Timeline and Issues Regarding OVSD Fee Dispute, Including HCD’s Technical Assistance
January 28, 2019
OVSD Board of Directors meeting stated that there would be no charges for ADUs.
February 25, 2019 – June 17, 2019
Various updates and meetings where OVSD discussed processing ADU permits without any charges.
November 21, 2019
Regulations on impact fees and connection charges for ADUs under Government Code Section 65852.2(e)(1)(A).
December 31, 2019 – January 7, 2020
Interactions with OVSD regarding permit and fee requests contrary to state law.
November 23, 2020 – HCD Technical Assistance Letter
The HCD provided technical guidance to OVSD on permissible fees for ADUs, particularly addressing when connection fees and capacity charges may be applied. The key points are:
ADUs Exempt from Fees:
Mandated Direct Connection Not Required:
ADUs constructed entirely within an existing single-family home or another existing accessory structure are exempt from requiring a separate sewer connection.
In these cases, no connection fee or capacity charge can be imposed (Gov. Code § 65852.2, subds. (e)(1)(A), (f)(4)).
These ADUs are not considered a new use for the purpose of calculating such fees because they do not increase the overall utility burden.
“ADUs for which no separate “connection” may be required and no connection fee or capacity charge may be imposed”
ADUs Subject to Fees:
Mandated Direct Connection:
If a local utility, such as OVSD, requires that an ADU be connected to the sewer system through a direct and separate connection, then connection or capacity fees may be charged. However, these fees are limited by the following conditions:
Proportionate to the ADU’s Burden:
The fees must be proportionate to the ADU’s burden on the system, calculated based on either the square footage of the ADU or the number of drainage fixture units (DFUs) the ADU contains (Gov. Code § 65852.2, subd. (f)(5)).
Reasonable Cost:
The fees must not exceed the estimated reasonable cost of providing the service that the connection requires (Gov. Code § 66013).
Key Definitions:
Mandated Connection:
A connection is considered “mandated” when the utility or district requires that the ADU be connected to the utility system separately from the main house. In cases where no new connection is required (e.g., internal ADUs), no fees can be imposed.
Direct Connection:
A direct connection refers to the ADU being connected directly to the utility infrastructure (e.g., sewer main), separate from the primary residence. When a direct connection is required, fees may be imposed, but they must be proportionate to the impact of the ADU.
OVSD’s Noncompliance:
According to the HCD, OVSD’s practice of charging a flat fee of $16,000 for all residential uses, including ADUs, regardless of size or burden, is illegal under state law. OVSD must revise its fee structure to charge fees only when a mandated direct connection is required, and the fees must be proportionate to the ADU’s impact based on either square footage or DFUs(ovsd-adu-letter.11.23.2…).
February 1, 2021 – June 23, 2021
OVSD reached out to me and asked if I still wanted a “Will Serve” letter for my ADU. I responded affirmatively. OVSD then requested that I resend my plans, which I did the same day. OVSD issued the “Will Serve” letter the same day without requesting any payment.
At the time they supplied me with the “Will Serve” letter they did not have a compliant ordinance dealing with ADU fees, as evidenced by the HCD’s Technical Assistance Letter.
OVSD’s ordinances (301.7 and 301.8) specify that all applicable capacity charges must be paid before issuing a “will-serve letter. Their own existing ordinance, and subsequent ordinances state that fees must be paid prior to the issuance of the Will Serve letter. Since, there was no fee listed on my letter, I of course relied on their ordinance and believed no fees would ever be charged to my ADU.
April 26, 2021
OVSD passed Ordinance OVSD-82 in response to the California Housing and Community Development Department’s (CaHCD) Technical Assistance Letter dated November 23, 2020. This changed the process and calculations of capacity fees for ADU’s, in response to the HCD’s Technical Assistance letter they decided to no longer charge each ADU the full $16,500 capacity fee that they would for any new dwelling, creating a new direct connection to the sewer main, (essentially a fee they charged for any new lateral direct connection for a new home), they chose to use a proportional fee.
This complied with the one of the HCD’s focused issues, causing them to have to make partial payments to some ADU homeowners. In their new ordinance they stated that they are allowed to charge capacity fees for either direct OR INDIRECT sewer connections which is contrary State ADU Law and to the other issue the HCD explained to them.
The OVSD selected January 1st, 2018 as the retroactive date for the ADU connection fees to take effect.
May 25, 2021
As per the request on the Will Serve letter, a copy of the approved plans for the ADU were sent by USPS mail to the OVSD as required.
June 2021
The new ADU is completed. The Ventura Building and Safety Inspection card is completed, which included sign off of the sewer connection to the existing lateral, and the property is just waiting for its’ certificate of occupancy for completion. The OVSD office phoned and asked to see the property. They were allowed, and a staff member entered the ADU, looked at the bathrooms, and any plumbing fixtures.
June 23, 2021
Shortly after an OVSD inspector visited, a surprise invoice was sent to the address requesting payment in the amount of $12,653.08. In response, this started an appeal process with the OVSD.
March 28, 2022
A final appeal hearing was held in front of the OVSD Executive Board in which the general manager confessed to the board why he charged the capacity fees to an ADU that did not have a direct connection, and why he denied the initial appeal: “So the appeal is based on our ruling. The appeal is not based on our interpretation of a state code. If the board wants to have a discussion, make some sort of ruling about whether or not our code complies with state law. That’s different than the action that’s before you tonight,”
The appeal was denied by the Board.
March 28, 2022 – March 8, 2023
Legal actions and appeals regarding the fees, including filing a writ of mandate and a demurrer. None the cases were ever adjudicated on merits. The first one was dropped due to lack of financial resources following multiple demurrer attempts by the defendants. The other two case were unsuccessful due to being ‘untimely’.
June 5, 2024
A certified mail ‘Demand for Payment – Collection Via Property Tax Roll 2024-2025’ was sent on June 3, 2024 informing me that an extra $12,653.08 was being placed on my tax bill.
June 24, 2024
I sent a clarification request to Alison Young, OVSD General Manager, asking for the OVSD to clarify their new retroactive fee demand.
July 1, 2024
I contacted Alison Young, OVSD General Manager, asking if OVSD had indeed placed approximately $12,600 on my 2024-2025 tax bill, and if it was, I requested to be placed on the standard 5-year deferred payment plan if those charges had been applied.
July 24, 2024
Alison Young confirmed that the tax roll data, including the $12,600 fee, had already been submitted to the county assessor. She informed me that the board would review my request for a 5-year deferred payment plan at the regular board meeting on August 26, 2024.
August 6, 2024
Well before I was able to request a deferred payment plan, the OVSD held a special board meeting, but the agenda only listed “Closed Session – Conference with Legal Counsel – Anticipated Litigation.” There was no explanation or opportunity to address the board regarding my payment plan request.
August 13, 2024
I received an email from OVSD denying my request for a 5-year deferred payment plan based on the decision made during the closed session of the August 6 meeting.
August 26, 2024
Although I had been told that my request would be considered during this meeting, I was not given any opportunity to contest or address the charges. I also never received formal notice of the lien or additional sewer fees being placed on my property tax bill. This lack of notice also aligns with the doubled sewer fees, which I had no prior knowledge of.
Key Legal Concerns:
Unnotified Additional Sewer Fees on Property Tax Bill
OVSD has been adding extra sewer fees to my county property tax bill without my knowledge or authorization, effectively doubling my sewer fees annually.
Evidence: Review of the property tax bill showing these extra charges. The latest demand letter from OVSD indicates they plan to continue this practice.
Legal Concerns: Does OVSD have the legal right to impose these charges without notice, and did this process adhere to due process requirements? Typically, California law requires notice and a judgment before placing a lien for unpaid services.
Retroactive Fee Demands and Lien Threat
OVSD is demanding $12,653.08 in arrears and threatening to place a lien on my property for unpaid sewer connection fees related to my ADU, despite the absence of an initial request for payment.
Evidence: Demand letter from OVSD, including previous communications such as the Notice of Determination (March 20, 2022), and Demand for Payment (June 27, 2023).
Legal Concerns: Address the legality of retroactive fee demands and whether OVSD followed proper notification procedures. Typically, liens require due process and a court judgment.
Compliance with OVSD their own Ordinances
OVSD’s ordinances (301.7 and 301.8) specify that all applicable capacity charges must be paid before issuing a “Will Serve” letter. I built my ADU exactly as submitted and did not receive any payment request when the “Will Serve” letter was issued.
Evidence: The “Will Serve” letter from OVSD indicated compliance without upfront fees. OVSD’s ordinances clearly outline the timing and amount of payment requirements.
Legal Concerns: Did OVSD violate its own ordinances by not requesting payment upfront and later attempting to impose retroactive charges?
Comparison with Other Property Owners
Other property owners received detailed fee breakdowns and upfront payment requests, unlike my case, which suggests unequal treatment.
Evidence: Documents such as the “Sewer Availability Letter” and “Permit Receipt with Fee Breakdown” for other property owners highlight the detailed fee information they received upfront.
Legal Concerns: Investigate if unequal treatment or procedural inconsistencies occurred. This discrepancy strengthens the position that the retroactive fees and lien threats may be unjustified.
OVSD’s Capacity Fee Policy Violates State ADU Law
OVSD’s policy of charging capacity fees up to $16,000 for ADUs that make indirect connections is contrary to State ADU Law (Gov. Code § 65852.2), which specifies that such fees are only allowed for direct connections. This was clearly stated in the HCD’s Technical Assistance Letter dated November 23, 2020.
Evidence: The HCD letter outlines the circumstances under which connection or capacity fees may be imposed, emphasizing that fees for indirect connections are not permissible. OVSD’s policy directly conflicts with these legal guidelines.
Legal Concerns: OVSD is unlawfully imposing capacity fees on ADUs that are not subject to these fees under state law. Their failure to adjust their policy following the HCD’s guidance constitutes a violation of Government Code § 65852.2 and opens them to legal challenges.