TO: Members of the Governing Board
FROM: Christopher Silke, District Engineer
REPORT BY: Annamaria Martinez, Assistant Engineer
SUBJECT: Fiscal Year 2024-2025 Availability Charge Public Hearing
RECOMMENDATION
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PUBLIC HEARING - Water/Sewer Availability Charge
Adopt a Resolution accepting the District Engineer’s report and imposing the availability (standby) charges for Fiscal Year 2024-2025 of $10 per parcel per month for water service, and $10 per parcel per month for sewer service for the Napa Berryessa Resort Improvement District (NBRID) and receive a presentation of NBRID’s operating budget forecasts and available options to address annual revenue shortfalls and State Program funding sources of prioritized capital improvement projects, subsequent to the certified Median Household Income Survey Report. (Fiscal Impact: $127,300 Revenue; NBRID Fund; Budgeted; Discretionary)
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BACKGROUND
SPECIAL ASSESSMENTS - WATER/SEWER AVAILABILITY CHARGE
Today's action is to consider any objections or protests with respect to the water and sewer availability charge for the Napa Berryessa Resort Improvement District (District). District staff recommends continuing the current availability charges for water and sewer service for next fiscal year.
The District was established by the Resort Improvement Act in the 1960’s. Due to various parcel mergers over the years, the District currently contains approximately 552 parcels and assesses a water and sewer availability charge to each parcel, whether developed or not. The availability charge is collected by the County Treasurer along with the normal property tax on each parcel. Revenues generated by these charges are appropriated through the District’s annual budget and fund the maintenance and upgrade of existing water and sewer system facilities.
The water/sewer availability charge was established in 1996 at $240 per parcel per year ($10 per parcel per month for water and $10 per parcel per month for sewer). The amount of this charge, and the parcels to which it is assessed, must be established annually by a Report of the District Engineer. The Engineer’s Report includes a listing of parcels by Assessor’s Parcel Number and the corresponding amount of the charge for Fiscal Year 2024-25. These proposed availability charges have remained unchanged since before January 1, 1997, and therefore do not need voter approval under Proposition 218.
The Engineer's Report shows a calculated revenue for the Availability Charge of $132,000, assuming that every parcel pays the amount billed on their tax bill in full and no delinquency is realized. The revenue from the Availability Charge that is budgeted in the operations and maintenance budget - totaling $127,300 - is an estimated amount that includes an approximate 4.5% delinquency rate - which matches the delinquency rate we sometimes see with water/sewer user fees.
FINANCIAL UPDATE
Since the 2008 Bureau of Reclamation Steele Park Resort closure, the District has requested and received a
total of $3,839,634 in loans from Napa County for payment of expenditures above and beyond the District’s
available fund balance until such time that a Resort development at Steele Canyon could bring a boost in
revenue to offset rising operating expenses. Following the May 2021 loan, a 15% rate increase to water and
sewer user fees was approved by customers and adopted by the Board in November 2021 with an effective date
of December 1, 2021.
The approved rate increase was not intended to solve the projected operating budget deficits, as the rate
increase required to accomplish a balanced budget through user fees was greater than the community would
approve under a Proposition 218 hearing; rather a budget overview was presented to the community and a 15%
increase was the maximum adjustment receiving majority support in the public forum. While the rate increase
did bring in additional revenue for operations, multiple equipment failures and the associated short-term rentals
needed to keep facilities operational as well as continuing critical infrastructure project needs, including
engineering services for the Pond No 2 Slide Repair Project, exceeded the rate adjusted revenue stream, and the
District is projected to deplete the remaining available fund balance from the May 2021 loan before the end of
Fiscal Year 2024-25. Unplanned operating expenses linked to old utility infrastructure failures continue to be a
budget burden. It is paramount that the District address utility asset weaknesses by implementing capital
improvements recommended by staff and to adapt facilities to climate resiliency.
A Median Household Income Survey of utility customers kicked-off in September 2023. Rural Community
Assistance Corporation (RCAC) acted on the District’s behalf mailing questionnaires and following up with
door-to-door non-respondents to collect a pool of survey data conforming to State Water Resources Control
Board, Division of Financial Assistance criteria. Income survey responses were compiled by RCAC with the
median household income (MHI) determined to be $62,000. Comparatively, the Statewide MHI sits at $91,905.
With the community posting a MHI less than 80 percent of the statewide average NBRID is eligible for grants
to fund capital improvement projects under the Clean Water and Safe Drinking Water SRF Programs.
In order to access these grants NBRID must be able to:
1. Show that all County loans has been brought to a zero balance; and
2. Submit proof of financial sustainability with sufficient revenue offsetting expenses to balance the operations
budget. District staff has annually presented to the Board options to increase revenue to match expenses for the
water and sewer utilities. Those options include:
1. An adjustment to user rates only; or,
2. A new special assessment / tax per parcel; or,
3. A hybrid approach with both revenue classes contributing to topline expansion.
Any of these options will require community approval by vote. A community meeting is scheduled for
Wednesday, May 22, 2024, at 5:30 pm. to obtain community input, and staff will return to the Board with
recommendations.
Requested Actions:
1. Open the Public Hearing to consider any objections or protests with respect to proposed water and sewer availability charges for the Napa Berryessa Resort Improvement District;
2. Close the Public Hearing and adopt a Resolution to take the following actions:
a. Accept the District Engineer’s Report for Fiscal Year 2024-25; and
b. Approve the imposition of water and sewer availability charges for Fiscal Year 2024-25; and
3. Receive Staff Report on the financial status.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
Yes |
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Where is it budgeted? |
The revenue is budgeted within the NBRID Operations Budget |
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Is it Mandatory or Discretionary? |
Discretionary |
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Is the general fund affected? |
No |
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Future fiscal impact: |
None |
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Consequences if not approved: |
The availability charge provides a necessary annual revenue source for the operating budget. Without the revenue generated by the availability charges, the District will have insufficient funds to cover operations and maintenance expenses. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.