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Home My WebLink About03.b. Review proposal for a new Septic-to-Sewer Financing Program to encourage property owners to convert their septic tanks and connect to the sewer system Page 1 of 6 Item 3.b. CENTRAL SAN February 4, 2020 TO: ENGINEERING AND OPERATIONS COMMITTEE FROM: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION MANAGER REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES ROGER S. BAILEY GENERAL MANAGER SUBJECT: REVIEW PROPOSAL FORA NEW SEPTIC-TO-SEWER FINANCING PROGRAM TO ENCOURAGE PROPERTY OWNERS TO CONVERT THEIR SEPTIC TANKS AND CONNECT TO THE SEWER SYSTEM At the October 15, 2019 Engineering and Operations Committee meeting, the Committee suggested that staff propose a plan, or look at what is needed, to revise the existing program to protect public health by encouraging property owners to convert their septic tanks and connect to the sewer system. Staff will review the attached presentation during the meeting which provides a recommendation for a new financing program for consideration in the new Fiscal Year 2020-21 Capital Improvement Budget. Strategic Plan Tie-In GOAL ONE: Provide Exceptional Customer Service Strategy 1 - Build external customer relationships and awareness, Strategy 3- Maintain a strong reputation in the community GOAL FIVE: Maintain a Reliable Infrastructure Strategy 3- Protect District personnel and assets from threats and emergencies ATTACHMENTS: 1. Presentation February 4, 2020 EOPS Regular Committee Meeting Agenda Packet- Page 12 of 19 Page 2 of 6 PROPOSED q SEPTIC-TO-SEWER INCENTIVE PROGRAM Danea Gemmell Planning & Development Services Division Manager Engineering and Operations (E&O) Committee February 4, 2020 1 BACKGROUND October 15, 2019 E&O Committee "The Committee suggested that staff propose a plan, or look at what is needed, to revise the existing program to protect public health by encouraging property owners to convert their septic tanks and connect to the sewer system." M U11 February 4, 2020 EOPS Regular Committee Meeting Agenda Packet- Page 13 of 19 1 Page 3 of 6 ENVIRONMENTAL PROTECTION AGENCY STATES THAT SEPTIC SYSTEMS CAN IMPACT PUBLIC DRINKING WATER If a septic system is not O working properly or is located -g- too close to a drinking water 1 well, contaminants from the wastewater can end up in 3 zw drinking water. s WIN CFNTPAt SAN s REVISED SEPTIC CONVERSION PROGRAM PHASING 1 . Expanded Financing to property owners with nearby sewer mains • January to June 2020 Proposal to Board • Two-Year Pilot Program would end December 2022 • Initial outreach to gauge response and interest from residents 2. Outreach properties on septic that need a sewer main for service • Relax Contractual Assessment District (CAD)/Alhambra Valley Assessment District (AVAD) guidelines • July to December 2020 Proposal to Board • Proposed changes could include: • Additional Financing • Revise eligibility requirements to include additional participants • Smaller sized CADs • Central San-led voluntary assessment for new mains across District(similar to AVAD) ` 4 February 4, 2020 EOPS Regular Committee Meeting Agenda Packet- Page 14 of 19 2 Page 4 of 6 SEPTIC-TO-SEWER PROGRAM DETAILS • 177+ Single Family Residences on septic with existing sewer main in close proximity • Total project costs estimated at $6.5 million • Average Year of Construction: 1959 • Average Project Cost: $39,124 • Maximum Project Cost estimated: $87,132 • Financing Secured by property • Propose $1 million in fiscal year (FY) 2020-21 in Capital Improvement Budget (CIB) on first come, first served basis with option for additional funds in FY 2021-22 IS CFNTPAt.SAN SEPTIC-TO-SEWER PROGRAM ITEMS ELIGIBLE FOR FINANCING Current Proposed • Capacity Fees • Capacity Fees • CAD Fees at time of formation • CAD Fees • Application & Inspection Fees • Reimbursement Fees • Side Sewer Construction Costs • Septic Abandonment IL February 4, 2020 EOPS Regular Committee Meeting Agenda Packet- Page 15 of 19 3 Page 5 of 6 SEPTIC CONVERSION CONSTRUCTION COST EXAMPLE Application Fee&Inspection $2,315 i Capacity Fee(Gravity&Pump Zone) $8,175 AVAD Fee $22,950 Construct Side Sewer(Lateral) $7,000 Abandonment of Septic Tank $3,000 Total Eligible for Financing Financing Options 110 Sheridan Lane,Martinez 10 Year Term @ 6% $5,902 House Built in 1910 10 Year Term @ 3% $5,092 FY 2019-20 Property Tax:$5,011 15 Year Term @ 6% $4,473 Zillow Estimate:$666,800 Construct 100-foot lateral 15 Year Term @ 3% $3,639 1 CF.NTPAt SAN RECOMMENDATION • Approve a new Capital Project Program for FY 2020-21 to incentivize Septic-to-Sewer Conversions • $500,000 funding for first year of program • Financing cap of $75,000 per customer • Financing terms of 15 years with three-percent interest to encourage participation • Customer provides three contractor proposals and signs a promissory note i8 February 4, 2020 EOPS Regular Committee Meeting Agenda Packet- Page 16 of 19 4 Page 6 of 6 QUESTIONS CENTPAL SAN February 4, 2020 EOPS Regular Committee Meeting Agenda Packet- Page 17 of 19 5