The Seal Beach City Council voted to terminate its current agreement with the Orange County Sanitation District for collecting sewer connection charges. The city has to give notice six months in advance of terminating the agreement. Future sanitation fees will be handled the same way as other fees. (See below for details.)
This was originally a Consent Calendar item but was pulled for separate consideration.
According to the staff report by Community Development Director Alexa Smittle, the costs of the agreement outweighed the benefits.
“Sewer connection fees generally apply to new construction or significant changes in use for existing facilities. The District sets the fees, the City charges, collects, and remits those fees, and in exchange, the City retains five percent of the fees. This formula has remained unchanged since 1973,” Smittle wrote.
“Unfortunately, the process to collect and remit fees to the District is laborious and cumbersome, as is the reporting carried out on behalf of the District,” Smittle wrote.
“In reviewing fiscal years 2021-22 and 2022-23, the City processed a total of 30 connection charges, 17 remittances, and 8 quarterly reports,” Smittle wrote.
“Although the total retained fees were $4,219.85, the overall projected costs were $8,800. Additionally, the District performed an audit this year, resulting in an estimated $9,700 in City staff time necessary to respond, with no compensation,” Smittle wrote.
“As conveyed above, in practical terms, very few development projects are charged a sewer connection fee, as most of the development occurring in Seal Beach is at locations already adequately connected to the sewer system,” Smittle wrote.
“The lack of volume makes the collection and reporting process more challenging for staff as economies of scale cannot be achieved. However, this also means that terminating this agreement will have very minimal impact on the Seal Beach community,” Smittle wrote.
“Going forward, District fees will be handled in the same manner as they are handled with other agencies including the Los Alamitos School District and Orange County Fire Authority, where each agency is responsible for collection of their own fees. Community Development staff provides all applicants with a resource list of other agencies that need to be consulted on the development process, and the District will be added to that list,” Smittle wrote.
“City staff has advised District staff of tonight’s proposed action. Pursuant to the agreement, termination notice must be given to the District six months in advance, thus the District would become responsible for collection of its own fees on July 1, 2024,” Smittle wrote.
