Ordinance 2009-02
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ORDINANCE NO. 2009- 02
AN ORDINANCE OF THE CITY OF GILROY AMENDING
CHAPTER 19, ARTICLE VIII, OF THE GILROY CITY CODE
PERTAINING TO DAILY SEWER USE ALLOCATIONS AND
SEWER OVERUSE PENALTIES.
WHEREAS, regulation of daily sewer use allocation contracts for new commercial or
industrial construction; calculation of daily sewer use allocations for existing parcels of real
property, and rules setting forth amounts to be paid for additional allocations to such parcels of
real property are reasonable terms and conditions related to daily allocation for sewer use as set
forth in the above-referenced sections of the City Code; and
WHEREAS, on September 15, 1986, the City of Gilroy enacted ordinance 86-17, which
created the sewer overuse ordinance set forth in Chapter 19, Article VIII, of the Gilroy
Municipal Code, in order that effective control of sewer use could be pursued in the City of
Gilroy; and
WHEREAS, the City has determined that said ordinance requires revision.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GILROY DOES
ORDAIN AS FOLLOWS:
SECTION I. Chapter 19, Article VIII, of the Gilroy City Code is amended, in its
entirety, to read as follows:
CHAPTER 19
ARTICLE VIII. DAILY SEWER ALLOCATION AND OVERUSE PENAL TIES
Sec. 19.115. Daily Sewer Use Allocation.
(a) In accordance with the terms of this Chapter 19, the city shall calculate a daily
sewer use allocation for: (i) existing parcels of commercial and industrial real property that have
a connection to municipal sewer service but do not have an existing sewer use allocation; (ii)
existing parcels of commercial and industrial property that have existing sewer use allocations,
which allocations were not imposed on such parcels as part of, or in conjunction with,
agreements related to development or improvement of the parcels; and (iii) parcels of real
property for which the city receives applications for new commercial and/or industrial
development or uses as well as increased sewer capacity allocation.
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(b) A daily sewer use allocation for any parcel of real property shall be purchased
from city at such cost and on such terms and conditions as may be established from time to time
by city council resolution.
(c) Upon receipt of an application for a daily sewer use allocation for new
development on a parcel of real property, or for increased sewer use for an existing development
on such a parcel, the city may require an applicant for purchase of a daily sewer use allocation to
provide information necessary to confirm, to the city's satisfaction, that the allocation
corresponds to the amount of sewer that occupants of the parcel are reasonably expected to use.
The city shall have the right, in its discretion, to determine whether the applicant's requested
allocation is sufficient, insufficient or excessive.
(d) Upon receipt of an application for a commercial or industrial use on a parcel of
real property that already has a connection to the municipal sewer service, but no current daily
sewer use allocation, the city shall issue a daily sewer use allocation for such parcel as further set
forth in Section 19.115 - 1. below. For any parcel with an existing connection to municipal
sewer service, existing sewer use shall be allocated at no cost. If the parcel thereafter requires an
additional sewer use allocation, such allocation shall be purchased at such cost and on such terms
and conditions as may be established from time to time by city council resolution.
(e) The city's daily sewer use allocation shall be considered an entitlement that shall
not be alienable from the parcel of real property containing such allocation. Upon subdivision of
such parcel, the sewer use allocation shall be divided proportionately among the resulting parcels
of real property based on the square footage of the land contained in each resulting parcel.
(f) Upon determination of an appropriate daily sewer use allocation for all parcels of
real property for which a new or increased allocation is sought, the city and the parcel owner
shall enter into a sewer capacity allocation agreement in a form determined by the city, in its
discretion, which agreement shall entitle the parcel owner to the daily sewer use allocation
specified therein. The city may, at its discretion, record such agreement.
Section 19.115 - 1. Calculation of Daily Sewer Use Allocation.
The daily sewer use allocation of any parcel of real property shall be based on the
parcel's peak daily general use.
For purposes of this Chapter: "daily general use" shall be defined as the parcel's average,
daily consumption of water excluding water used for irrigation; and "peak daily general use"
shall be defined as the parcel's highest, average, daily consumption of water, excluding water
used for irrigation, in the four (4) consecutive billing periods commencing with the November
billing period within the preceding thirty-six (36) months. For purposes of this Section 19.115-
1., a billing period shall be ascribed to November if any of the meters on that parcel measures at
least fifty percent (50%) of the completed calendar days in November. Peak daily general use
shall not be calculated based on any billing period during which the parcel experienced water use
in excess of fifty-percent (50%) greater than the average water use billed during the same month
for the preceding three (3) years because of a water leak or other abnormal occurrence that is not
likely to reoccur regularly. If water use for both irrigation and general uses are measured by the
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same meter, the city shall make a reasonable estimate of the amount of such water that is likely
to have been used for general use during that period.
The city may reduce the peak daily sewer use allocation if it determines, based on
evidence regarding the proposed or actual use of the parcel, that sewer use on the parcel will not
be substantially equivalent to water use for non-irrigation purposes on the parcel. In such event,
the city may set the peak daily sewer use allocation to reflect the amount of sewer capacity that
city reasonably determines will be used by the parcel.
Section 19.115 - 2. Appeal of Daily Sewer Use Allocation.
If a parcel owner disagrees with the city's proposed daily sewer use allocation or any
action taken by the city increasing or decreasing such allocation, such parcel owner shall have
the right to appeal such action(s). Any such appeal shall be made no later than thirty (30) days
after the city's mailing to the parcel owner of notice thereof pursuant to procedures adopted by
the city from time to time. The appeal shall be in writing and shall provide the city with written
evidence sufficient to prove to the reasonable satisfaction of the city engineer, or his/her
designee, that the proposed daily sewer use allocation does not reasonably reflect the parcel's
expected sewer use.
Sec. 19.116. Permissible Sewer Use/ Calculation of Daily Sewer Use.
Sewer use shall be limited to the daily sewer use allocation. After establishment of a
daily sewer use allocation for a particular parcel of real property, the city shall monitor sewer use
of such property through water meter readings, unless another method of sewer use calculation is
requested by the owner of the real property and approved by City (in its discretion) in writing.
F or purposes of this Section 19.116, a parcel's daily sewer use shall be computed by
dividing the parcel's daily general use, by the number of days in that billing period.
Sec. 19.117. Underuse.
If a parcel's daily sewer use, as determined by the city pursuant to Section 19.117-1(b)
below, is consistently less than the daily sewer use allocation, the city may provide the parcel
owner written notification of such underuse. The parcel owner may offer to sell the excess
allocation back to the city at the price originally paid for such allocation or, except as set forth in
Section 19.117, retain that amount for growth or expansion. The city shall have no obligation,
however, to purchase such excess allocation from the parcel owner.
Section 19.117 - 1. Recission of Daily Sewer Use Allocation Due to Underuse.
(a) Notwithstanding the provisions of Section 19.117, no earlier than ninety (90) days
and no later than one (1) year after the city's mailing of a notification of un de ruse as set forth in
Section 19.117, the city shall be entitled, in its discretion, to rescind all or a part of the daily
sewer use allocation to a parcel if the parcel's daily sewer use is consistently underused as
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further set forth in subsection (b) below. Any such reClSSlon shall be In writing and
accomplished in the manner set forth in subsection (c) below.
If the city had granted the parcel all or any part of its existing daily sewer use allocation
at no cost (either as an existing use pursuant to Section 19 .115( d), through a fee waiver or
otherwise), the city shall be entitled to rescind, in its discretion, such part of its daily sewer use
allocation as was provided at no cost without repayment to the owner of the parcel on the date of
such allocation. If the city rescinds any daily sewer use allocation for which the parcel owner
was charged, the city shall pay the parcel owner the current value of the allocation as determined
by the current cost for such allocation charged to parcel owners. For purposes of this Section,
any daily sewer use allocation that was granted at no cost shall be considered the fust allocation
that is rescinded by the City; the City shall not be required to reimburse the parcel owner for lost
daily sewer use allocation until the amount of daily sewer use allocation that was granted at no
cost has been fully rescinded.
(b) F or purposes of this Section 19.117 - 1, a parcel's daily sewer use allocation shall
be considered consistently underused if the average daily sewer use by such parcel in the thirty-
six (36) billing periods prior to the notice of recission is below the existing allocation. The daily
sewer use allocation shall be determined as set forth in Section 19.115 - 1.
(c) The city shall provide a parcel owner with notice of recission of any portion of
such owner's daily sewer use allocation, in writing, at the address of such parcel owner set forth
in Santa Clara County Tax Records, unless the city has been provided with written notification of
a more current address. Recission of any portion of a parcel owner's daily sewer use allocation
shall take effect no earlier than sixty (60) days after the date of such notice.
(d) If a parcel owner appeals the determination of underuse pursuant to Section
19.115 - 2 and shows, to the reasonable satisfaction of the city engineer (or his/her designee) that
underuse has occurred for reasons not reasonably within the parcel owner's control, the city shall
suspend its right to rescind the parcel owner's allocation for no fewer than twelve (12) additional
billing periods. If, at the end of such suspension, the parcel continues to underutilize the
allocation, those portions of the allocation not being used by the parcel may be rescinded by the
city. In the event that recission ofthe parcel's daily sewer use allocation has been delayed due to
such suspension, the amount the city shall pay to the parcel owner in compensation for its
rescinded daily sewer use allocation shall be the amount that would have been paid at the time
the city first informed the parcel owner of its underuse.
(e) If the City finds that a parcel owner has used water specifically to retain its daily
sewer use allocation and not for any other purpose necessitated by lawful commercial or
industrial activities on the parcel, City may also rescind a daily sewer use allocation following
notice to a parcel owner as further set forth in subsection (c) above and, thereafter, disconnect
such service at city's discretion.
Sec. 19.118. Overuse.
(a) If the actual daily sewer use on a parcel of real property is greater than the daily
sewer use allocation for that parcel in any given billing period (which, for purposes of this
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Chapter, shall be referred to as the initial overuse period), the city shall provide the parcel owner
a written notice of overuse in the billing period following the initial overuse period. The notice
of overuse shall state (i) the occurrence of the sewer use in excess of the daily sewer use
allocation and (ii) the higher rates imposed pursuant to Section 19.119 for such overuse. For
purposes of this chapter, overuse shall refer to sewer use billed to a parcel which use is in excess
of that parcel's sewer use allocation.
(b) The City shall provide a parcel owner with a notice of overuse if the parcel's daily
sewer use exceeds its daily sewer use allocation three (3) times in any six (6) consecutive billing
periods, which six (6) consecutive billing periods shall be referred to in this Chapter 19 as the
overuse period. The notice of overuse shall inform the owner of a parcel of real property that the
owner's parcel has exceeded its capacity during the overuse period and that, if the parcel exceeds
its sewer use allocation for any additional billing period during the probationary period following
the overuse period, the overuse rates set forth in Section 19.119 will be applied to the parcel. For
purposes of this Chapter 19 the "probationary period" shall be defined as the twelve (12) billing
periods following the overuse period.
(c) All notices of overuse referred to in Sections 19.118(a) and (b) shall inform the
parcel owner of the owner's right to enter into a new sewer use allocation agreement to increase
amount of sewer allocated to the parcel if such additional capacity is available.
(d) If a parcel's average daily sewer use over a period of thirty-six (36) consecutive
billing periods exceeds its total sewer use allocation for that period, the City may require the
parcel owner to enter into a new sewer use allocation agreement reflecting the parcel's expected
average daily sewer use, even if such parcel does not meet the criteria for imposition of overuse
rates set forth in Section 19.119). In such event, the City shall provide the owner with a notice of
its overuse and a proposed sewer use allocation agreement reflecting the property's expected
average daily sewer use. Failure of the parcel owner to enter into such sewer use allocation
agreement shall subject the parcel to the overuse rates set forth in Section 19.119(f).
Sec. 19.119. Overuse rates.
(a) The rate charged for the first billing period in which overuse occurs during the
probationary period (as defined in Section 19.118(b)) shall be ten (10) times the highest existing
sewer use rate for that parcel. This shall be referred to in this Chapter 19 as the "lOX overuse
rate" .
(b) If the average daily sewer use is greater than the daily sewer use allocation in any
billing period after the 1 OX overuse rate is first charged, then the rate charged for the sewer use
overage shall be one hundred (100) times the highest existing sewer use rate. This shall be
referred to in this Chapter 19 as the "100X overuse rate". Except as set forth in Section
19.119(g) below, the 100X overuse rate shall be effective for any additional billing periods in
which the sewer used on the parcel exceeds its sewer use allocation.
( c) For purposes of Sections 19 .119( a) and (b), the highest existing sewer use rate for
parcels with a single meter shall be the rate charged to that meter; and for parcels with two (2) or
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more meters, the highest existing sewer use rate shall be the highest metered rate on that parcel,
except as otherwise set forth in Section 19 .119( d) below.
(d) For purposes of Sections 19.119(a) and (b), for parcels billed at a flat rate, the
highest existing sewer use rate shall be the highest rate charged for sewer in the City as set forth
in the City's most current comprehensive fee schedule.
(e) Except as set forth in Section 19.119(e), below, if the average daily sewer use is
greater than the daily sewer use allocation in any billing period after the 100X overuse rate is
charged, the city may choose (in its discretion) either to continue to charge the 100X overuse rate
for the sewer use overage or to terminate the sewer and/or water service to the parcel owner.
(f) If the Owner, through no fault of the City, fails to enter into a new sewer use
allocation agreement within sixty (60) days after receiving the notice described in Section
19 .118( d), City will be permitted to impose the 100X overuse rate, commencing in the billing
period following the expiration of such sixty (60) day notice.
(g) If, after the notice referred to in Section 19 .118(b) has been issued, to the owner
of a parcel of real property, sewer use on the parcel does not exceed the sewer use allocation for
the probationary period, City shall be required to give the parcel owner a new notice prior to
charging the lOX rate for sewer use on the parcel. If, after imposition of the 10X rate or 100X
rate on the parcel, sewer use on the parcel at any time thereafter ceases to exceed the sewer
allocation for a period of no fewer than twelve (12) consecutive months, City may not charge the
100X rate for the next incidence of sewer overuse, but rather shall be required to give the parcel
owner new notices of overuse pursuant to Section 19.118 prior to charging the 10X rate for
sewer use on the parcel. Any renewal of the overuse rates will thereafter follow the sequence of
escalating penalties set forth in Sections 19 .119( a) through (e). This section 19.119(g) shall not
apply to parcels for which City has required a new sewer use allocation contract pursuant to
Section 19.118(d).
(h) For purposes of this Section 19.119, "sewer use rate" shall be defined as the
highest base rate for sewer use charged to any meter on the parcel and the corresponding highest
tiered rate for sewer use that can be charged to that meter.
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SECTION II. All other ordinances and parts of ordinances in conflict herewith are
hereby repealed.
SECTION III. This ordinance shall take effect and be in full force thirty (30) days from
and after its adoption and approval.
PASSED AND ADOPTED this 2ND day of March, 2009 by the following vote;
AYES:
COUNCILMEMBERS:
ARELLANO, BRACCO, DILLON,
GARTMAN, TUCKER, WOODWARD and
PINHEIRO
NOES:
COUNCILMEMBERS:
NONE
ABSENT:
COUNCILMEMBERS:
NONE
APPROVED:
~-
i eiro, Mayor -'"
--
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I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Ordinance No. 2009-02 is an original ordinance, or a true copy of the original
ordinance, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council
held on the 2nd day of March, 2009, at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
of Gilroy this 4th day,; March, 2009.
wna Freels
City Clerk of the City of Gilroy
(Seal)
ORDINANCE NO. 2009-02