth. Because of the uncertainty of growth and the associated Priority 3 capital improvements,
these improvements were excluded from the proposed update of the SDC. This reduced the cost basis for the
improvement fee from $14.2 million to $9.0 million. The remaining $24.3 million will have to be paid by rate payers
and from the Food & Beverage Tax.
In Table 14.1 the annual debt service exceeds the expected amount of revenue from the Food & Beverage Tax in
each year of the forecast except the first year, leaving nothing to off-set the amount of the proposed SDC. The
current debt of approximately $11 million will be fully repaid in FY 2023. However, over the next five years, the City
plans to issue an additional $8 million for Priority 1 capital improvements. That leaves approximately $19.5 million of
Priority 1 and 2 projects that will be paid from additional borrowing, or from the accumulation of sewer rates, SDC,
and Food & Beverage Tax revenues. Table 14.1 ends in FY 2020 but capital improvements are schedules out
beyond 2020. These projects will require more revenue than the Food & Beverage Tax alone will produce.
Faught added if we think the SDC’s are too high the only way to adjust that is to have the rate payer pay more. What
we have now is the master plan which lines out what should be allocated to growth versus what should go to the rate
payer which is how they got to that distribution.
Douma said the allocation percentage is determined by a group of Engineers and he wonders what additional
information can they use to analyze whether they were right or wrong. Faught answered; really the only way to do
SDC Committee
August 5, 2014
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that would be to hire new Engineers to challenge the premise and that isn’t a general rule. The Engineers basically
model the system to determine the proper allocations. Douma questions what influence they have on any of this.
Faught mentioned he had told everyone to read through the master plans to see if there were any flaws but the big
question is whether we need the projects or not and these projects were vetted long before they came before this
committee. He thinks it really comes down to what are the strategies for increasing the SDC’s to meet the growth
side of it.
Faught stated he thinks Sewer is the easiest to figure out because it is primarily regulatory driven. As we grow we are
going to have to build the facilities and the proportional share for the developer is outlined in the master plan.
Silbiger/Reichenshammer m/s to recommend Council adopt the proposed sewer SDC increase.
All ayes. Motion passes.
ADJOURNMENT
Meeting adjourned at 2:18 pm
Respectfully submitted,
Tami De Mille-Campos, Administrative Assistant