HomeMy WebLinkAbout03.e.2) Approve updates to Board Policy No. BP 022 - Alhambra Valley Assessment Districts (AVADs)Central Contra Costa Sanitary District
3.e.z
' BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: November 5, 2015
Subject: ADOPT NEW BP 022 — ALHAMBRA VALLEY ASSESSMENT DISTRICTS
(AVADs)
Submitted By: Initiating Dept. /Div.:
Thomas Brightbill, Senior Engineer Engineering & Technical Services /
Planning & Development Services
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
D. Gemmell – Planning & Development Services Division Mgr. � — I
JM. Petit – Director of Engineering & Technical Services
OvKentAlm Rogers. Bailey
Coun General Manager
ISSUE: The creation of a new Board Policy requires the review and approval of the
Board of Directors.
BACKGROUND: In 2006, the Board of Directors approved Resolution 2006 -117, the
Alhambra Valley Assessment District (AVAD) Policy. The resolution included a Policy
Statement section but a separate Board Policy (BP) document was never created.
In conjunction with a review and update of BP 010 Contractual Assessment Districts
(CAD), this new Board Policy was drafted.
While AVADs are a subset of CADs, there are several important distinctions between
the two including the role of the District in providing financing for non - participating
parcels and the length of the financing. The Board of Directors reviews and approves
AVAD projects in the same manner as they review and approve CAD projects.
ALTERNATIVES /CONSIDERATIONS: The Board of Directors could direct that
additional edits and changes be made to the AVAD policy.
FINANCIAL IMPACTS: None by this action.
COMMITTEE RECOMMENDATION: The policy was reviewed by the Administration
Committee at the October 26, 2015 meeting.
RECOMMENDED BOARD ACTION: Approve BP 022 — Alhambra Valley Assessment
Districts.
Attached Supportinq Document(s):
1. BP 022 – Alhambra Valley Assessment Districts
2. Resolution 2006 -117 – Resolution Establishing the Alhambra Valley Assessment District Policy
C: \Users\danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files\ Content .Outlook \IM9F5ZMU \PP -AVAD New
Policy 11- 05- 15.docx
Number: BP 022
Authority: Board of Directors
Effective:
Reviewed:
Initiating Dept. /Div.: Engineering /Planning &
Development Services
BOARD POLICY
ATTACHMENT
Central Contra Costa
Sanitary District
wig
www.cenirarsan.urg -
ALHAMBRA VALLEY ASSESSMENT DISTRICT
PURPOSE
To encourage residential property owners to connect to the public sewer system. The
Alhambra Valley Assessment District (AVAD) program provides financial assistance to
small groups of homeowners, often with inadequate septic tank systems, so that they
may extend the public sewer system to serve their properties. The AVAD program is
intended for residential properties, primarily owner - occupied, and not commercial
properties. While the AVAD program is similar to the Contractual Assessment District
(CAD) Program, it offers several additional incentives for property owners to connect to
public sewers tributary to the Alhambra Valley Trunk Sewer, thereby enabling the
District to more quickly collect reimbursement for District funds that were used for the
planning, design, and 2008 construction of the trunk sewer.
POLICY
This policy establishes the criteria for formation of AVAD projects. Nothing in this policy
is intended to bind the District to continue with the program for any predetermined time
period, nor does it create any right or entitlement in favor of potential program
participants. The Board may consider technical, economic, staffing, budgetary,
environmental and other factors in its consideration of whether to form an AVAD.
FUNDING
The initial funding for design, construction and inspection of the sewer improvements
will be provided by the District. The initial participating property owners repay their
share of this money, either in a lump sum at the completion of construction or in 15
annual installments. The annual installments include a nominal interest rate, are
secured by a lien on the property, and are collected on the property tax bill.
Subsequent participants repay their share of this money when they connect to the
sewer main.
Number: BP 022
ALHAMBRA VALLEY ASSESSMENT DISTRICT POLICY STATEMENT
Page 2 of 2
LEGAL
CADs are formed pursuant to Streets and Highways Code Section 5898, et seq. While
the State Legislature has found that CADs are voluntary, imposed pursuant to an
agreement and are not subject to Proposition 218, the District will not proceed with a
CAD formation if a majority of ballots, weighted by the proposed assessment, are
submitted in protest of the project.
FORMATION CRITERIA
In order to be eligible for participation in the District's AVAD financing program, the
proposed mainline sewer extension project must meet the following criteria:
• A minimum of three annexed properties must be directly tributary to a proposed
AVAD facility.
• A minimum of 60 percent of the properties directly tributary to a proposed AVAD
facility must already be developed.
• A participant parcel may not have more than two dwellings on it to participate in
an AVAD.
ATTACHMENT 2
RESOLUTION NO. 2006- 117
RESOLUTION ESTABLISHING THE
ALHAMBRA VALLEY ASSESSMENT DISTRICT POLICY
WHEREAS, the Central Contra Costa Sanitary District (CCCSD) has, over the
last several years, Identified a prevalent sanitation issue occurring within Alhambra
Valley, south of the City of Martinez, said issue being the need to replace residential
septic systems by connection to CCCSD's collection system; and
WHEREAS, this sanitation issue is increasing in Importance as a result of the
failure of existing septic systems due to age; and
WHEREAS, in order to replace failing septic systems with connections to the
public sewers, extension of existing public sewer mains is frequently required; and
WHEREAS, the cost and complexity of undertaking a sewer main extension may
prevent a single homeowner from connecting to the public sewer system thus
perpetuating an ongoing health and environmental problem; and
WHEREAS, public policy, as well as legal and fiscal constraints, limit the ability of
CCCSD to build or extend local street sewers to serve individual or small groups of
existing homes; and
WHEREAS, CCCSD is in the process of constructing a trunk sewer in Alhambra
Valley to serve as the backbone of an area -wide public sewer network; and
WHEREAS, the use of assessment districts can provide the structure and
financial assistance required to encourage neighbors to jointly undertake projects to
provide sewer service to their properties; and
WHEREAS, since 1997 on a demonstration basis, and from 1999 to 2004 on a
program basis, CCCSD has made use of the provisions of the Streets and Highways
Code Section 5898, at seq. in order to create Contractual Assessment Districts in order
to provide for assessment financing of main extensions for failing septic systems; and
Paps 1 of 11
Resolution No. 2006 -117
WHEREAS, at its July 20, 2006 meeting, CCCSD's Board of Directors voted
unanimously to conceptually approve an Alhambra Valley Assessment District program.
NOW, THEREFORE, the Board of Directors of the Central Contra Costa Sanitary
District adopts the Alhambra Valley Assessment District Policy Statement, attached as
Exhibit A and incorporated herein by reference.
The Board of Directors of the Central Contra Costa Sanitary District further finds
that this policy shall remain in effect until such further order of the Board; however, the
adoption of this policy does not create any vested right or entitlement to any parcel
owners within CCCSD's sphere of influence concerning eligibility for this program, nor
shall CCCSD be precluded from modifying or terminating this program at any time it
deems appropriate. The adoption of this policy also does not set a precedent for future
funding of other neighborhoods' main sewers.
PASSED AND ADOPTED this 2nd day of November 2006 by the Board of
Directors of the Central Contra Costa Sanitary District by the following votes:
AYES: Members: Boneysteele, Hockett, Nejedly, llenesini
NOES: Members: Lucey
ABSENT: Members: None
arcp �r�rz,
Mario M. Menesini
President of the Board of Directors,
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Ehino R. Boehme
Secretary, Central Contra Costa Sanitary District
County of Contra Costa State of Callfoo
APPROVED AS TO FORM;
Kento . AI
District Counsel
Pape 2 of 11
EXHIBIT A
ALHAMBRA VALLEY ASSESSMENT DISTRICT
POLICY STATEMENT
Introduction
This policy statement for the Alhambra Valley Assessment District (AVAD) Program
establishes the criteria for formation of AVAD projects, the process for the AVAD
program, and methodology for allocating costs and assessments among AVAD
participants.
The AVAD program will consist of voluntary Contractual Assessment Districts (CADS),
which are formed pursuant to Streets and Highways Code Section 5898, et seq. to
extend sewer facilities to residential areas currently served by septic tank and leachfieid
systems.
AVAD Program Purpo
The purpose of the AVAD Program Is to provide financial assistance to Alhambra Valley
property owners so that they may extend the public sewer system to serve their
developed properties. The goals of the AVAD Program are to assist property owners
with septic tanks to finance the cost of extending and connecting to the public sewer, to
avoid future use of septic systems and sewage pumping systems in Alhambra Valley;
and to facilitate direct and indirect connections to the Alhambra Valley trunk sewer so
that CCCSD can be reimbursed more quickly for its planning, design, and construction
expenditures associated with the trunk sewer extension.
AVAD Program Funding
CCCSD will budget sufficient funds for the extension of public sewer mains in Alhambra
Valley. This amount is estimated to be $3.5 million. Funds for construction of the trunk
sewer have already been budgeted. The Board of Directors, at its discretion, may
modify this program, including increasing or decreasing the budgetary ceiling, at
Pape 3 of 11
anytime. Nothing in this policy is intended to bind CCCSD to continue with the program
for any predetermined time period, nor does it create any right or entitlement in favor of
potential program participants.
Definitims
e An Alhambra Valley Assessment District (AVAD) is a contractual assessment
district (CAD), a legal entity, established pursuant to Streets and Highways Code
Chapter 5898 for the purpose of financing the construction of sewers in
residential areas currently being served by septic tanks.
e Parcel or Property denotes in this Policy a piece of residential real estate,
Including land and anything permanently affixed to the land including buildings.
The terms parcel and property have the same meaning herein and shall refer to
the divisions of property as indicated on County Assessor's Parcel maps.
e Direct connectors are parcels that can connect by lateral to the Alhambra Valley
Trunk Sewer being constructed by CCCSD.
e Indirect connectors are parcels that can connect by lateral to a public sewer main
that is tributary to a part of the Alhambra Valley Trunk Sewer.
e Participants are owners of direct or indirect connector properties who voluntarily
agree to enter into an AVAD contract.
e Nonparticipants are owners of direct or indirect connector properties who do not
to enter into an AVAD contract. Non - participants will not be assessed for their
share of the sewer improvement costs until the time of connection.
e Participant Parcels are the direct or indirect connector properties owned by
Participants.
e Non participant Parcels are the direct or indirect connector properties owned by
non - participants.
Pape 4 of 11
e AVAD Non participant Reimbursement Fees are fees collected from owners of
Non - participant Parcels at the time of connection to the sewer to reimburse
CCCSD for the Non - participant Parcel's share of the cost of sewer improvements
Installed under an AVAD.
Criteria for Formation
In order to be eligible for participation in CCCSD's AVAD assessment financing
program, the proposed sewer extension project must meet the AVAD formation criteria.
The criteria are as follows:
• A minimum of three properties must be directly tributary to a proposed AVAD
facility.
e A minimum of 60 percent of the properties directly tributary to a proposed AVAD
facility must already be developed.
e A minimum of half of the properties directly tributary to a proposed AVAD facility
must be willing to be a Participant, except in the case of the AVAD for Direct
connectors to the Alhambra Valley Trunk Sewer.
• A Participant Parcel may not have more than two (2) dwellings on it to participate
In an AVAD.
• Two or more proposed unconnected AVAD facilities may be combined into a
single AVAD for administrative purposes. When this happens, the expenses and
assessments for individual, unrelated facilities will be separated and assigned to
the respective, benefiting properties.
• After completion of the Alhambra Valley Trunk Sewer, CCCSD will establish
Direct and Indirect connector reimbursement charges for the trunk sewer and
form the first AVAD (AVAD No. 1) to finance allowable costs of direct connector
Pape 5 of 11
participants. Direct connectors will have one year from the establishment of the
trunk sewer AVAD No.1 to become Participants by signing an AVAD contract.
• Indirect connectors wishing to become Participants will have three years from the
establishment of the AVAD No. 1, for the trunk sewer, to obtain CCCSD approval
to initiate formation for an AVAD for their neighborhood, and eighteen months
thereafter to receive CCCSD approval of an AVAD election. AVADs will be
numbered sequentially in the time order initiated by CCCSD.
Notwithstanding the above - listed criteria, CCCSD will consider exceptions to this policy
on a case -by -case basis. CCCSD may consider technical, economic, staffing,
budgetary, environmental, and other factors in its consideration of whether to form an
AVAD and the ultimate decision Is at the sole discretion of the Board of Directors.
AVAD Formation Process
There are several staff level actions and three Board approval steps in the AVAD
process. CCCSD's Board of Directors will consider approval of individual AVAD
projects which staff has determined meet the formation criteria. The following Board
actions are required:
• Initiation of an AVAD
• Approval of the Engineer's Report and assessments; ordering of the
Improvements;, and approval of the AVAD election.
• Approval and levying of final assessments.
1. Initial Actions
• Groups of Alhambra Valley property owners may be eligible for an AVAD
If they can directly connect to the Alhambra Valley Trunk Sewer or seek
a sewer main extension to provide for connection to CCCSD system.
CCCSD staff will work with the owners to explain the AVAD process. If
Paps 6 of 11
a sufficient number of property owners and CCCSD remain Interested in
proceeding with an AVAD and the criteria for AVAD formation appears
to be met, CCCSD will consider initiation of an AVAD. Property owners
will be requested to submit letters indicating their interest in formation of
an AVAD. Property owners must already be included in District
Annexation 168 (Resolution of Application 2006 -047, adopted by the
Board of Directors on July 6, 2006). Staff will Issue a letter setting forth
its initial determination of eligibility for the AVAD program.
• if CCCSD staff determines that a proposed AVAD does not meet the
formation criteria, staff will notify the property owners In the proposed
AVAD of the staff decision in writing. Property owners may appeal this
staff decision to the CCCSD Board of Directors in accordance with
Chapter 1.16 of the District Code except as modified by this policy. This
policy allows property owners 30 days to request an appeal of a staff
decision. The Secretary of CCCSD will schedule the matter for a
hearing before the Board of Directors and provide written notice of the
time and place of that hearing to the affected property owners.
2. Creatlon of Assessment District
• Participants are required to retain an engineer to design and solicit bids
for the private work (the sewer facilities).
• An Engineer's Report estimating project costs and assessment levels
will be prepared by CCCSD in accordance with state law. Residents will
have 18 months from when CCCSD initiates formation of an AVAD to
submit sewer plans, construction bids, and other information necessary
for CCCSD to prepare an Engineer's Report.
Pays 7 or 11
e CCCSD will distribute Notices of Proposed Assessment and conduct an
election in accordance with state law by which property owners may
indicate their approval of or opposition to the proposed assessment.
e The Board of Directors will conduct a public hearing to announce the
outcome of the election and receive public comment about the proposed
assessment.
e Following the public hearing, the Board of Directors will determine the
election results and consider approval of the Engineer's Report,
preliminary assessments, and the AVAD improvements.
e if the proponent property owners do not provide all necessary
Information, including approved plans and construction bids, within 18
months of CCCSD's initiation of the AVAD proceedings, the AVAD
process will be terminated.
3. " se s%gnt (�gWcr t and ConstrupVton
e Following approval by the Board of Directors of the Engineer's Report
and AVAD improvements, the Participants must enter into a written
contract with CCCSD, which describes the responsibilities of the parties,
the work, and the provisions for payments.
e CCCSD will undertake the procedural requirements to form the AVAD;
review the plans for compliance with CCCSD standards, finance the
work, and establish the assessments.
e Participants are required to hire a contractor and to supervise the
construction of the private works AVAD facilities. CCCSD will have no
contractual relationship with the contractor and will not provide
construction management or site supervision; however, CCCSD will
Paps a d 11
inspect the project consistent with prevailing CCCSD inspection
procedures.
• CCCSD will accept the work if the work is done in accordance with
CCCSD's standards.
• Participants shall be required to provide all project cost records and
related information. CCCSD staff will review project costs, evaluate
eligible project costs, and determine the proposed final assessments.
The Board of Directors will then consider approval and levying of the
final assessments.
4. Payments and Assessments
• Unless limited by other provisions of this policy, each Participant shall
have the option to pay for his share of AVAD expenses after the work is
completed by either. 1) lump sum cash payment or 2) by contractually
subjecting the Participant's property to an annual assessment, including
Interest, over the term of the AVAD.
• The term of the Participant's assessment (payback period) shall be
fifteen years with no interest penalty for early payoff. The interest rate
shall be fixed when the CCCSD General Manager signs the contract
between the Participants.and CCCSD. The annual interest rate for
assessments shall be 1 percent above the then current average interest
rate on CCCSD temporary investments or 1 percent above the interest
rate at which CCCSD has borrowed funds for the AVAD Program. The
minimum interest rate shall be six percent.
• Participants are limited to use of the fifteen -year annual assessment
payment option for no more than two parcels at any given time. If a
Peps 9 of 11
person(s) owns three or more parcels in the same AVAD or different
AVADs, that person(s) may be a Participant for three or more parcels,
but will be eligible for the annual assessment option for only two parcels.
The shares of the AVAD expenses for the other parcels must be paid by
the lump sum payment option at time of connection.
• The assessments shall be equal for each Participant Parcel unless
otherwise provided for in the contract and documents creating the
AVAD. If an existing Partidpant's Parcel can be legally subdivided,
there are two dwellings currently existing on a single parcel or other cost
of service related factors justifying differing assessments are present,
said Parcel may be assigned more than one assessment.
• To determine the assessment for each AVAD Parcel, the Board of
Directors will divide the total allowable project costs by the total number
of benefiting properties, adjusting for exceptions as noted above.
• The costs of the work associated with designing and constructing
sanitary sewer mains, manholes, rodding inlets, and private sewer
laterals within public streets or right -of -way may be included as eligible
costs of the AVAD. Other eligible AVAD costs include paving and other
appurtenances within public streets, rights of way necessary to bring the
sewer service to a Participant Parcel, CCCSD's Capacity Fee, and
CCCSD's Alhambra Valley Trunk Sewer reimbursement charge.
• The cost of septic tank abandonment, installation of the private sewer
laterals (not within a public street or public right of way), and other
CCCSD fees and charges customarily due upon connection to the public
sewer shall be excluded from AVAD financing. For purposes of this
PaP 10 0111
paragraph, "rights of way" shall include public or private roads providing
legal ingress and egress to multiple parcels.
• The AVAD assessments will be imposed on each Participant Parcel and
recorded as a lien against the Parcel. The assessment will include the
principal and interest and will be collected on the property tax bill as an
assessment along with taxes and other assessments and charges on
the subject parcel
5. AVAD N ariicl ant leirnbsrseraaenz Fees
• CCCSD initially will be responsible for the Non - participant Parcels' share
of AVAD costs. Non - participants will reimburse CCCSD for these costs
as they connect to AVAD facilities In the future.
• When CCCSD staff determines that there are Non - participant Parcels
that could connect to an AVAD facility, the Board of Directors, in
accordance with CCCSD practice and the AVAD contract, will establish
AVAD Non - part icipant Reimbursement Fees. The obligation of a Nbn-
participant Parcel owner to pay a reimbursement fee upon connection to
an AVAD facility will not expire; CCCSD will collect AVAD Non-
participant Reimbursement Fees Indefinitely.
• The Board of Directors will establish AVAD Non - participant
Reimbursement Fees when the final assessments are established for
AVAD Participants. Subsequent adjustments to AVAD Non - participant
Reimbursement Fees may be made by the Board of Directors
periodically to recover CCCSD's carrying cost of advancing the Non-
participants' share of AVAD expenses.
Pape 11 of 11