North Marin Water District*

Impact, connection, and capacity fees vary considerably throughout the County and such fees can be a disincentive to homeowners considering ADU development. Statement: North Marin Water District ("NMWD") has been asked to respond to Finding F-7 stated above and listed on of the Report. The Report incorrectly refers to NMWD's Facility Reserve Charge (FRC) and any associated charges for new service1 as an "Impact Fee". NMWD does not charge "impact fees," but rather charges "connection fees" and "capacity charges" - as respectively defined in subdivisions (b)(2) & (b)(5) and (b)(3) of Government Code section 66013. Subdivision (f)(3)(B) of Government Code section 65852.2 clarifies that there is a distinction between "impact fees" and the "connection fees" and "capacity charges" that NMWD charges. It is not clear to NMWD that it's capacity charge or connection fees are a direct disincentive to homeowners considering ADU development. The Report doesn't address whether the NMWD FRC in particular is any more or less a cost factor than any other cost associated with construction, including for example the cost of the roofing or the foundation of the structure (all of which are critical for habitation); or for that matter what PG&E may charge for a new electrical or gas service to the ADU, also critical for habitation but also not addressed in the Report. More importantly, NMWD does not monitor "impact fees" and thus cannot comment about whether they vary considerably or not, within Marin County or in the greater Bay Area. The Report doesn't mention that NMWD has two distinct water service areas, and the FRC for NMWD's West Marin Service Area is $5,580. The Report seems to focus only on NMWD's Novato Service Area. Table 3 of the Report notes that the charges imposed by Novato Sanitary Agency are in line with NMWD's water FRC. However, the "connection fees" and "capacity charges" charged by other entities are legally irrelevant to those charged by NMWD, which are required by law to be based on facilities, water sources, usage, and other factors peculiar to NMWD. Further, those fees and charges are tightly constrained by Government Code section 66013 and by Proposition 26 (enacting a new § 1(e) in article XIIC of the California Constitution) as well as Government Code section 65852.2 and are required by state constitutional law to be proportional to the "burdens on, or benefits received from, the governmental activity," here water service. (Newhall County Water District v. Castaic Lake Water Agency (2016) 243 Cal.App.4th 1430, 1441 (citing § 1(e) in article XIIIC of the California Constitution).) NMWD does, however, periodically survey the "capacity charges" levied by other agencies for informational purposes. The most recent survey was performed in November 2022 in connection with the updating of NMWD's "capacity charges" to conform to current law. That survey revealed that there are indeed variations among the "capacity charges" charged by other entities in Marin County and 1 See NMWD Regulation 1 - https://nmwd.com/wp-content/uploads/2022/12/Reg-01-12.6.22-final.pdf Page | 2 elsewhere in the Bay Area. Although NMWD was not asked to respond to Finding F-8, it does want to point out that it updated its Regulation 1 in December 2022 to fully "conform with current California ADU laws."