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CC Resolution No. 20-089 Approving the Renewal and Collection of the Existing Storm Drain Fee with no Increase in Rates for Fiscal Year 2020-2021RESOLUTION NO. 20‐089    A RESOLUTION OF THE CUPERTINO CITY COUNCIL  APPROVING THE RENEWAL AND COLLECTION OF THE EXISTING  STORM DRAIN FEE WITH NO INCREASE IN RATES FOR FISCAL YEAR  2020‐2021     WHEREAS, the City Council of the City of Cupertino enacted Municipal  Code Chapter 3.36 to meet the requirements of the federally mandated Stormwater  Pollution Prevention and Management Program, federal regulations, and the  City’s National Pollution Discharge Elimination System (NPDES) permit and  establishing the authority for imposing and charging a storm drainage service  charge (“storm drain fee” or “fee”); and     WHEREAS, Municipal Code Chapter 9.18 provides regulations and gives  legal effect to the Municipal Regional Permit issued to the City and assures  ongoing compliance with the most recent version of the City’s NPDES permit  regarding the effect of urban stormwater runoff on the ability of the City’s storm  drain system to comply with federal and state laws; and     WHEREAS, in 1992 the City adopted a storm drain fee based on the City’s  Master Storm Drain Study runoff coefficients and average area of impervious  surface per acre based on the type of land use of each parcel; 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  June 17, 2020; and    WHEREAS, the report was available for public inspection and review  twenty (20) days prior to this public hearing; and    WHEREAS, the City Council of the City of Cupertino finds and determines  as follows:    1. After considering the “Engineer’s Report, Assessment of Fees for Storm  Drainage Purposes Nonpoint Source Pollution Program,” attached hereto as  Resolution No. 20‐089     Page 2    Exhibit A and incorporated herein, and the testimony received at this public  hearing, the City Council hereby approves the report.    2. There is a need in the City to continue collecting a storm drain fee to cover  the costs of federal and state requirements, as heretofore described, in that  properties within the City will not otherwise contribute a portion of costs toward  this program and without the availability of such storm drain fee, the City’s  general fund will further be negatively impacted in such a manner as to jeopardize  other essential services.    3. 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 that are to be charged this fee. These relationships or nexus are  described in more detail in the above‐referenced Engineer’s Report.    4. The amounts of the fee for each category of property, as set forth below, are  reasonable amounts, because the fee is based on the percent of impervious area  established in the Master Plan, City of Cupertino Storm Drainage System and are  below the amount needed to recover the cost of storm drainage services.    5. It is further determined that each and every parcel of land to which the fee  applies will, and has received, a benefit of flood control from the storm drainage  system and that the fees imposed herein on each such parcel are in conformity  with, and in fact lower than, the benefits that such parcel has received as further  described in the report.    NOW, THEREFORE, BE IT RESOLVED, by the City Council, that:    1. The City Council exercises its independent judgment and finds that this  Resolution does not constitute a project under the requirements of the California  Quality Act of 1970and the State CEQA Guidelines (collectively, “CEQA”) because  it has no potential for resulting in physical change in the environment, either  directly or indirectly. In the event that this Resolution is found to be a project  under CEQA, it is subject to the exemption contained in CEQA Guidelines section  15061(b)(3) because it can be seen with certainty that there is no possibility that  continued collection of an existing fee, with no change in use of the fee, may have  a significant effect on the environment.  In this circumstance, the Resolution  Resolution No. 20‐089     Page 3    continuing to charge the storm drain fee would have no effect on the environment  because it does not involve any change in an existing City program.      2. Charge. The storm drain fee shall continue to be charged to each parcel  within the City, unless exempt, to contribute to the costs of the City’s federal and  state requirements for Nonpoint Source Control and a Stormwater Management  Program.    3. Use of Revenue. The revenue derived from said fee shall be used in  connection with implementing and enforcing Chapters 3.36 of the Cupertino  Municipal Code titled “Storm Drainage Service Charge” and Chapter 9.18 titled  “Stormwater Pollution Prevention and Watershed Protection.”    4. Schedule of Charges.    a. Annual fees for each category of property will be assessed and collected as  follows:    Residential premises  $ 12.00/parcel  Apartment premises  $144.00/acre  Commercial/Industrial premises  $144.00/acre   Unimproved/Recreational  $ 36.00/acre    b. The following public properties are exempt from, and shall not be assessed  the environmental fee:    Cupertino Sanitary District  Santa Clara County  Santa Clara Valley Water District  Southern Pacific Transportation Company  State of California  The Santa Clara County Fire Department  The City of Cupertino  The Cupertino Union School District  The Foothill‐De Anza Community College District  The Fremont Union High School District  The MidPeninsula Regional Open Space District  Resolution No. 20‐089 Page 4  United States of America  5.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 7th day of July, 2020, by the following vote:  Vote  Members of the City Council  AYES:  Scharf, Paul, Chao, Sinks, Willey  NOES: None  ABSENT: None  ABSTAIN: None  SIGNED:  ___________________            ________  Steven Scharf, Mayor  City of Cupertino   _________________________              Date  ATTEST:           _________________________________  Kirsten Squarcia, City Clerk  _________________________              Date  7/29/2020 7/29/2020 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 ha s 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. The State 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) with additional requirements that became effective on January 1, 2016. MRP 2 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. 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. MRP 2 includes several mandated requirements that are being phased in over the five-year permit term. The SCVURPPP has increased its co-permittee membership assessments to help meet these requirements. In fiscal year 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 more than 2000 drain inlets, 146 of which are fitted with full trash capture devices, and 90 miles of storm drainage pipes. Maintenance of these assets includes twice per year cleaning of inlets and trash capture devices and protects the city from flooding while preventing stormwater pollution. The budget for FY 2020-2021 includes those ongoing enhancements along with increased allocations of staff time to more accurately reflect time spent on stormwater pollution prevention tasks B. Estimated Expenditures The total estimated (amended) budget to implement the required programs described above for fiscal year 2019-2020 was approximately $1,714,869. The breakdown of budgeted expenses and actual expenses for the partial fiscal year are estimated as follows: FY 19-20 Amended Budget FY 19-20 Actuals 7/1/2019 - 6/17/2020 Staffing $ 535,826.00 $ 528,196.85 Materials $ 42,696.00 $ 32,248.97 Contract Services $ 944,217.00 $ 468,730.28 Allocations & Contingencies $ 144,424.00 $ 88,521.75 Cost Share Programs $ 47,706.00 $ 828.72 Total $ 1,714,869.00 $ 1,118,526.57 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 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 Ordinance Revisions Database Maintenance Illegal Discharge Complaint Investigation and Enforcement Industrial/Commercial Discharger Inspection Program 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 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 Contingencies and 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 2019-2020 tax roll and direct-billed, the revenue from the two fees will total $1,477,387. 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 2019-2020 tax roll totals $372,741. Those fees were applied to 15,911 single-family residential parcels, 378 commercial parcels, and 236 parcels in other categories (office, institutional, school park, vacant, etc.). Each parcel was identified and a fee established in a separate report submitted to the County entitled Certification of Special Assessment Annual Enrollment. 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 anlysis of % 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 2019-2020 tax rolls totalled $1,005,692.84. Those fees were applied to 15,911 single-family residential parcels, 492 commercial parcels, and 115 parcels in other categories (office, institutional, school park, vacant, etc.). Fees billed directly to parcel-owners that do not receive property tax bills (such as schools and government) totaled $98,952.98 applied to 88 parcels. The total revenue from the Clean Water and Storm Protection fee for 2019- 2020 is $1,104,646. D. Annual Review The Clean Water and Storm Protection Fee included annual review requirements beginning with fiscal year 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 during the partial year since the new fee was adopted were less than budgeted and it is anticipated that by the end of fiscal year 2019-2020, expenses will not have exceeded revenues and no increase is recommended. Several factors contributed to coming in under budget and below the revenue amount that are not reflective of the ongoing cost of the program. Most significantly, staffing allocations needed to be adjusted to accurately reflect the workload, and those allocations will go into effect in fiscal year 2020-2021. Additionally, the program was understaffed for a portion of the year, creek education field trips that were planned for the spring were cancelled due to COVID-19 so busing expense moneys went unspent, and a project to enhance the creek education curriculum was delayed due to COVID-19 as well. The adopted budget for fiscal year 2020-2021 anticipates full staffing and full use of funds that will exceed projected revenues, coming in at $1,815,092, so any fund balance realized in the current fiscal year will be needed to meet expenses in the next. A full year of expenses and revenues for the Nonpoint Source Program will be examined by external auditors and reviewed by the City’s Audit Committee in advance of the 2021-2022 fee renewal process. ____________________________ Roger Lee Director of Public Works