ITEM:		PUBLIC HEARING
5.	CONSIDER ADOPTION OF RESOLUTION 2012-06 FOR COLLECTION OF WATER USE FEE
Meeting Date:			June 12, 2012	Budgeted:
From:			David J. Stoldt, General Manager	Program/
				Line Item No.:
Prepared By:			David J. Stoldt	Cost Estimate:
General Counsel Approval: N/A
Committee Recommendation: None
CEQA Compliance: N/A

SUMMARY: At its February 23, 2012 meeting, the Board directed staff to implement a Proposition 218 process for the development of water fees and charges, including the hiring of a rate consultant and the development of the necessary ordinances, resolutions, and notices for implementation thereof.

At its April 16, 2012 meeting the Board reviewed as an informational item two alternative draft resolutions for the collection mechanism of the proposed annual water use fee. There is a direct billing option (Exhibit 5-A) and collection by the County Assessor (Exhibit 5-B). At this time, the Board is asked to select a mechanism and adopt the appropriate resolution.

RECOMMENDATION:

The committee should review and discuss the alternate draft Resolutions for the method of collection of the proposed Water Use Fee and adopt the one that best reflects the Board’s goals of low cost, high security, and predictability of collections.

BACKGROUND:

Resolutions for the method of collection of the proposed Water Use Fee: There are two alternative resolutions for the actual fee collection mechanism: Alternative A is for bills sent directly by the District or through a third-party mailing house: Alternative B is for use of the semi-annual County Assessor’s bill, similar to what is the current practice for Carmel Area Wastewater District and the water recipients under the Castroville Seawater intrusion Project. The actual mechanism for collection will not be determined by the board until its June 12, 2012 meeting.

The primary differences appear in the collection section of each:

Direct billing allows for if the bill is not paid in full then the payment shall be delinquent and the property shall be subject to default. In such case the General Manager may (a) discontinue any or all District services or facilities for which the bill is rendered; (b) impose a basic penalty of 10 percent for each delinquent payment; (c) impose a penalty of one-half of 1 percent per month for nonpayment of the charges and the basic penalty; and (d) collect the delinquent charge and penalties as a lien upon the real property and collectible at the same time and in the same manner as taxes and assessments are so collected upon such real property in accord with District law.

Assessors billing states that the County Assessor bills shall be generated every fiscal year (July 1 through June 30) and mailed in mid-October and payment may be made in two installments, due as follows:

1st Installment - Due November 1st, Delinquent after 5:00 p.m. December 10th.

2nd Installment - Due February 1st, Delinquent after 5:00 p.m. April 10th.

If the annual water use fee required by Ordinance No. 152 remains unpaid by 5:00 p.m. on June 30th, the payment shall be declared delinquent by the County Assessor, and the property shall be subject to default.  A basic penalty of 10 percent shall be imposed for delinquent payment. A penalty of one-half of 1 percent per month shall be imposed for nonpayment of the charges and the basic penalty. Collection of the charge and penalties shall become a lien upon the real property and collectible at the same time and in the same manner as taxes and assessments are so collected upon such real property. Real property remaining in defaulted status for five or more years shall be subject to sale by the County Assessor.  Thereafter the real property may be sold at public auction or otherwise conveyed to new ownership. At such time, unpaid annual water use fees, interest and penalties shall be remitted to the District.

EXHIBITS

5-A Alternative A - Direct billing option

5-B Alternative B - Collection by the County Assessor

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