There were a couple of interesting items on the agenda at Wednesday’s Escondido City Council meeting. First was item 6: Authorization to enter into standardized agreements for purchase and sale of recycled water for agricultural use. Basically, this allows those farmers who wish to commit to using the recycled water, once all the systems are in place to provide that water, may sign up now, for three years, and receive potable water at the proposed rate for that recycled water, $2.70 per 1,000 gallons. After Director of Utilities Christopher McKinney made his presentation, Councilwoman Olga Diaz asked him why couldn’t this have been done earlier, as she was sure the farmers would have been more than willing, the Council had always been told that to do so would have violated state law. McKinney explained that until now, they would have been pressed to justify giving the farmers such a significantly lower rate, because, before this time, they would have had some trepidation about claiming the benefit to the city from the proposed project, because the project was too far off—not eminent enough.
The project benefits all the city’s water customers, because it eliminates the need to build an enlarged outfall pipe from the Hale Avenue Resource Recovery Facility (HARRF) out into the Pacific—an expansion that would cost billions. Also, being able to show that the city had guaranteed customers for the recycled water would make it easier to obtain loans to finance the city’s project, loans with lower interest rates, again saving all the city’s customers money.
Diaz put McKinney on the spot when she asked him about the use of the recycled water by the proposed Safari Highlands development, would they be eligible to get the discounted rate? McKinney began by saying the city utility staff was not making this recommendation for the benefit of the farmers, but what would be best for all the ratepayers. He added, that when the system was in place they would have to develop a fee schedule for various users of the recycled water, and Safari Highlands would not qualify for the agricultural rate. The item was approved by the entire council.
The other interesting item was number 7: Undergrounding in lieu fee waiver request for centerpoint 78 project ADM 13-027. Centerpointe 78 is a project, previously approved by the council, for a supermarket and fast food franchise with a drive-thru (Starbucks, maybe) project to replace the old Toyota of Escondido building, across from Lincoln school. Assistant City Engineer Homi Namdari explained that the city requires projects of over $23,800 in value to put utility lines underground if possible. If the utility lines include a 69kV line (as in this case, along Lincoln Ave.) then such undergrounding is considered infeasible. In such cases the developer is required to pay and “in lieu” fee of $457 per linear foot to the city, or 5 percent of the valuation of the project whichever is lower. In this case, the 5 percent was the lower figure—well, not so low, $240,474. City staff recommended that the council deny the request for the waiver. In their request for the waiver the developer claimed to have been unaware of the fee requirement as it was not separately listed in the city’s conditions for approval. Namdari explained that the conditions did specifically require the payment of “all applicable fees”.
The representative for the developer, Jim Simmons, repeated the complaint that the fee and its size were not known until he had already obtained financing, and though the additional cost of a $240,000 would make additional financing difficult.
Councilman Ed Gallo reasoned (using the term very loosely) that since it was infeasible to bury the 69kV line, and the line would always be above ground, and the in lieu fee would be used by the city to bury utility lines elsewhere, why should the developer have to pay?
Councilman Mike Morasco wondered why this fee wasn’t specified on the requirements, with a specific amount. City Engineer Julie Procopio explained that the city did not traditionally make a comprehensive list of all the fees in a projects requirements because the list of fees was subject to change during the approval process, and the city traditionally referred to the city’s fee schedule.
Councilman John Masson thought he remembered that the city had made some concessions in the transportation mitigation fees when the project first came before the Council. He felt that would have been the time to negotiate for lower fees.
Councilwoman Olga Diaz observed that the above ground utility lines dated the city. She wished it were possible to bury all lines, including the 69kV lines. She pointed out (perhaps for Gallo’s benefit) that burying the lines anywhere in the city, improved the city, and therefore was an ancillary benefit to any development in the city. She did find it hard to believe that a developer would miss such a substantial fee, and hoped the staff would take steps to ensure it did not happen again. She noted that the location had a great deal of traffic, including people waiting to get on the 78 in the morning—sort of a captive audience for a Starbucks.
Mayor Sam Abed was obviously in a quandary. His basic instinct is always to aid the developers, and so he put forth the idea that the council should reduce the fees by the maximum the city had previously waived, $72,500. The new City Manager Jeff Epp (previously City Attorney) pointed out that such arbitrary figures would put the city staff in a difficult position, since it would be a precedent that future developers would refer to. The council, Epp said, needed to give some rationale about why they were waiving the fee.
Morasco said he still didn’t understand how such a substantial fee wouldn’t have been pointed out to the developer. Epp said that the city staff assumed the developer would have checked the current fee schedule, and understand that all the fees so listed would need to be paid.
The staff’s recommendation to not waive the fees was approved three to two, with Gallo and Morasco dissenting. Score one for the citizens over developers, for a change.