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Home My WebLink About08.a. Consider exception to CAD Policy re proposed El Toyonal-Alta Vista-Dos Osos area in OrindaCentral Contra Costa Sanitary District BOARD OF DIRECTORS • Q• POSITION PAPER Board Meeting Date: May 17, 2012 Subject: CONSIDER CONTRACTUAL ASSESSMENT DISTRICT (CAD) FINANCING POLICY EXCEPTIONS FOR POTENTIAL EL TOYONAL AREA CADS Submitted By: Initiating Dept /Div.: Russell Leavitt, Engineering Assistant III Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: Y R. Leavitt T. Godsey J. Miy oto -Mills K. Alm Ann E. Farrell General Manager ISSUE: Proponents of potential El Toyonal area CADs have requested that the District grant exceptions to the current CAD financing policy that would allow the District to cover some non - participant shares and a longer repayment period for participants. RECOMMENDATION: Consider approving financing policy exceptions for potential El Toyonal CADs to allow District coverage of some non - participant shares, a longer repayment period for participants and to provide revised repayment and reimbursement rules to ensure that the District will ultimately be made financially whole with regard to the funds advanced for the CADs. FINANCIAL IMPACTS: None at this time. At a future date, the Board may be asked to initiate formation of one or more CADs for sewer construction projects estimated to cost from $670,000 to $1.28 million. If the policy exceptions are approved, reimbursement of District funds invested in the CADs would likely extend beyond the customary 10- year period; however, non - participant reimbursement fees could be adjusted to compensate for lost investment opportunity cost, participants' assessment balances could be made due -on -sale and interest paid by those financing their cost share could be collected over a longer time period. It is possible that one or more properties will never connect, in which case the District would not be reimbursed for monies advanced to cover those properties' shares. ALTERNATIVES /CONSIDERATIONS: The Board can reject or defer considering the policy exceptions. Doing so would create uncertainty among possible participants and make formation of CADs in the area more difficult to achieve. BACKGROUND: Current CAD financing policy requires that voluntary participants cover the cost of non - participants. For advancing these costs, participants are eligible to receive reimbursements from non - participants, if they connect to the sewer project within a period of twenty years. Participants may pay off their assessment in its entirety once the final assessment is set, or they may finance the assessment on their property tax bill at six percent annual interest for up to ten years. The financing runs with the property and may be assumed by future property owners. N: \ENVRSEC \Position Papers \Leavitt\2012 \5- 17 -12 \PP Consider CAD Pol Excptns for Potential El Tononal CAD Final 5- 17- 12.doc Page 1 of 5 POSITION PAPER Board Meeting Date: May 17, 2012 subject. CONSIDER CONTRACTUAL ASSESSMENT DISTRICT (CAD) FINANCING POLICY EXCEPTIONS FOR POTENTIAL EL TOYONAL AREA CADS At its April 5, 2012 meeting, the Board considered revising the CAD financing policy, in response to property owners' requests, to allow the District to fund non - participants' shares in areas such as El Toyonal, where project costs would be higher than average. Rather than a policy revision, the Board expressed interest in considering project -by- project exceptions to the financing policy. The Board directed staff to identify project circumstances that would warrant CAD financing policy exceptions and develop possible exceptions that would allow for greater District participation and lower initial project costs per property in the case of this specific neighborhood, while accelerating collection of some reimbursements and protecting ratepayer funds. Staff evaluated two sewer project CAD scenarios that would serve property owners currently showing interest in participating in El Toyonal area CADs (see Figure 1 and Table 1). The smaller -scale Scenario A would serve 20 properties. The route would reach from El Toyonal at Camino Del Cielo to Alta Vista, through an off -road easement to Dos Osos at the Cohn property, and then along Dos Osos to Los Norrabos. Scenario B would serve all 35 of the currently interested property owners, including the Wander property at the west end of Alta Vista, by extending the Scenario A sewer design further up Alta Vista and a short distance on Camino Del Monte. TABLE 1. COMPARISON OF EL TOYONAL CAD SCENARIOS Scenario A meets the CAD policy criterion that at least 60 percent of benefiting properties be developed. Scenario B does not meet this criterion at this time. While there is no minimum participation criterion, the Proposition 218 ballots returned are required to produce a majority affirmative vote. Presumably, Scenario A would meet this requirement, but it is not clear that Scenario B could. Scenario B has a lower cost N: \ENVRSEC \Position Papers \Leavitt\2012 \5- 17 -12 \PP Consider CAD Pol Excptns for Potential El Tononal CAD Final 5- 17- 12.doc Page 2 of 5 CCCSD COST PERCENT TO COVER INTERESTED ESTIMATED ESTIMATED 40% OF PERCENT IN SEWER PROJECT COST PER PROPERTIES SCENARIO DEVELOPED SERVICE COST PROPERTY a A - "COHN" 12/20 = 60% 11/20 = 55% $670K —$856K $34K —$43K $268K —$342K (20 properties) B - "ALL CURRENTLY INTERESTED" 17/35 = 49% 17/35 = 49% $992K- $1.28M $28K -$36K $397K -$512K (35 properties) (a) This is not an additional project cost, but the amount for which CCCSD might not be reimbursed within the customary 10 years. Scenario A meets the CAD policy criterion that at least 60 percent of benefiting properties be developed. Scenario B does not meet this criterion at this time. While there is no minimum participation criterion, the Proposition 218 ballots returned are required to produce a majority affirmative vote. Presumably, Scenario A would meet this requirement, but it is not clear that Scenario B could. Scenario B has a lower cost N: \ENVRSEC \Position Papers \Leavitt\2012 \5- 17 -12 \PP Consider CAD Pol Excptns for Potential El Tononal CAD Final 5- 17- 12.doc Page 2 of 5 POSITION PAPER Board Meeting Date: May 17, 2012 Subject. CONSIDER CONTRACTUAL ASSESSMENT DISTRICT (CAD) FINANCING POLICY EXCEPTIONS FOR POTENTIAL EL TOYONAL AREA CADS per property due to a lower average construction cost along its alignment and a smaller average parcel size. Greater District participation would reduce the cost to initial participants, which would increase the likelihood that CADs would be formed. Since some properties adjacent to proposed CAD sewer routes may not connect to the public sewer for many years, if at all, it is likely that the District would not be fully reimbursed by non - participants within the customary 10 -year CAD repayment period. Table 1 (on previous page) shows the amount under each scenario that may not be reimbursed to the District in the first 10 years were it to cover the non - participants' cost share for 40% of benefiting properties. To compensate the District for its lost investment opportunity costs, the District could annually adjust the non - participants' reimbursement fee by the annual yield (interest rate) earned by funds placed in the Local Agency Investment Fund (LAIF), plus one percent (consistent with the AVAD policy). Thus, if all of the non- participants eventually connected, costs plus interest would be recovered. Lengthening the financing term would extend the period over which the District recovers the funds advanced for construction of the CAD project. While making the participants' annual payment lower, extending the term would not lower their total costs, as additional interest is paid during the longer financing period. Extending the financing period from 10 years to 15 or 20 years would reduce participants' annual payment amount by 25 % -64 %, but would increase the total interest paid over the full life of the financing (and earned by the District) by 54% -112 %. Additionally, the District could require participants to pay off their remaining assessment balance upon sale of the property. This requirement would not affect reimbursements from non - participants, which would only be due upon connection, but would accelerate repayment of that portion of the funds advanced by the District for participants. Representatives of the CAD proponents have requested these CAD policy exceptions due to a number of factors associated with the El Toyonal area, including: 1) The project is in the EBMUD drinking watershed (San Pablo Reservoir); 2) Existing septic tanks perform poorly due to the El Toyonal hill's clay soil and steep topography; 3) Contra Costa Environmental Health has had a moratorium on development of new septic tanks in the area since 1970 (repair and replacement of existing septic systems is allowed); 4) Extending public sewers before property owners replace old septic systems with new "enhanced" (high cost) systems is an advantage to all (property owners N: \ENVRSEC \Position Papers \Leavitt\2012 \5- 17 -12 \PP Consider CAD Pol Excptns for Potential El Tononal CAD Final 5- 17- 12.doc Page 3 of 5 POSITION PAPER Board Meeting Date: May 17, 2012 subject CONSIDER CONTRACTUAL ASSESSMENT DISTRICT (CAD) FINANCING POLICY EXCEPTIONS FOR POTENTIAL EL TOYONAL AREA CADS and the District). Once an enhanced system is installed the owner of that property is unlikely to participate in a future sewer extension project, making it even more difficult for remaining property owners to afford extending the public sewer; 5) Sewer installation in El Toyonal is exceptionally expensive since the road is steep, narrow and windy, and City encroachment permits require severely limited working hours as it is the only practical route up and down the hill for upslope residents. In the course of examining other potential routes, District staff and the project proponents spoke with a number of neighbors who are opposed to the extension of public sewers in the El Toyonal area. No formal public notification was done, as there is currently no defined sewering project. One letter including the results of an interest survey conducted by sewer opponents has been received by the District (see Attachment 1). The survey indicates that owners of 20 properties in the area currently opposed to extension of public sewer, though not all of these properties are adjacent to the potential CAD sewers discussed above. At its April 3, 2012 meeting, the Board's Capital Projects Committee considered the issue of District coverage of some of the non - participant costs. The committee recommended developing exceptions to the CAD policy, in special cases where warranted due to cost and other factors, rather than changing the overall CAD policy. RECOMMENDED BOARD ACTION: Consider approving financing policy exceptions for potential El Toyonal CADs to allow District coverage of some non - participants' shares, extend the repayment period for participants and provide revised repayment and reimbursement rules to ensure that the District will ultimately be made financially whole with regard to the funds advanced for the CADs. N: \ENVRSEC \Position Papers \Leavitt\2012 \5- 17 -12 \PP Consider CAD Pol Excptns for Potential El Tononal CAD Final 5- 17- 12.doc Page 4 of 5 FIGURE 1. POTENTIAL EL TOYONAL CAD SEWERS N: \ENVRSEC \Position Papers \Leavitt\2012 \5- 17 -12 \PP Consider CAD Pol Excptns for Potential El Tononal CAD Final 5- 17- 12.doc is, et. al. ed trio A Il" = 325' U —U fI1.ITY * OPPOSES SEWER EXTENSION NO OPINION YET ON SEWER 7 EXTENSION Page 5 of 5 Attachment 1 April 18, 2012 25 Alta Vista Drive Orinda CA 94563 Central Contra Costa Sanitary District 5019 Imhoff Place Martinez Ca 94553 Dear Staff / Board Members of CCCSD, RECEIVED APR 2 3 2012 ENVIRONMENTAL SERVICES Enclosed please find a comprehensive list of almost every home on Alta Vista, Camino del Monte, Dos Osos, Via San Inigo and Los Norrabos (represented as Los Norobles on Google Earth), 100 Tres Mesas and a few addresses on El Toyonal. A complete list of all the affected homes on El Toyonal and El Rincon was requested by another resident but not provided. Therefore, there may be additional negative responses. I have personally contacted and /or met nearly every single listed homeowner and 1 lot owner to solicit their opinion of Installing the sewer on any one of these streets. As indicated in the YES /NO column, the overwhelming majority has confirmed in email or to me personally (or both) they oppose the sewer. Many have signed the attached, and if required, I can get everybody's signature. I am sending this now, as I understand there is a board meeting soon to discuss this issue. I want the board to understand the extent of the opposition. The property at 10 Alta Vista is vacant, so I do not know their position. The home at 42 Dos Osos is also vacant. The elderly resident passed away. There are five children in different states disputing the estate. I do not anticipate a speedy resolution. During a prior discussion with a CCCSD employee, I was told there would be a vote to install the sewer. Can you please provide the written guidelines for such an election? I also understand, CCCSD is considering absorbing the costs of the sewer installation, and getting'pald back' as residents eventually hook up. Does the county have the funds to support this action? Wouldn't CCCSD have to issue a bond and hold a general election? Remember, the 1970 Septic Tank moratorium imposed on this neighborhood guarantees all residents the right to repair a failed septic system. Please keep in mind there are faults and slide zones on Alta Vista, Dos Osos, and other areas. Installing the sewer would require extensive excavation and stabilization of these zones, at considerable cost. Thank you for taking the time to review and consider all that is presented above, and responding accordingly. Lot or Homeowner's Name Larry Karp, Consulting Engineer Dan & Beth Shrieve Aengus Family & Lee Ann Kjar & Mary10 Cowles & Steve Benvenue & Ksenija Olmer Doval & Fellcidad Orinda Address 100 Tres Mesas 7 Alta Vista Or !8 Alta Vista Or 10 Alta Vista Or 19 Alta Vista Dr 18 Alta Vista Or i25 Alta Vista Or 28 Alta Vista Dr iSewer YJN? ,NO NO NO i7 NO NO !NO 1 MO 42 Alta Vista Or IND n & Robin Holmes rolyn & Mark Malmberg Tucker Ide Yangslaw .y Henderson ,d & lacki Voelker Erman & Nina Farrell a & Albert Gregorson tyne & Margaret Wilcox WWI r.-170RA '6 Via San Inigo !NO i8 Via San lnigo tNO 259 El Toyonal I NO 300 El Toyonal NO ;9 Los Norrabos AO i 131 Camino del Monte ENO '29 Camino del Monte jN0 12 Camino del Monte I NO Lot on Alta Vista I NO RESIDENTS RESPONSES TO SEWER PROJECT ILBK@LBKarp.com orindash @comcast.net i I Ilkiar3 @comcast.net Imrvicowles @vahoo.com Lbenvenue@LBL.gov lxeniia @aol.com ifoberhol@gmaii.com r Ileehsu @comcast.net i i I Itsgro@edventurel3artners.com f E f rsoencerchmm@yahoo.co m i iilliebeen444 1999@vahoo.com I i hndrsnlucy @vahoo.com r 1 ninafarrell @comcast.net ritarat5630 @att.net �wayne @wwilcox.biz Comments oppose the sewer and development of this unstable area The Shrleve household is definitley and completely against the sewer Already on sewer. House empty. Purchased as Investment. Owner will sell when market Improves We are opposed to the sewer We too are in agreement about the sewer Do I coming up. Building more homes would forever destroy the character of this neighborhood. Many elderly residents would be adversely affected for all remaining years. We returned the district survey stating we oppose the sewer project. We were very surprised to learn the district'had no record' of our opposition. We are very concerned about the impact of the sewer construction on the stability of the land. We already have many unmitigated slides In the neighborhood. put in a $50k septic system. We at 42 Alta Vista will support no sewer. We just want to go on the record that we, Mike and Lee Callaham at 62 Alta Vista are against the sewer proposal.Let me add that when some of these developers were trying to get a sewer through by a different maneuver some years ago, they tried to get an easement from us and the plan was to tear up Alta Vista to do so. They offered to patch up the road afterwards, but not repave. Bear In mind also some portions of this road are unstable. This would Involve a lot of construction and disruption. alreadv attached to sewer on Las Piedras House vacant. Owner passed away. Five children in different states disagree on next steps The SgnYs, at 49 Doi Osos are against the sewer project. The Holmes family is against the sewer coming up. Dan spoke with the CCCSD about two months ago and told them we were opposed and we would not use it. Eleven new houses would add considerable traffic and hazard forever, and would greatly compromise our ability to evacuate In an emergency. Against sewer on Alta Vista & Dos Osos I, too, do NOT want this sewer project. I oppose the sewer Does not want the sewer Against sewer on Alta Vista & Dos Osos Both adamnetly opposed to sewer Both adamnetly opposed to sewer Against sewer on Alta Vista & Dos Osos Ike & Lee Callaham i62 Alta Vista Dr NO isiarc Family 165 Alta Vista Or NO !ber 42 Dos Osos ; ?7 ny & Laural Sgro `49 Dos Osos I NO i n & Robin Holmes rolyn & Mark Malmberg Tucker Ide Yangslaw .y Henderson ,d & lacki Voelker Erman & Nina Farrell a & Albert Gregorson tyne & Margaret Wilcox WWI r.-170RA '6 Via San Inigo !NO i8 Via San lnigo tNO 259 El Toyonal I NO 300 El Toyonal NO ;9 Los Norrabos AO i 131 Camino del Monte ENO '29 Camino del Monte jN0 12 Camino del Monte I NO Lot on Alta Vista I NO RESIDENTS RESPONSES TO SEWER PROJECT ILBK@LBKarp.com orindash @comcast.net i I Ilkiar3 @comcast.net Imrvicowles @vahoo.com Lbenvenue@LBL.gov lxeniia @aol.com ifoberhol@gmaii.com r Ileehsu @comcast.net i i I Itsgro@edventurel3artners.com f E f rsoencerchmm@yahoo.co m i iilliebeen444 1999@vahoo.com I i hndrsnlucy @vahoo.com r 1 ninafarrell @comcast.net ritarat5630 @att.net �wayne @wwilcox.biz Comments oppose the sewer and development of this unstable area The Shrleve household is definitley and completely against the sewer Already on sewer. House empty. Purchased as Investment. Owner will sell when market Improves We are opposed to the sewer We too are in agreement about the sewer Do I coming up. Building more homes would forever destroy the character of this neighborhood. Many elderly residents would be adversely affected for all remaining years. We returned the district survey stating we oppose the sewer project. We were very surprised to learn the district'had no record' of our opposition. We are very concerned about the impact of the sewer construction on the stability of the land. We already have many unmitigated slides In the neighborhood. put in a $50k septic system. We at 42 Alta Vista will support no sewer. We just want to go on the record that we, Mike and Lee Callaham at 62 Alta Vista are against the sewer proposal.Let me add that when some of these developers were trying to get a sewer through by a different maneuver some years ago, they tried to get an easement from us and the plan was to tear up Alta Vista to do so. They offered to patch up the road afterwards, but not repave. Bear In mind also some portions of this road are unstable. This would Involve a lot of construction and disruption. alreadv attached to sewer on Las Piedras House vacant. Owner passed away. Five children in different states disagree on next steps The SgnYs, at 49 Doi Osos are against the sewer project. The Holmes family is against the sewer coming up. Dan spoke with the CCCSD about two months ago and told them we were opposed and we would not use it. Eleven new houses would add considerable traffic and hazard forever, and would greatly compromise our ability to evacuate In an emergency. Against sewer on Alta Vista & Dos Osos I, too, do NOT want this sewer project. I oppose the sewer Does not want the sewer Against sewer on Alta Vista & Dos Osos Both adamnetly opposed to sewer Both adamnetly opposed to sewer Against sewer on Alta Vista & Dos Osos RESIDENTS RESPONSES TO SEWER PROJECT Signatures Print Name: _ __... . _. _ ___. _ __ .. __ _ . ___ _ 2S A .TAI _v_� �.T __._ _._N�+ _ ___.__ ____ _...._ _ �, a u t1 � Qe►� vr,r Wc. _ �7_. y_L2 .__C2/s_ IV tic, rz- - 3 Z°t Co, ap 1 A10 A 13 og-Z r q f 5 .d t,t; LL, _ 6.veas«► o nta Rpbin S _K. encer O i a Vrn. 5.�•. �" �t/O Da «.�.! 0 64wlass j�� _ .. _ _ &z �r Y9 1p°s 100 _rw & � AIV 1!1 7 - 41-4-4Pc -D Sin ''i etc � `TAO i I f 4/15 /1012 12:02 PM http : / /sz0099.ev.mai1.comcast .net /service /home /- /Sewer.xlsx