November 2026 | Current Update

OVSD ADU Sewer Fees — November 2026 Update

Last updated: November 6, 2026. The current HCD correspondence, fee methodology and illustrative homeowner costs are addressed below.

NOVEMBER 6, 2026 | PUBLIC INFORMATION UPDATE

HCD Changes Its Interpretation of OVSD’s ADU Sewer Capacity Charges

On November 2, 2026, the California Department of Housing and Community Development (HCD) issued correspondence to Dennis McNulty, General Counsel for the Ojai Valley Sanitary District (OVSD), addressing the district’s charges for accessory dwelling units (ADUs). The document is titled Letter of Technical Assistance and is signed by Jamie Candelaria, Section Chief, ADU Policy, Housing Accountability Unit.

The issue is whether OVSD may assess an additional sewer capacity charge when an ADU connects through an existing private sewer lateral, rather than through a new or separate connection directly to the district’s sewer main.

What HCD’s November 2 Letter Says

HCD expressly states:

Previously, there was some confusion about the fees OVSD charges and the requirements of the statute. This letter supersedes HCD’s prior informal guidance on this topic.

This is a significant change from HCD’s June 6, 2026 written communication concerning fees for ADUs connected through private laterals. HCD now distinguishes between a connection fee for constructing a physical connection to the utility main and a capacity charge reflecting the ADU’s burden on the broader sewer system. HCD states that a connection fee is not appropriate for an indirect private-lateral connection, but that a capacity charge may be appropriate for either a direct or indirect connection.

The letter expressly supersedes prior informal guidance. It does not list every earlier communication affected, and it does not expressly identify HCD’s November 23, 2020 formal Technical Assistance Letter as withdrawn or superseded. ADURights.org seeks clarification of that scope and the legal basis for HCD’s changed interpretation of Government Code section 66311.5(e).

Did HCD Give OVSD Unconditional Approval?

No. The November 2 letter’s conclusion is expressly conditional:

So long as OVSD’s fees and charges conform to the requirements in Government Code section 66311.5, subdivision (e), they are not inconsistent with State ADU Law.

HCD also states that charges must be proportionate to the proposed ADU’s burden on the water or sewer system and must not exceed the reasonable cost of providing the service. HCD’s letter does not present a detailed, independent calculation of OVSD’s particular capacity charges. Its interpretation should therefore not be described as a determination that every individual assessment is correctly calculated or legally justified.

Public Availability of the November Correspondence

Unlike HCD’s November 23, 2020 Technical Assistance Letter, addressed to OVSD’s General Manager and copied to the California Department of Justice, the November 2, 2026 letter was addressed to OVSD’s General Counsel. That difference is not, by itself, evidence of impropriety.

When checked on November 6, 2026, the new letter was not identified among the Ojai-related entries shown on HCD’s public Technical Assistance and Enforcement Letters Dashboard. Its absence does not make the document invalid or unofficial; the question is how HCD classifies and publishes it and how affected homeowners can reliably access its current guidance.

First Cost Issue: Flat Initial Capacity Charges, Proportional ADU Charges

OVSD’s published 2025–26 schedule lists a $16,023.82 capacity charge per standard capacity unit, excluding a separate $475 project charge. Under the district’s residential capacity-unit methodology, a newly connected single dwelling may generally be assessed one standard unit regardless of its individual square footage or drainage-fixture-unit (DFU) count. In contrast, OVSD-82 calculates the capacity charge for a nonexempt ADU using the ADU’s DFUs as a fraction of 25 DFUs.

Consider two hypothetical new homes on separate vacant parcels: a 12,000-square-foot home with eight bedrooms, five bathrooms and two kitchens, and a 400-square-foot home with one bedroom and one bathroom. If each is assessed just one standard residential capacity unit, each initially pays $16,023.82 despite their dramatically different sizes and plumbing configurations.

Now suppose the smaller home adds a 200-square-foot, one-bedroom, one-bathroom ADU through its existing private lateral. If the ADU is nonexempt and has 10 countable DFUs, OVSD’s example calculation produces another $6,409.53 capacity charge (10 ÷ 25 × $16,023.82). The small property’s combined capacity charges become $22,433.35, compared with $16,023.82 for the much larger home.

The unanswered methodological question: Why is individual fixture-based demand apparently not used to scale the original primary-home charge, but used to impose an incremental charge on the small ADU? What system-capacity allocation was included in the original payment, and how is previously assigned capacity considered when an ADU is added?

A private lateral has finite hydraulic capacity, but its ability to carry wastewater is not identical to capacity in the district’s entire collection and treatment system. Nor does a flat initial fee automatically prove that the properties purchased identical quantities of legally defined system capacity. OVSD should disclose the cost allocation and assigned-capacity calculations that reconcile these different charging methods.

Second Cost Issue: An Additional Full Annual Sewer Service Charge

The recurring charge is a separate issue. OVSD’s Code, section 302.7.1, assigns a 1.0 residential service-unit factor to a single dwelling unit and to an ADU. Subject to the code’s applicable adjustments and surcharges, adding a qualifying ADU therefore generally results in a second basic residential sewer service unit even when the ADU is much smaller than the primary residence.

Using the reported FY 2026–27 basic rate of $82.26 per service unit per month, one service unit costs $987.12 per year, while two units cost $1,974.24 per year. Thus, in this example the 600-square-foot property with two dwellings pays twice the basic annual service charge of the 12,000-square-foot property with one dwelling.

Two dwelling units may create costs not captured by square footage alone, and recurring sewer rates are governed by requirements distinct from one-time capacity charges. Nevertheless, OVSD should explain the cost-of-service rationale for charging a small ADU an additional full residential service unit while calculating its one-time capacity charge proportionately by DFUs.

Combined Illustration: Capacity Charges and Sewer Service Fees

The table below puts both cost issues in one place, after the explanation of each. It uses hypothetical buildings and a hypothetical 10-DFU ADU. The capacity-rate example comes from the published FY 2025–26 schedule; the recurring-rate example uses the reported FY 2026–27 rate. These are illustrative comparisons, not a historical bill for a single construction date.

Property A: One Large Home

12,000 sq. ft.
8 bedrooms · 5 bathrooms · 2 kitchens
One primary dwelling; one service unit

Property B: Small Home + ADU

600 sq. ft. combined
400 sq. ft. home + 200 sq. ft. ADU
Two bedrooms · two bathrooms total; two service units

Illustrative charge	Large home	Small home + ADU
Initial capacity charge	$16,023.82	$16,023.82
Additional ADU capacity charge	$0.00	$6,409.53
Total one-time capacity charges	$16,023.82	$22,433.35
Monthly basic sewer service	$82.26	$164.52
Annual basic sewer service	$987.12	$1,974.24
10 years of basic sewer service*	$9,871.20	$19,742.40
Combined illustrated 10-year cost*	$25,895.02	$42,175.75

Difference in the combined illustration

$16,280.73 more

For the far smaller property with an ADU over a 10-year illustration: $6,409.53 in additional one-time capacity charges plus $9,871.20 in additional basic sewer service charges.

*Illustration only: Ten-year amounts assume the same stated monthly basic service rate for all 120 months, with no inflation or rate increases. The comparison combines rates identified for different fiscal years solely to demonstrate the fee structure. It excludes debt-service surcharges, permit/inspection charges, possible other charges, and exemptions or adjustments. The reported FY 2026–27 $82.26 rate should be checked against the signed rate ordinance before relying on these amounts as an official billing quote. The illustration assumes one initial capacity unit for each home, and that the ADU is nonexempt and has 10 chargeable DFUs; actual assessments depend on the project.

What OVSD and HCD Should Explain

The comparison does not prove that either fee is unlawful. It shows why OVSD should disclose the engineering assumptions, assigned-capacity rules, demand allocations, and cost-of-service calculations supporting its fees. In particular:

What amount of sewer-system capacity is included in the initial standard residential capacity unit, and how is that amount assigned to the parcel?
Why is a standard initial charge applied to primary dwellings with widely differing sizes and fixtures, while an ADU’s additional charge is scaled by DFUs?
Does the incremental ADU calculation account for capacity already assigned and paid for, and how does it avoid recovering the same capital costs twice?
What documented cost-of-service rationale supports an additional full basic residential service-unit charge for a small ADU?
What cost calculations did HCD review before concluding that OVSD’s charges were permissible so long as statutory requirements are met?

ADURights.org’s position: We continue to dispute HCD’s interpretation that Government Code section 66311.5(e) permits an additional capacity charge for an ADU using an existing private lateral without a required new or separate direct utility connection. We acknowledge the November 2 letter’s contrary interpretation and express supersession of prior informal guidance. We seek supervisory clarification of its relationship to the 2020 formal letter and the June 2026 communications, as well as a transparent review of OVSD’s fee methodology.

Supporting public sources — HCD correspondence and OVSD fee methodology

The $16,023.82 capacity amount is also documented in a City of Ojai public record; the older OVSD-hosted 2025–26 fee-schedule PDF link previously supplied was returning HTTP 404. The November 2 HCD correspondence is quoted from the document supplied in OVSD’s November 5, 2026 committee materials. Earlier HCD correspondence is discussed for context. This update distinguishes documented agency statements, hypothetical comparisons, and ADURights.org’s disputed legal interpretation.

Historical background — August 2026

Archive notice: The material below describes developments and requests as of August 2026, before HCD’s November 2 correspondence. HCD subsequently superseded its earlier informal guidance. The November analysis above represents the current HCD position.

August 2026 Homeowner Update — Archived

August 2026: Where Matters Stood at the Time

Historical update issued August 30, 2026. This section covers the August 20 Committee meeting, the August 24 Board appeal hearing, and the August 27 enforcement follow-up request submitted to HCD.

Status reported in August: OVSD had not adopted a districtwide suspension of the disputed ADU capacity charges, corrected Ordinance No. OVSD-82, or created a process to review prior charges for refunds or credits.

The August meetings produced important but conflicting developments. On August 20, an OVSD committee examined HCD’s position and discussed suspending enforcement. On August 24, the full Board upheld an individual charge involving an acknowledged private-lateral connection.

As of August 30, the issue remained unresolved. Committee discussion did not itself change District policy, stop collection, or authorize refunds.

August 27 — HCD Enforcement Request

ADU Rights Asks HCD to Escalate the OVSD Matter

On August 27, 2026, ADU Rights submitted a formal enforcement follow-up request to the California Department of Housing and Community Development (HCD) concerning OVSD’s continued assessment of sewer capacity charges against ADUs that connect through existing private sewer laterals.

The request explains that HCD has already provided written technical assistance and subsequent clarification concerning when ADU connection fees and capacity charges may be imposed. It asks HCD to move beyond additional interpretation and take the next appropriate enforcement step.

The request asks HCD to require OVSD to:

Suspend ADU capacity charges where no new, separate, or direct connection to the utility was required or mandated.
Suspend collection of disputed deferred-payment installments and tax-roll charges while the assessments are reviewed.
Revise or clarify Ordinance No. OVSD-82 and its implementation.
Identify ADUs previously assessed capacity charges and determine the actual sewer-connection type for each property.
Review paid charges, deferred-payment agreements, and charges placed on property-tax rolls.
Notify potentially affected homeowners directly and publicly report a corrective-action plan.

Historical status clarification (August 2026): This was an enforcement request submitted by ADU Rights, not an enforcement order. HCD subsequently issued its November 2 correspondence discussed above.

Read the August 27 HCD Enforcement Request →

Important August 20 development: OVSD staff discussed the connection types used by detached ADUs and indicated that direct connections to the District’s sewer main were rare. In one group of approximately 80 ADUs discussed during the meeting, staff indicated that only one connected directly to the main, while the others connected through private laterals.

District counsel discussed HCD’s position that an ADU using an existing private lateral cannot be assessed a connection fee or capacity charge when no new or separate connection directly to the utility is required. The Committee discussed recommending a suspension while OVSD obtains additional information and legal review. Staff also discussed an initial estimate suggesting that prior collections potentially affected by the issue could approach or exceed $1 million, depending on the period reviewed and which assessments are ultimately determined to require correction. No refund amount or legal obligation has yet been established.

August 24 Board decision: The full Board upheld a homeowner’s capacity charges despite an acknowledged connection through an existing private sewer lateral. OVSD relied in part on the statutory exception for an ADU constructed with a new or replacement single-family dwelling.

Because that appeal involved post-fire reconstruction, it should not automatically be treated as deciding the legality of charges imposed on ordinary ADUs added to existing homes. The written Notice of Decision remains important because it should reveal the Board’s precise findings and reasoning.

View OVSD Committee Agendas → Email OVSD Written Comment →

Homeowners should continue checking OVSD’s official agendas for the next Board or Committee meeting where this issue may return.

Download One-Page Homeowner Notice →

If you built an Accessory Dwelling Unit (ADU) in the Ojai Valley Sanitary District (OVSD) service area, this issue may apply to you.

Does This Apply to Me?

Did your ADU connect to the existing private sewer line serving your main home?

Did OVSD charge you a sewer capacity fee, connection fee, deferred capacity fee, or added annual sewer charge?

Were you told about the fee only after you had already received approvals, started construction, or built your ADU?

In June 2026, HCD communicated that fees for indirect ADU connections through existing private sewer laterals were inconsistent with State ADU Law. HCD changed that interpretation in its November 2 correspondence: it now distinguishes connection fees from capacity charges and considers the latter potentially appropriate for indirect connections, subject to statutory limitations.

What Happened at the Recent Meetings?

On August 20, the Ordinance/Public Relations/Newsletter/Webpage Committee reviewed Ordinance No. OVSD-82 and HCD’s written interpretation.
Homeowners described charges of thousands of dollars for small ADUs using existing private laterals and raised concerns about late or inadequate disclosure.
Staff indicated that direct sewer-main connections were rare. In one group of approximately 80 ADUs discussed at the meeting, only one reportedly connected directly to the main, while the others connected through private laterals.
The Committee discussed recommending suspension of the disputed practice while further review occurs, but the full Board had not adopted that suspension as of August 30.
On August 24, the Board upheld one homeowner’s charge in a case involving the new-or-replacement-home exception and unusual post-fire facts.
No districtwide refund, credit, suspension, or ordinance amendment has been approved.

Why the Existing-Lateral Issue Matters

California Government Code § 66311.5 generally provides that an ADU is not a new residential use for calculating utility connection fees or capacity charges unless it was constructed with a new single-family dwelling. The statute also restricts when a new or separate utility connection directly between an ADU and the utility—and a related fee—may be required.

Before November 2026, HCD had communicated that an ADU using an existing private lateral without a new direct utility connection could not be charged the disputed fees. The November 2 letter expressly supersedes HCD’s prior informal guidance and now treats capacity charges differently from physical connection fees.

The dispute as described in August 2026: OVSD imposed capacity charges on ADUs using existing private laterals while HCD’s earlier guidance tied fees to direct utility connections. HCD’s November 2 letter has since taken a different position on capacity charges.

Refunds and Credits Remain Unresolved

No refund or credit program has been approved. ADU Rights is asking OVSD to:

Identify every ADU assessed a capacity charge under OVSD-82.
Determine whether each ADU actually required a new or separate direct connection to OVSD.
Suspend collection of disputed unpaid or deferred charges during the review.
Review charges already paid or placed on property-tax bills.
Provide refunds, credits, adjustments, or other appropriate relief where charges were imposed without the legally required connection.
Notify affected homeowners directly instead of requiring them to discover the issue independently.

A prospective change alone would be incomplete: If OVSD stops imposing these charges going forward but does not review earlier assessments, previously charged homeowners could remain responsible for costs that are no longer imposed on similarly situated projects.

Where Matters Stood in August 2026

The August 20 Committee publicly examined the existing-lateral problem and HCD’s contrary interpretation.
The Committee discussed a possible suspension, but the full Board has not adopted one.
On August 24, the Board upheld one individual charge involving unusual post-fire reconstruction facts.
No revised ordinance or districtwide review of prior assessments has been announced.
No refund or credit process has been created.
The written reasoning for the August 24 appeal decision remains important.

What Homeowners Can Do Now

Check your records for OVSD invoices, deferred-payment agreements, will-serve letters, and property tax bills.
Look for ADU sewer capacity fees, connection fees, deferred capacity charges, or a second annual OVSD sewer charge.
Check whether the fee was disclosed before your will-serve letter, building permit, construction, final inspection, or occupancy.
Watch the official OVSD agenda pages for the next Board or Committee discussion:
https://www.ojaisan.org/committee_meeting_packets___agendas/index.php
Consider submitting a written comment to OVSD:
customer.service@ojaisan.org
Join other affected homeowners in asking OVSD to review ADU sewer charges like yours for possible refund or credit.

Questions Homeowners Can Ask OVSD

Will OVSD stop charging ADU sewer capacity fees where the ADU connects through an existing private lateral and no new direct connection to OVSD’s sewer main is required?
Will OVSD immediately suspend collection or enforcement of disputed ADU sewer capacity charges while the issue is under review?
Will OVSD explain how its initial capacity charges and ADU charges meet the statutory proportionality and reasonable-cost requirements under HCD’s November 2 interpretation?
Will OVSD identify homeowners who were previously assessed ADU sewer capacity fees under this practice?
Will OVSD review prior assessments for possible refund or credit?
Will OVSD directly notify affected homeowners instead of relying only on website postings?
Will OVSD disclose whether each affected ADU required a new direct connection to the sewer main or only connected to an existing private lateral?

Sample Written Comment

Homeowners may copy and adapt the sample comment below.

Subject: ADU Sewer Capacity Fee Review / OVSD-82

Dear OVSD,

I own property in the OVSD service area and built an ADU that connects to the existing private sewer line serving my main home. Please confirm whether ADU sewer capacity charges, connection fees, deferred fees, or added annual sewer charges like mine will be reviewed for possible refund or credit.

Please also confirm whether OVSD will suspend collection or enforcement of disputed ADU sewer capacity charges while the Board reviews OVSD-82 and HCD’s written interpretation.

Please confirm whether OVSD will directly notify homeowners who may have been assessed ADU sewer capacity fees under OVSD-82 where no new direct connection to the District’s sewer main was required.

Please add me to the District’s email list for future meeting notices and agenda updates regarding ADUs, OVSD-82, sewer capacity fees, connection fees, and ADU sewer charges.

Thank you.

Documents to Look For

OVSD capacity-fee invoice or deferred-payment agreement
OVSD will-serve letter
Property tax bill showing OVSD charges
ADU plans or inspection records showing the sewer connection type
Any email, letter, or invoice showing when OVSD first disclosed the fee
Any payment-plan document or deferred-capacity-charge agreement

Example of the issue: Under OVSD’s current ordinance interpretation, even a very small detached ADU—for example, about 160 sq. ft. connected through the existing private sewer line—could still be assessed more than $8,000 in sewer capacity charges, even when no new direct connection to OVSD’s sewer main was required.

Questions?

Ric Vane
ADU Rights
admin@adurights.org
https://adurights.org/

This information is not legal advice. Whether any specific charge should be reviewed depends on the facts and records for that property.

The sections below provide broader background on ADU capacity fees and related OVSD records. The November 2026 update at the top of this page is the current analysis; the August material is historical background.

California ADU Policy Brief

ADU Capacity Fees – Implementation Gap Brief

California has made significant progress in reducing barriers to Accessory Dwelling Units through state legislation intended to lower costs and increase housing production.

However, in practice, some local sanitation and utility districts continue to impose substantial fees on ADU projects, even in cases where no new or separate utility connection is required.

This creates a gap between state housing policy and local implementation. The result is increased costs, reduced feasibility for homeowners, and diminished effectiveness of ADU laws as a tool for addressing California’s housing shortage.

Key Takeaway: Clarifying and enforcing consistent ADU fee practices can directly reduce costs and improve small-scale housing production.

The Issue

Significant fees imposed after project approval
Lack of clear, upfront disclosure of total costs
Fees applied despite use of existing infrastructure
Limited recourse when policy is inconsistently applied

Real-World Example

A homeowner received full approvals to construct an ADU, including a “will-serve” letter with no fees disclosed.

After construction, the homeowner was billed over $12,000 in additional fees, later added to the property tax roll.

This created significant financial impact despite full compliance with all approvals.

The Implementation Gap

Inconsistent interpretation across districts
No clear enforcement mechanism
Unpredictable costs for homeowners

Explore the ADU fee issue in more detail:

State ADU Law Local Implementation Unexpected Cost Barrier

Impact

Discourages ADU development
Increases housing costs
Undermines state housing goals

Policy Considerations

Clarify when fees may be applied
Require upfront cost disclosure
Ensure consistent statewide guidance
Establish enforcement mechanisms

Explore the legal analysis, common questions, and supporting background:

Technical Analysis → FAQ / Key Questions → Return to ADU Brief →

Separate Issue

Separate Issue: OVSD Sewer Rate Increase Review

A recent Public Records Act response from the Ojai Valley Sanitary District produced budget workbooks, capital planning materials, financial records, investment documents, and wastewater permit materials related to the proposed FY 2026–27 sewer service fee increase.

This independent review examines the records produced, the District’s stated justifications, the supporting calculations, reserve and transfer assumptions, capital funding drivers, and the public documentation underlying the proposed increase.

The purpose is not to deny that sewer infrastructure and regulatory compliance are real concerns. The purpose is to help homeowners understand what documents were produced, what those documents appear to show, and what questions remain before property owners are asked to pay higher charges.

Preliminary Finding: The records reviewed raise important questions about how much of the proposed increase is tied to ordinary operating costs, how much is tied to reserves and capital transfers, and whether the supporting calculations have been clearly reconciled for public review.

What the Review Covers

Budget spreadsheets and rate-supporting calculations
Capital improvement planning documents
Reserve and transfer assumptions
Wastewater permit and regulatory compliance materials
Investment and financial background records
Questions regarding public transparency and Proposition 218 review

Why This Matters

Property owners are entitled to understand the basis for proposed sewer fee increases, especially when those increases are justified by technical, financial, regulatory, and capital planning claims.

A public-facing review allows homeowners to examine the source documents, compare the District’s stated reasons with the records produced, and decide for themselves whether additional explanation is needed.

Key Questions for Homeowners

What exact calculations support the proposed increase?
Was a formal rate study or cost-of-service study prepared?
How much of the increase funds current operations versus reserves or capital projects?
How were costs allocated among parcels and ratepayers?
Which documents quantify the cost impact of regulatory compliance?
Were the supporting spreadsheets finalized, checked, and reconciled?

Review the public records analysis and supporting materials:

OVSD Rate Review Findings & Analysis Source Documents

Prop 218 Information Start Here → Independent Review