Modesto Municipal Code Art. 9 Wastewater Treatment Capacity Allocations, Permitting and Transferability

For the purposes of this article, the following terms shall have the following meanings:

(a) Allocated Capacity.

(1) For Major Industry Users, Allocated Capacity means the "allocation level" as determined under City Council Resolution No. 2007-422 for the flows and substances listed in such resolution and any other constituents or substances for which the City imposes a limit in a User's wastewater discharge permit (including without limitation constituents referred to in Section 5-6.210, entitled Specific Pollutant Limitations (Local Limits)) (collectively, "substances").

(2) For Minor Industry Users, Allocated Capacity means the "allocation level" as determined under City Council Resolution No. 2007-422 for the flows and substances listed in such resolution and any other constituents or substances for which the City imposes a limit in a User's wastewater discharge permit (including without limitation constituents referred to in Section 5-6.210, entitled Specific Pollutant Limitations (Local Limits)) (collectively, "substances"), except that for Minor Industry Users, the years 2003-2013 will be used to determine the allocation level.

(b) Equivalent Dwelling Unit or EDU means a single-family equivalent dwelling unit based upon standardized estimated wastewater discharge characteristics of a typical single-family dwelling of two hundred ninety (290) gallons per day (gpd), two hundred (200) milligrams per liter (mg/L) of strength Five Day Biochemical Oxygen Demand (BOD), and two hundred (200) mg/L of Total Suspended Solids content (TSS) as set forth in City Council Resolution 2007-287.

(c) Industrial User has the same meaning as in Section 5-6.103.

(d) Major Industry has the same meaning as in Section 5-6.103.

(e) Minor Industry has the same meaning as in Section 5-6.103.

(f) Permitted Capacity means the amount of wastewater flows and substances that a User is entitled to discharge into the City's wastewater collection and treatment system under a valid wastewater discharge permit.

(g) Transfer, Transfer of Allocated Capacity, and Transfer Allocated Capacity mean the sale, loan, lease, or gift of Allocated Capacity to another User, another property owned by the same Industrial User or an affiliate of the same Industrial User that operates under a separate wastewater discharge permit, or the City.

(h) User has the same meaning as in Section 5-6.103 and includes Industrial User, as defined in this article.

(i) Wastewater Treatment Capacity means the entire ability of the City to legally process and discharge wastewater in accordance with the laws and regulations of the State of California. This ability is under the exclusive dominion, ownership, and control of the City and its Sewer District No. 1 as licensed providers of wastewater services to the public.

(Ord. 3655-C.S., § 1, effective 11-11-16)

The City Council of the City of Modesto finds that some Industrial Users have in the past as set forth in Modesto City Council Resolution 2007-422 been entitled through their respective wastewater discharge permits to amounts of Allocated Capacity that they regularly or for irregular but sustained periods do not use. The purpose of this article is to facilitate and to provide the conditions and procedures under which an Industrial User may keep and Transfer Allocated Capacity to other Users or from an Industrial User's own property to another property within the City's wastewater collection system for use by the same Industrial User or an entity affiliated with the same Industrial User.

(Ord. 3655-C.S., § 1, effective 11-11-16)

(a) (1)

As of January 1, 2017, a User's Permitted Capacity will be at least as much as a User's Allocated Capacity. Upon issuance to an Industrial User of a wastewater discharge permit in which Permitted Capacity is at least as much as that Industrial User's Allocated Capacity, the Industrial User shall have a right to discharge wastewater to the City's wastewater collection and treatment system up to the Industrial User's Allocated Capacity, subject to the terms of the wastewater discharge permit and applicable law.

(2) An Industrial User's right under its wastewater discharge permit and applicable law to discharge wastewater up to its Allocated Capacity shall not be limited to a particular part of the City's wastewater treatment system (i.e. primary, secondary, or tertiary treatment, or land application). If an Industrial User's wastewater discharge permit limits its discharge of wastewater to specified times of the year, Allocated Capacity permanently Transferred by the Industrial User shall not be similarly limited, unless the User receiving the Transferred Allocated Capacity is also operating under an existing discharge permit that limits the times when it may discharge wastewater. If an Industrial User's wastewater discharge permit limits its discharge of wastewater to a particular part of the wastewater system or to particular times of the year, and the Industrial User changes its use of the property such that, as reasonably determined by the City, the limitations are no longer necessary, the Industrial User shall retain its Allocated Capacity without such limitations. Nothing in the immediately preceding sentence shall relieve an Industrial User changing the use of its property from obtaining approval of a new or amended wastewater discharge permit and any other approvals required from the City or other regulatory authorities, as may be necessary.

(b) (1)

An Industrial User may Transfer Allocated Capacity, subject to the requirements of this article.

(2) Subject to the limitations in this article, an Industrial User may permanently Transfer Allocated Capacity, and if approved, the wastewater discharge permits for the properties involved in the Transfer shall reflect the change in permitted amounts of discharge for each property.

(3) The additional wastewater allowed to be discharged by the recipient of a Transfer of Allocated Capacity shall not be restricted to a particular part of the City's wastewater treatment system (i.e. primary, secondary, or tertiary treatment or land application).

(c) (1)

Upon the issuance to an Industrial User of a wastewater discharge permit in which Permitted Capacity is at least as much as that Industrial User's Allocated Capacity, the City may thereafter decrease the amount of that Industrial User's Permitted Capacity to less than the Industrial User's Allocated Capacity only for the following reasons:

(A) To meet the City's Federal or State regulatory requirements;

(B) To ensure that the wastewater collection and treatment system will operate safely and legally; or

(C) Because an Industrial User has permanently Transferred a portion of its Allocated Capacity.

(2) In the event that the City reduces an Industrial User's Permitted Capacity for reason (A) or (B) in subsection (c)(1) above, it shall make reasonable efforts to address the regulatory or system issues that necessitated the reduction in a prompt manner and shall provide written notice to the Industrial User of the reasons for the reduction.

(3) In the event that an Industrial User Transfers a portion of its Allocated Capacity to another property owned or used by the same Industrial User or an affiliate of the same Industrial User, the City may reduce the Industrial User's Permitted Capacity in the wastewater discharge permit for each property, as long as the total Permitted Capacity for each property is no less than the Industrial User's total Allocated Capacity. Notwithstanding the foregoing, in the situation described in the immediately preceding sentence, the City may reduce the Industrial User's Permitted Capacity in all of its or its affiliates' wastewater discharge permits to less than its total Allocated Capacity for reasons (A) and (B) in subsection (c)(1) above.

(4) In the event that an Industrial User permanently Transfers a portion of its Allocated Capacity to another User or to the City, the City may reduce the Industrial User's Permitted Capacity to reflect its remaining Allocated Capacity.

(Ord. 3655-C.S., § 1, effective 11-11-16)

(a) A Transfer of Allocated Capacity is limited to the area served by the City's wastewater collection and treatment system ("City's Authorized Sewer Service Area").

(b) An Industrial User seeking to Transfer Allocated Capacity shall submit an application on a form to be developed and provided by the City.

(c) No approved Transfer of Allocated Capacity may result in a property being entitled to discharge less than one thousand (1,000) gallons per day per acre into the City's wastewater system under the approved wastewater discharge permit for that property.

(d) Transfers of Allocated Capacity from one property to another property owned or used by the same Industrial User, or from an Industrial User to another User, or from an Industrial User to the City, may proceed subject to City approval of the Transfer.

(e) The City may deny a proposed Transfer if it determines that the Transfer would result in any of the following:

(1) Either the applicant or recipient User has a substantial and current wastewater discharge permit violation that is not cured within a reasonable period of time after notice of violation from the City; or

(2) A Transfer of Allocated Capacity would cause an overload and/or surcharge of the City's wastewater collection and treatment system; or

(3) A Transfer of Allocated Capacity would be detrimental to the public safety, health, or environment.

(f) The City shall not unreasonably delay, deny, or condition an application for a Transfer of Allocated Capacity.

(Ord. 3655-C.S., § 1, effective 11-11-16)

A Transfer of Allocated Capacity is subject to the following additional process and conditions:

(a) At least thirty (30) days prior to a proposed Transfer, an Industrial User shall provide the City with notice of its intent to do so by submitting an application for the proposed Transfer.

(b) The City will review the notice and application to determine if the conditions for the Transfer are met within thirty (30) days.

(c) If the City denies a Transfer of Allocated Capacity subject to this section because the then-existing wastewater infrastructure located on the property receiving the additional Allocated Capacity is not sufficient for the resulting wastewater discharge, the Transfer will be allowed if the proposed transferor or transferee makes provisions to correct any infrastructure deficiencies with improvements or operational modifications as may be needed to accommodate the additional wastewater proposed to be discharged from the property.

(d) The City may initiate a Transfer subject to this section by written request, avoiding (a) and (b) above.

(e) The City shall charge a legally compliant application review and processing fee in an amount to be set by the City to recover associated costs.

(Ord. 3655-C.S., § 1, effective 11-11-16)

Notwithstanding any other provision of this Code, Industrial Users shall not be charged a "reservation," standby, or similar charge for unused Allocated Capacity.

(Ord. 3655-C.S., § 1, effective 11-11-16)

The recipient of an approved Transfer of Allocated Capacity shall not be required to pay City capacity charges that might otherwise apply to increasing the amount of discharge from the property to which the Allocated Capacity will be Transferred.

(Ord. 3655-C.S., § 1, effective 11-11-16)

In the event that an Industrial User ceases operations at its business site or address and does not relocate those operations to another site or address within the City's Authorized Sewer Service Area or Transfer all or a portion of its Allocated Capacity, upon the Industrial User not renewing its wastewater discharge permit, the City may loan that portion of the Industrial User's Allocated Capacity that has not been Transferred. If the Industrial User later desires to Transfer its Allocated Capacity, including to a new User at the same business site or address, the Industrial User shall provide the City with one year's written notice of its intent to Transfer its Allocated Capacity before the Transfer will become effective.

(Ord. 3655-C.S., § 1, effective 11-11-16)

Valuation of Allocated Capacity for the purposes of Transfer shall be determined by the parties to the Transfer but may be based on EDU, as defined in this article. As part of a Transfer of Allocated Capacity application, at the request of the applicant, the City may calculate the number of EDU's proposed to be transferred.

(Ord. 3655-C.S., § 1, effective 11-11-16)

The provisions of this article regarding the Transfer of Allocated Capacity shall control over any conflicting provisions contained in this Code.

(Ord. 3655-C.S., § 1, effective 11-11-16)

Notwithstanding any other provision of this Code, industrial users shall not be charged a "reservation" or similar charge for unused permitted capacity, or for any historical capacity.

(Added by Ord. 3503-C.S., § 1, effective 3-5-09)

Notwithstanding any other provision of this Modesto Municipal Code, the historical capacity amounts recognized by the City of Modesto in City Council Resolution No. 2007-422 are deemed discharge rights of the users that can be transferred subject to assignable cause.

(Added by Ord. 3503-C.S., § 1, effective 3-5-09)

If a user purchases permitted capacity rights, from either the City or another User pursuant to this Code, that user will pay the purchase price to the City's bank or to the selling user, as the case may be, but the purchasing user will not pay a capacity charge to the City unless and until the purchased rights exceed that user's historical capacity (including any historical capacity transferred to the user) as calculated pursuant to and in accordance with City Council Resolution No. 2007-422.

(Added by Ord. 3503-C.S., § 1, effective 3-5-09)