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HomeMy WebLinkAbout04. Adopt revised resolution re S2S Financing Program to reflect Board action Page 1 of 8 Item 4. CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER MEETING DATE: MARCH 4, 2021 SUBJECT: ADOPT REVISED RESOLUTION NO. 2021-013 ESTABLISHING A NEW TWO-YEAR PILOT SEPTIC-TO-SEWER (S2S) FINANCING PROGRAM RETROACTIVELY TO THE START DATE OF MARCH 1, 2021, WHICH INCORPORATES VERBAL CHANGES AND DIRECTION GIVEN AT THE FEBRUARY 18, 2021 BOARD MEETING AT WHICH THE PILOT PROGRAM WAS AUTHORIZED SUBMITTED BY: INITIATING DEPARTMENT: DANEA GEMMELL, PLANNING AND ENG-PDS-DIVISION MANAGER DEVELOPMENT SERVICES DIVISION MANAGER REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION Roger S. Bailey Kenton L. Alm General Manager District Counsel ISSUE Approval of the Board of Directors (Board) is required to adopt resolutions. BACKGROUND On February 18, 2020, the Board approved the proposed new S2S Financing Program that would allow residents with existing homes on a septic system to finance the following costs: March 4, 2021 Regular Board Meeting Agenda Packet- Page 60 of 131 Page 2 of 8 • Construction of the sewer lateral; • Septic abandonment costs; • Contractual Assessment Districts (CAD), Alhambra Valley Assessment Districts (AVAD), or reimbursement fees to private installers, and; • Central San capacity fees, application fees, and inspection fees. Verbal changes were made as part of a motion to provide an update to the Board to consider whether to remove or raise the $50,000 cap per user. Additionally, minor corrections were made to the Resolution regarding the approved interest rate for the program. Therefore, the revised Resolution is presented to the Board as a consent item for approval, retroactively to March 1, 2021, the start date of the program. ALTERNATIVES/CONSIDERATIONS The Board could decline to make the corrections to the Resolution. FINANCIAL IMPACTS No additional financial impacts by this action. COMMITTEE RECOMMENDATION This matter was not reviewed by a Board Committee. RECOMMENDED BOARD ACTION Adopt the revised resolution establishing a new two-year pilot S2S Financing Program retroactively to the start date of March 1, 2021, which incorporates verbal changes and direction given at the February 18, 2021 Board meeting at which the pilot Program was authorized. Strategic Plan Tie-In GOAL ONE: Customer and Community Strategy 1—Deliver high-quality customer service GOAL TWO: Environmental Stewardship Strategy 2—Anticipate and prepare for potential regulatory changes GOAL THREE: Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability ATTACHMENTS: 1. Revised Resolution redlined 2, Revised Resolution March 4, 2021 Regular Board Meeting Agenda Packet- Page 61 of 131 Page 3 of 8 ATTACHMENT 1 RESOLUTION NO. 2021-013 A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT TO ESTABLISH A NEW TWO-YEAR PILOT SEPTIC-TO-SEWER (S2S) FINANCING PROGRAM ETROAu i ivcEFFECT"iE- TO THE START DATE OF MARCH 1, 2021 WHEREAS, Central Contra Costa Sanitary District (Central San) has, over the last several years, identified a prevalent sanitation issue being the need to replace residential septic systems by connection to Central San's collection system; and WHEREAS, it is generally accepted that converting properties in urban and suburban settings from septic tank systems to public sewer service is beneficial to regional water quality; and WHEREAS, this issue is increasing in importance as a result of the failure of existing septic systems due to age of existing septic systems in the area; and WHEREAS, in order to replace failing septic systems with connections to the public sewers, extension of sewer service connections and payment sewer connection fees are required; and WHEREAS, the cost and complexity of undertaking a sewer main extension may prevent a homeowner from connecting to the public sewer system, thus perpetuating an ongoing health and environmental problem; and WHEREAS, a septic-to sewer financing program would further Central San's mission to protect public health and the environment by encouraging the elimination of septic tanks within its boundaries, thus improving regional water quality; and WHEREAS, staff has analyzed the setup and administration costs for such a program, including direct costs, staff labor, overhead and interest; and WHEREAS, the Board of Directors finds that it is necessary to assess administrative charges to those customers who participate in the program for recovery of costs. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Central San, as follows: THAT a two-year pilot program called Septic-to-Sewer (S2S) Financing Program for encouraging property owners to abandon their septic tanks and connect to the sewer system is hereby approved; and THAT staff is directed to implement the pilot S2S Financing Program for a two-year period retroactiveeff�e to the program start date of March 1, 2021 under the following conditions: March 4, 2021 Regular Board Meeting Agenda Packet- Page 62 of 131 Page 4 of 8 Central Contra Costa Sanitary District Resolution No. 2021-013 Page 2 of 3 1. Only residential properties being converted from use of private septic tank systems to public sewer service shall be eligible to participate in the program; and 2. As a condition of participation in the program, a user must execute a promissory note and enter into a recordable Memorandum of Agreement; and 3. If a property owner elects to participate in the program, the fees that would otherwise be due at the time of Central San's issuance of a permit to connect to the public sewer will be financed by Central San over a 15-year period at the interest rate established for the S2S Financing Program in the Schedule of Environmental and Development-Related Rates and Charges; and 4. Annual installment payments due under the S2S Financing Program shall be collected on the Contra Costa County Property Tax Roll; and 5. The Board of Directors hereby delegates responsibility for executing and recording program documents to the General Manager or his designee; and Application, inspection, Capacity and Contractual Assessment District (CAD) and Alhambra Valley Assessment District (AVAD) fees, miscellaneous Central Sari as well as private reimbursement, side sewer construction and septic abandonment costs may be financed over 15 years in annual payments Martin at 2.74% and adjusted annually;variohlo I E)GaI AnoRGY IRVeStmon+ Fund Plus Gno perGente d with o not_to_oXGee roto of civ nornont•, �7. The Board of Directors shall receive an update on the S2S Financing Program one year after the pilot program commences to consider whether to remove or raise the $50,000 cap per user; and 7—.8. Unless extended by the Board of Directors, the S2S Financing Program will terminate on June 30, 2023. BE IT FURTHER RESOLVED THAT the Board of Directors finds that the application fees for participation in the S2S Financing Program included in the current Schedule of Environmental and Development-Related Rates and Charges are appropriate and reasonable administrative charges for recovery of Central San's program costs; and THAT the Board of Directors finds that this action is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to 15061(b)(3) of Central San's CEQA Guidelines, in that the program activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This certainly comes from the limited environmental disturbance produced by a sewer connection and the impact-limiting features of Central San's Standard Specifications. March 4, 2021 Regular Board Meeting Agenda Packet- Page 63 of 131 Page 5 of 8 Central Contra Costa Sanitary District Resolution No. 2021-013 Page 3 of 3 PASSED AND ADOPTED this 4t"4-t*' day of MarchFebruary 2021, by the Board of Directors of Central San by the following votes: AYES: Members: NOES: Members: ABSENT: Members: Tad J. Pilecki President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Katie Young Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Kenton L. Alm, Esq. Counsel for the District March 4, 2021 Regular Board Meeting Agenda Packet- Page 64 of 131 Page 6 of 8 ATTACHMENT 2 RESOLUTION NO. 2021-013 A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT TO ESTABLISH A NEW TWO-YEAR PILOT SEPTIC-TO-SEWER (S2S) FINANCING PROGRAM RETROACTIVE TO THE START DATE OF MARCH 1, 2021 WHEREAS, Central Contra Costa Sanitary District (Central San) has, over the last several years, identified a prevalent sanitation issue being the need to replace residential septic systems by connection to Central San's collection system; and WHEREAS, it is generally accepted that converting properties in urban and suburban settings from septic tank systems to public sewer service is beneficial to regional water quality; and WHEREAS, this issue is increasing in importance as a result of the failure of existing septic systems due to age of existing septic systems in the area; and WHEREAS, in order to replace failing septic systems with connections to the public sewers, extension of sewer service connections and payment sewer connection fees are required; and WHEREAS, the cost and complexity of undertaking a sewer main extension may prevent a homeowner from connecting to the public sewer system, thus perpetuating an ongoing health and environmental problem; and WHEREAS, a septic-to sewer financing program would further Central San's mission to protect public health and the environment by encouraging the elimination of septic tanks within its boundaries, thus improving regional water quality; and WHEREAS, staff has analyzed the setup and administration costs for such a program, including direct costs, staff labor, overhead and interest; and WHEREAS, the Board of Directors finds that it is necessary to assess administrative charges to those customers who participate in the program for recovery of costs. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Central San, as follows: THAT a two-year pilot program called Septic-to-Sewer (S2S) Financing Program for encouraging property owners to abandon their septic tanks and connect to the sewer system is hereby approved; and THAT staff is directed to implement the pilot S2S Financing Program for a two-year period retroactive to the program start date of March 1 , 2021 under the following conditions: March 4, 2021 Regular Board Meeting Agenda Packet- Page 65 of 131 Page 7 of 8 Central Contra Costa Sanitary District Resolution No. 2021-013 Page 2 of 3 1. Only residential properties being converted from use of private septic tank systems to public sewer service shall be eligible to participate in the program; and 2. As a condition of participation in the program, a user must execute a promissory note and enter into a recordable Memorandum of Agreement; and 3. If a property owner elects to participate in the program, the fees that would otherwise be due at the time of Central San's issuance of a permit to connect to the public sewer will be financed by Central San over a 15-year period at the interest rate established for the S2S Financing Program in the Schedule of Environmental and Development-Related Rates and Charges; and 4. Annual installment payments due under the S2S Financing Program shall be collected on the Contra Costa County Property Tax Roll; and 5. The Board of Directors hereby delegates responsibility for executing and recording program documents to the General Manager or his designee; and 6. Application, inspection, Capacity and Contractual Assessment District (CAD) and Alhambra Valley Assessment District (AVAD) fees, miscellaneous Central San fees as well as private reimbursement, side sewer construction and septic abandonment costs may be financed over 15 years in annual payments starting at 2.74% and adjusted annually; 7. The Board of Directors shall receive an update on the S2S Financing Program one year after the pilot program commences to consider whether to remove or raise the $50,000 cap per user; and 8. Unless extended by the Board of Directors, the S2S Financing Program will terminate on June 30, 2023. BE IT FURTHER RESOLVED THAT the Board of Directors finds that the application fees for participation in the S2S Financing Program included in the current Schedule of Environmental and Development-Related Rates and Charges are appropriate and reasonable administrative charges for recovery of Central San's program costs; and THAT the Board of Directors finds that this action is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to 15061(b)(3) of Central San's CEQA Guidelines, in that the program activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This certainly comes from the limited environmental disturbance produced by a sewer connection and the impact-limiting features of Central San's Standard Specifications. March 4, 2021 Regular Board Meeting Agenda Packet- Page 66 of 131 Page 8 of 8 Central Contra Costa Sanitary District Resolution No. 2021-013 Page 3 of 3 PASSED AND ADOPTED this 4th day of March 2021, by the Board of Directors of Central San by the following votes: AYES: Members: NOES: Members: ABSENT: Members: Tad J. Pilecki President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Katie Young Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Kenton L. Alm, Esq. Counsel for the District March 4, 2021 Regular Board Meeting Agenda Packet- Page 67 of 131