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Staff Report PREPARED BY: MATT MORLEY Parks and Public Works Director Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 05/07/2019 ITEM NO: 8 DATE: APRIL 26, 2019 TO: MAYOR AND TOWN COUNCIL FROM: LAUREL PREVETTI, TOWN MANAGER SUBJECT: CONTINUED COLLECTION OF STORM SEWER PROPERTY-RELATED FEE A. ADOPT A RESOLUTION AUTHORIZING THE WEST VALLEY CLEAN WATER AUTHORITY (JPA) TO TAKE OVER THE COLLECTION OF THE STORM SEWER PROPERTY-RELATED FEE THAT HAS BEEN COLLECTED BY THE WEST VALLEY SANITATION DISTRICT ON THE SANTA CLARA COUNTY ANNUAL PROPERTY TAX ROLL SINCE 1992. B. DIRECT THE TOWN MANAGER, OR HIS OR HER DESIGNEE, TO WORK WITH THE JPA TO TRANSFER TO THE JPA THE COLLECTION DUTIES FOR THE PROPERTY-RELATED FEE. RECOMMENDATION: 1. Adopt a resolution (Attachment 1) authorizing the West Valley Clean Water Authority (JPA) to take over the collection of the storm sewer property-related fee that has been collected by the West Valley Sanitation District on the Santa Clara County annual property tax roll since 1992. 2. Direct the Town Manager, or his or her designee, to work with the JPA to transfer to the JPA the collection duties for the property-related fee. BACKGROUND: In 1992, the cities of Campbell, Monte Sereno and the Town of Los Gatos entered into agreements (Attachment 2) with the West Valley Sanitation District (District) to provide stormwater management and sewer maintenance services in order to comply with state National Pollutant Discharge Eliminations System (NPDES) permit requirements. Subsequently, the District created the West Valley Clean Water Program (Program) to provide consolidated stormwater program services to the West Valley communities. Since 1992, these municipalities have, in conjunction with the District, levied and collected a property-related storm sewer fee PAGE 2 OF 3 SUBJECT: CONTINUED COLLECTION OF STORM SEWER PROPERTY-RELATED FEE DATE: APRIL 26, 2019 S:\COUNCIL REPORTS\2019\05-07-19\Storm Sewer Property Related Fees\Staff Report.docx 5/1/2019 10:28 AM BACKGROUND (continued): on Santa Clara County’s annual property tax roll to finance their participation in the Program. The fees have not changed since 1994-95. In 1994, the City of Saratoga joined the Program, but it did not join the other municipalities in having the District collect a fee on its behalf. In 2017, the District decided to withdraw from future participation of the Program effective July 1, 2020. In March 2018, Campbell, Monte Sereno, Los Gatos, and Saratoga formed a Joint Powers Authority, the West Valley Clean Water Program Authority (JPA), to take over the functions of the Program that had been handled by the District. The agreement adopted by the municipalities to form the JPA, gave the JPA the power to collect fees and charges to support the program. DISCUSSION: Since 1992, the District has collected payment for the sanitary sewer service and use charges and storm sewer service charges by placing property-related fees on the Santa Clara County (County) property tax roll. These fees appear as a single line item entitled "SEWER SANI/STORM" on each County property tax bill and are collected by the County Tax Collector. To have the JPA take over the collection of the fees, the Town needs to adopt a resolution authorizing the JPA to take over the collection of its fee. If adopted, the JPA will assume the collection duties that the District has provided since 1992, including the following steps annually: • Prepare a list of all parcels that receive storm sewer service and the fee to be applied for each parcel for the upcoming fiscal year. • Hold the required public hearing to consider adoption of a resolution authorizing the property-related fees to be placed on property tax roll. • Submit the annual enrollment data to the County to be placed on the County tax roll. For property owners, the charge would appear separate from the District’s sanitary sewer charges on the property tax bill as a new line item titled “STORM SEWER.” The aggregate of the Storm Sewer and the Sanitary Sewer charges would equal the current assessment, meaning there are no increases to the fee from this proposed action. Upon receipt of the revenue each year from the County, the JPA will reimburse itself for its operating costs as approved by the Board in the adoption of its annual operating budget and remit any balance to the Town to fund storm drain operation and maintenance activities conducted at the municipal level. PAGE 3 OF 3 SUBJECT: CONTINUED COLLECTION OF STORM SEWER PROPERTY-RELATED FEE DATE: APRIL 26, 2019 S:\COUNCIL REPORTS\2019\05-07-19\Storm Sewer Property Related Fees\Staff Report.docx 5/1/2019 10:28 AM CONCLUSION: The continued collection of the Town’s property-related fee is essential to the continuation of the JPA. The District’s sunset date for the collection of the fee is Fiscal Year 2019 -20, with final revenue allocation in July 2020. Approval of the staff recommendation is an administrative action that will allow the Authority to take over the collection of the storm sewer fee that the District has collected on behalf of the cities for the past 26 years. ALTERNATIVES: The Town could choose to collect the fees on its own and make payments to the JPA for services. Staff does not recommend this option as centralizing the function across three cities creates efficiencies and the funds flow directly to where they are utilized. COORDINATION: This recommendation has been coordinated with the cities of Campbell and Monte Sereno. Adoption of resolutions authorizing the West Valley Clean Water Authority (JPA) to collect the same storm sewer property-related fee will be considered by the City of Campbell and Monte Sereno City Councils in early May 2019. FISCAL IMPACT: This action will authorize the JPA to impose and collect the fee on behalf of the Town. The total amount of the fee from Los Gatos property owners for FY 2019/20 is approximately $354,000, which will be used to fund services related to the Town’s stormwater management and storm sewer maintenance program, and to meet NPDES permit requirements. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachments: 1. A Resolution of the Town Council of the Town of Los Gatos Authorizing the West Valley Clean Water Program Authority to Collect the Storm Water Fee on Behalf of the Town of Los Gatos to Continue the West Valley Clean Water Program 2. Agreement Between the Town of Los Gatos and the West Valley Sanitation District Regrading Implementation of a Stormwater Management Program, 1992