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HomeMy WebLinkAbout05. Approve Resolution No. 2023-022 to extend the existing Septic to Sewer Financing Program for three years and approve Resolution No. 2023-023 to create a new three-year Lateral Repair and Replacement Pilot ProgramDCENTRALSAN MEETINGDATE: AUGUST3,2023 BOARD OF DIRECTORS POSITION PAPER Page 1 of 20 Item 5. SUBJECT: APPROVE RESOLUTION NO. 2023-022 TO EXTEND THE EXISTING SEPTIC TO SEWER FINANCING PROGRAM FOR THREE YEARS AND APPROVE RESOLUTION NO.2023-023 TO CREATE A NEW THREE-YEAR LATERAL REPAIR AND REPLACEMENT PILOT PROGRAM SUBMITTED BY: INITIATING DEPARTMENT: THOMAS BRIGHTBILL, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES - PDS -RATES AND FEES REVIEWED BY: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION MANAGER GREG NORBY, DEPUTY GENERAL MANAGER, OPERATIONS Roger S. Bailey General Manager ISSUE Approval of the Board of Directors (Board) is required to adopt resolutions. BACKGROUND Central San has established a number of financing programs which have been in place for more than twenty years. Contractual Assessment Districts (CADs) and Alhambra Valley Assessment Districts (AVADs) were created to extend sewer mains for neighborhoods. For residential property owners wanting to abandon their septic tanks and connect to nearby public sewer mains, Central San's District Code allowed for the financing of capacity fees. As high construction costs and reimbursement fees can be cost prohibitive for property owners considering installation of a new sewer lateral, Central San considered options to encourage conversion from septic to public mains. Extension of the Existing Septic to Sewer Financing Program On February 18, 2021, the Board adopted Resolution 2021-013 and expanded financing by establishing a two - August 3, 2023 Regular Board Meeting Agenda Packet - Page 27 of 64 Page 2 of 20 year pilot Septic to Sewer (S2S) Financing Program. The program allows residential property owners with septic systems who are adjacent to an existing Central San sewer main to finance construction costs and Central San fees associated with abandoning their septic system and connecting directly to the Central San sewer. Since the beginning of the program, construction and financing has been completed for 16 parcels. One additional parcel has a signed financial agreement and is in the permitting and construction phase. Prior to starting the program, a review identified 178 eligible parcels. Conceptual level construction cost estimates were prepared for these parcels, which averaged $15,900 with 84 percent of the cost estimates being below $50,000. An initial cap of $50,000 per parcel was included in the pilot financing program, in part to ensure that several large financing agreements did not cause a shortage of funds for other prospective participants. Of the 16 parcels where loan agreements have been completed, four of the parcels had costs greater than $50,000. Based on the higher than anticipated percentage of projects with costs greater than $50,000 and the increase in construction costs and fees since the program began, staff recommends that the cap be increased to $65,000 per parcel. Staff also suggests that changes in construction activity and costs warrant extending the pilot program an additional three years, rather than update District Code at this time. Creation of a New Pilot Sewer Lateral Replacement Financing Program Based on reaction and comments from users during the S2S pilot and additional comments from the Board and Board Committees, it is proposed to create an associated Sewer Lateral Replacement Financing Program for three years to address infiltration into existing sewer laterals that can impact wet weather flows into the treatment plant. Central San District Code Section 9.10.040 states that the construction, repair, and maintenance "side sewers" from the building to the point of connection with Central San's sewer main are the responsibility of the property owner. Note that while District Code and Standard Specifications refer to these as "side sewers", the phrase "laterals" is proposed for the financing program as this phrase may be more familiar to property owners and customers. Aging and defective sewer laterals are generally accepted to be significant sources of infiltration, a process where groundwater enters the wastewater collection system through cracks (or breaks) in the sewer lateral pipe or through misaligned pipe joints. This additional flow places an additional burden on the wastewater collection system, where it can lead to overflows. It also places an additional burden on the treatment plant, resulting in increased treatment costs and increasing the risk of overflow from the wet - weather storage basins during storms. Wastewater utilities have used a number of approaches to encourage or require property owners to ensure their sewer laterals are in good repair and are not contributing to infiltration. One of the least intrusive options would be to offer a financing program to assist property owners with the costs to replace an aging or defective sewer lateral. A white paper from the United States Environmental Protection Agency (EPA) on Private Sewer Laterals supports this position by commenting "...financing options can make it easy for the homeowner to agree to and proceed with the repair." The following terms are proposed for a three-year pilot financing program: • To be eligible, the project must be for the complete replacement of the sewer lateral. Projects for spot repairs are not eligible. August 3, 2023 Regular Board Meeting Agenda Packet - Page 28 of 64 Page 3 of 20 The program would also fund the installation of a new sewer lateral where it required to remedy a lateral is shared with another parcel, a situation which does not conform to Central San's Standard Specifications. I n such a case, the General Manager or his designee may determine that it is in the best interest of the property owners and Central San to only require the construction of a new sewer lateral downstream of the existing point of connection between the two existing laterals. A maximum project amount of $12,500 for single family residential parcels with 4 -inch laterals, and a maximum of $25,000 all other parcels with 6 -inch minimum laterals. The financed amount will be repaid to Central San through annual payments on the property tax bill collected over 15 years and will include the interest at the rate specified on the Schedule of Environmental and Development -Related Fees and Charges for the Septic to Sewer program. There will be no penalty for early pay-off. The higher maximum amount proposed for non -single family residential parcel is based on staff's experience that laterals in commercial district tend to have more utility conflicts often requiring hand excavation as well as more challenging traffic control and construction methods. If the Pilot Sewer Lateral Replacement Financing Program is approved, staff is planning to outreach to the real estate community and property owners whose laterals are connected to Central San sewer mains scheduled for routine replacement or reconstruction. ALTERNATIVES/CONSIDERATIONS The Board could decline to extend the existing Septic to Sewer Financing Program or could make changes to the terms of the proposed extension. The Board could decline to create a new Sewer Lateral Replacement Financing Pilot Program or could make changes to the terms of the proposed program. FINANCIAL IMPACTS Approximately $640,000 in currently allocated funds is available for both programs for FY 2023-24, if approved by the Board. If the program is highly successful and these funds are exhausted within the year, then staff will bring an item back to the Board to consider replenishment of the funds. Ultimately Central San would be paid back for the funds financed through the programs, including interest and set-up fees. As noted under Background, annual repayments will be secured on the property tax roll and include an annual financing interest rate with an additional 0.5% for staff time to administer the loans. Therefore, no public funds are at risk through the origination of these financing programs. COMMITTEE RECOMMENDATION The Finance Committee reviewed this matter at its July 18, 2023 meeting and recommended that the Board of Directors hear the matter. RECOMMENDED BOARD ACTION Approve Resolution No. 2023-022 to extend the existing Septic to Sewer Financing Program for three years and approve Resolution No.2023-023 to create a new three-year Lateral Repair and Replacement Pilot Program. August 3, 2023 Regular Board Meeting Agenda Packet - Page 29 of 64 Page 4 of 20 Strategic Plan Tie -In GOAL ONE: Customer and Community Strategy 2 - Promote initiatives to advance affordable and equitable access to services ATTACHMENTS: 1. EPA Article on Private Sewer Laterals 2. Resolution 2023-022 3. Resolution 2023-023 4. Presentation August 3, 2023 Regular Board Meeting Agenda Packet - Page 30 of 64 r A Page 5 of 20 Attachment 1 EPA United States C Environmental Protection Agency EPA Nese England Water Infrastructure Outreach provides tools, examples, and technical assistance for water infrastructure operators and managers, local officials, and other decision -makers for more effective and sustainable water infrastructure man gement. For more information see bto://www.0a.eoplaeton l /sso/toolbox.html Private Sewer Laterals June 2014 Portions excerpted from State of Technology for Rehabilitation of Wastewater Collection Systems (EPA/600/R-10/078) Private sewer laterals are the portion of the sewer network connecting individual and private properties to the public sewer system. Laterals are often in poor condition, and can have a significant impact on the performance of the sewer system and treatment plant. Cracked or broken laterals can allow groundwater and infiltrating rainwater (clean water) to enter into the sewer system which, at high levels, can cause problems at the treatment facility or overload the sewers and cause sanitary sewer overflows (SSOs). The condition of sewer laterals can affect the results of sewer system rehabilitation programs, particularly those programs investigating and addressing capacity and inflow and infiltration (1&1) issues. For example, after infiltration in a main sewer line has been corrected through rehabilitation, the groundwater level can rise and cause infiltration problems in adjacent sewer laterals (and can also result in water infiltration into nearby basements). This means that repairing or replacing sewer mains to remove infiltration may be less effective in reducing I&I than predicted until the laterals also are fixed. Typically, private laterals make up about half of the total length of a sewer system. Even when the system -wide impact of infiltration is not an issue, defective laterals can cause sewer backups, and can be an important issue of concern in public works agencies. The owners of the laterals may be unaware of these problems or unwilling to fix them if the consequences do not directly affect them. August 3, 2023 Regular Board Meeting Agenda Packet - Page 31 of 64 INFLOW SOURCES INFILTRATION 1J _. SOURCES Figure shows a typical layout for a residentialMoog sewer lateral connecting to a mainline in a UN CBPP® street, together with illegal drain connections ROOF DRAIN CLEANOUT C ROSS�ON NEC�TION - and some of the conditions that can contribute CONNECTion r BROKEN to high I&I. { CONNECTED tHOlJSE LATERAL FOUNDATION DRAIN l FAULTY LATERAL CONNECTION - FAULTY MAN HOLE- - - ..- STORM SANER COVER OR FRAME r SAANTARY CRACKED OR BROKEN PIPE Courtesy King County SEWER Dept. Natural Resources and Parks DETER 10RO TED MAN HOLE August 3, 2023 Regular Board Meeting Agenda Packet - Page 31 of 64 Page 6 of 20 Clean water can be directed into the sanitary sewer system through other private connections. The need to remove sources of non -wastewater "inflow" into the sanitary sewer system from private property is another concern for wastewater managers. These inflow sources can include connections from roof and driveway drains and from basement sump pumps. These inflows were once permitted in many communities, but are now typically prohibited. In general, removal of inflow sources represents one of the more cost-effective ways of removing unwanted water from a wastewater collection system. Newer laterals are generally installed with polyvinyl chloride (PVC) pipe, but according to a Water Environment Research Foundation survey over fifty percent of private laterals are vitrified clay pipe (VCP). VCP is prone to root intrusion, cracks, joint misalignment and general leakage, and private laterals are estimated to contribute about 40 percent of a system's infiltration and inflow. Lateral Renewal Decision -Making. After identifying problems related to the condition of sewer laterals, a sewer department will need to determine how or whether to address these problems. Criteria may include the direct cost-effectiveness of sewer lateral renewal (avoided cost versus incurred cost), but may also need to include more general considerations affecting public health, the environment, and quality of life. Even when looking at only the direct cost-effectiveness of lateral renewal, it is important to see it in the broader context of "where, how and when" the I&I affects the system and treatment plant. Repairing the laterals in one small basin may not appear to be cost-effective if the savings are calculated only by multiplying the reduction in total quantity of sewage conveyed annually by the average cost of conveyance/treatment per 1,000 gallons of sewage. However, the same repair may be cost-effective if it prevents peak flows from exceeding maximum design flows at lift stations or at the wastewater treatment plant (WWTP), or if it eliminates the need to upsize parts of the collection system. Because of the large investments required to bring most sewer systems up to standards, rehabilitation and capacity -building efforts may take many years; therefore, repair and renewal efforts must be prioritized over time. System needs and prioritization will then guide development of a strategy to deal with sewer laterals (i.e., whether it is necessary to address the condition of laterals; the approach; how to finance; access issues; and public awareness). The use of pilot projects for lateral rehabilitation has proved useful in many cities that have identified problem I&I. Pilot projects can provide area -specific as well as system -wide data. Private Property Issues. Even when a municipality has concluded that their sewer laterals present a problem they are still often reluctant to move ahead. Frequently it is because the buried sewer laterals that are presenting a problem to the municipality are not causing an obvious problem to the owners of the laterals. This makes dealing with private property owners over sewer lateral repairs a difficult issue. Most private property owners have no idea of the condition of their sewer laterals and they will see little or no direct personal benefit from the cost to repair their lateral. Linked to the legal issues of ownership, who should pay, etc., are also questions of legal right of access to the 2 August 3, 2023 Regular Board Meeting Agenda Packet - Page 32 of 64 Page 7 of 20 private property for inspection and repair work, as well as legal liability for accidents during inspection or repair work. Some key issues/options regarding legal and liability matters are: > Some states prohibit spending public money for private gain (i.e., improving private property by paying for rehabilitation of private laterals). This issue has been addressed successfully in the courts by arguing that the private gain is only incidental to a larger public gain, resulting from fewer sewer overflows and decreased sewage treatment costs. > Procedures for entering private property to conduct inspection and repair work vary widely across the U.S. Local ordinances can be checked and modified if necessary. > Many municipalities regard taking any additional responsibility for private sewer laterals as a major concern in terms of additional work and public liaison. Other municipalities are more proactive, seeing themselves as being in the best position to do something about lateral problems by providing homeowner -friendly programs, even if they do not take financial responsibility for the work. > Having the political will to force homeowner compliance is often an issue with elected officials who have to approve the program. Outreach can educate officials of the costs and benefits of action. Financing Issues. Programs to address issues with private laterals can be much more successful with less public resistance if the financial aspects, as well as the legal aspects, are carefully considered. Some considerations include: > For wealthier neighborhoods, financing options can make it easy for the homeowner to agree to and proceed with the repair. For low-income neighborhoods, some kind of financial assistance or deferral of payment until property sale may be essential to pursuing a program. > Sewer lateral repair may provide enough public good that a community may decide to pay for it. A few cities have decided to put up all of the money for the program. > Financing repairs with insurance - a warranty program approach where the homeowner essentially pays an insurance premium against the cost of a malfunctioning sewer system has been adopted by some cities. > Using a mandatory inspection at the time of sale and a requirement to have the lateral in proper condition before the property is transferred allows the cost of lateral repair to be paid at a time that money is available from the property sale. > A city can use its program size to bid or negotiate uniform and low costs for lateral repairs. A homeowner can opt to bid the work themselves, but a quick check on an individual price can often convince them that joining the city program is an opportunity to take care of the problem at a lower price and with less effort. August 3, 2023 Regular Board Meeting Agenda Packet - Page 33 of 64 Page 8 of 20 Inspection Technologies. Table 2 lists the common methods used for laterals inspection. More detailed discussions of these methods can be found in EPA's Condition Assessment of Wastewater Collection Systems. Table 2: Methods for Inspection of Sewer Laterals Method Description Building inspections Identifies uncapped cleanouts and various connections to the laterals. Smoke testing Identifies various connections and defective service laterals. Dye water flooding Identifies defective laterals and various connections to the sewer lateral. Mainline CCTV Identifies "suspect" laterals and may be able to inspect first few feet of the lateral. Lateral CCTV Identifies location and size of active leaks and some inactive leaks (water stains); also identifies change in pipe material/diameter along the lateral, sags, bends, etc. Pressure testing Identifies existence of both active and passive leaks. Electro scanning Identifies existence of both active and passive leaks in non-conductive pipes. Condition Assessment and Recordkeeping. The inspection data from a few sewer laterals may be representative of the condition of other laterals in the same sewer basin of the same material and date of construction. Decisions about whether the rehabilitation or replacement of a particular lateral is necessary can be made on the basis of this assessment, or may be made based on other system criteria. For example, laterals may be rehabilitated at the same time as mainline segments, as was done in Nashville and Davidson County, TN, or, all non -PVC laterals may be renewed in a sub -basin being rehabilitated, as was done in Sarasota, FL. However, in many agencies' programs, only laterals proven to be defective qualify for repair. The condition assessment will normally be based both on infiltration conditions in the lateral and on the lateral's structural condition. The assessment will document any evidence of the presence of infiltration along with any structural defects. Table 3 indicates the typical data sources and assessment parameters used for different aspects of condition assessment. Table 3: Basis for Condition Assessment Assessment Type Data Source Basis of Assessment Infiltration assessment CCTV Visible joint infiltration Visible joint infiltration Evidence of periodic leaking Digital scanning Evidence of periodic leaking Pressure testing Exfiltration rates Structural assessment CCTV/digital scanning Qualitative descriptions Quantitative scoring of individual defects and aggregated scores for pipe sections Operating conditions CCTV/digital scanning Qualitative descriptions (e.g., tree roots, debris, blockages) Other defects CCTV/digital scanning Qualitative descriptions (e.g., construction defects such as hammer tap lateral connections) M August 3, 2023 Regular Board Meeting Agenda Packet - Page 34 of 64 Page 9 of 20 Standardization of defect codes is just as important for sewer laterals as for mainline condition assessments. NAASCO's Pipeline Assessment Certification Program (PACP) observation codes are useful in describing and cataloging lateral conditions. Summary. One of the long-term goals for managing wastewater collection systems is to understand the most effective rehabilitation procedures with the lowest life -cycle cost. Determining if excessive infiltration and/or inflow are significantly impacting your collection or treatment system is a task that stands on its own. If infiltration is a significant issue within your system, it is almost guaranteed that private laterals are a part of the problem. An issue for moss municipalities when considering developing a lateral rehabilitation program is whether the cost and effort of the program can be justified by the potential public benefit (e.g., reduced treatment costs, reclaiming capacity, and avoiding sewage overflows). There are numerous examples of municipalities that have implemented an infiltration reduction program and many of them have included private laterals. Not addressing private laterals would be an incomplete investigation. Fortunately, municipalities throughout the country have begun to address these issues and have developed some innovative models and financing arrangements to move beyond the barriers. EPA's Guide for Estimating Infiltration and Inflow provides further information on estimating I&I in your sewer system. Further information and References EPA State of Technology for Rehabilitation of Wastewater Collection Systems (EPA/600/R- 10/078) July 2010 EPA Condition Assessment of Wastewater Collection Systems (EPA/600/R-09/049) May 2009 King County Storm Water & Ground Water in Sewers is a Regional Problem Vancouver An Approach Towards Private Sewer Lateral Certification in Real Estate Transactions February 2013 Water Environment Federation WEF Private Property Virtual Library August 3, 2023 Regular Board Meeting Agenda Packet - Page 35 of 64 Page 10 of 20 Attachment 2 RESOLUTION NO. 2023-022 A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT TO EXTEND THE SEPTIC -TO -SEWER (S2S) FINANCING PROGRAM FOR AN ADDITIONAL THREE YEARS 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, 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 the Central Contra Costa Sanitary District (Central San) as follows: THAT the existing pilot Septic -to -Sewer (S2S) Financing Program for encouraging property owners to abandon their septic tanks and connect to the sewer system is hereby extended for a three-year period to August 3, 2026, under the following conditions: 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 August 3, 2023 Regular Board Meeting Agenda Packet - Page 36 of 64 Page 11 of 20 Central Contra Costa Sanitary District Resolution No. 2023-022 Page 2 of 3 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 including interest at the rate shown in the Schedule of Environmental and Development -Related Fees and Charges; and 7. Unless extended by the Board of Directors, the S2S Financing Program will terminate on August 3, 2026. 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 certainty comes from the limited amount of environmental disturbance produced by a sewer connection and the impact - limiting features of Central San's Standard Specifications. PASSED AND ADOPTED this 3rd day of August 2023 by the Board of Directors of Central San by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Barbara D. Hockett 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 August 3, 2023 Regular Board Meeting Agenda Packet - Page 37 of 64 Page 12 of 20 Central Contra Costa Sanitary District Resolution No. 2023-022 Page 3 of 3 Approved as to form: Kenton L. Alm, Esq. Counsel for the District August 3, 2023 Regular Board Meeting Agenda Packet - Page 38 of 64 Page 13 of 20 Attachment 3 RESOLUTION NO. 2023-023 A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT TO ESTABLISH A NEW THREE-YEAR LATERAL REPLACEMENT FINANCING PILOT PROGRAM EFFECTIVE AUGUST 3, 2023 WHEREAS, Central Contra Costa Sanitary District (Central San) has, over the last several years, identified a prevalent sanitation issue being the need to manage and control inflow and infiltration into Central San's wastewater collection system; and WHEREAS, it is generally accepted that aging or defective side sewers and laterals can be significant sources of infiltration; and WHEREAS, reducing infiltration and thereby reducing wastewater flows has benefits in both the collection system and at the treatment plant; and WHEREAS, the cost and complexity of repairing or replacing a lateral or side sewer can be expensive enough to prevent a property owner from undertaking the work, thus perpetuating an ongoing health and environmental problem; and WHEREAS, a lateral replacement financing program would further Central San's mission to protect public health and the environment by encouraging replacement of defective sewer laterals within its boundaries; 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 the Central Contra Costa Sanitary District (Central San) as follows: THAT a three-year pilot Lateral Replacement Financing Program for encouraging property owners to replace defective sewer laterals is hereby approved; and THAT staff is directed to implement the pilot Lateral Replacement Financing Program for a three-year period effective August 3, 2023, under the following conditions: 1. Both residential and non-residential properties shall be eligible to participate in the program; and 2. The project must be for the complete replacement of the sewer lateral or separation of a shared lateral. Projects for spot repairs are not eligible; and 3. As a condition of participation in the program, the property owner must execute a promissory note and enter into a recordable Memorandum of Agreement; and 4. 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 replace a sewer lateral, including application and inspection fees, will be financed by Central San over a 15 -year period at the interest rate established for existing August 3, 2023 Regular Board Meeting Agenda Packet - Page 39 of 64 Page 14 of 20 Central Contra Costa Sanitary District Resolution No. 2023-023 Page 2 of 3 financing programs in the Schedule of Environmental and Development -Related Rates and Charges; and 5. Construction costs for sewer lateral repair or replacement may also be financed by Central San over a 15 -year period at the interest rate established for existing financing programs in the Schedule of Environmental and Development -Related Rates and Charges; and 6. Annual installment payments due under the Lateral Replacement Financing Program shall be collected on the Contra Costa County Property Tax Roll; and 7. The Board of Directors hereby delegates responsibility for executing and recording program documents to the General Manager or his designee; and 8. The Board of Directors shall receive an update on the Lateral Replacement Financing Program one year after the pilot program commences to consider whether to remove or raise the per -parcel caps of $12,500 for residential parcels and $25,000 for non-residential parcels. 9. Unless extended by the Board of Directors, the Lateral Replacement Financing Program will terminate on August 3, 2026. BE IT FURTHER RESOLVED THAT the Board of Directors finds that the application fees for participation in existing financing programs 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. PASSED AND ADOPTED this 3rd day of August 2023 by the Board of Directors of Central San by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California August 3, 2023 Regular Board Meeting Agenda Packet - Page 40 of 64 Page 15 of 20 Central Contra Costa Sanitary District Resolution No. 2023-023 Page 3 of 3 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 August 3, 2023 Regular Board Meeting Agenda Packet - Page 41 of 64 August 3, 2023 Financing Program Pilots: Septic to Sewer (S2S) Lateral Replacement - W— .... ' Board Meeting Danea Gemmell f' �f Planning &Development Services Division Manager Thomas Brightbill Senior Engineer -Financial Planning 1 Page 16 of 20 Attachment 4 2 August 3, 2023 Regular Board Meeting Agenda Packet - Page 42 of 64 1 S2S Program (3 -year extension) Eligible for Financing Application & Inspection Fees Capacity Fee CAD* & AVAD Fees Reimbursement Fee* Side Sewer Construction* Septic Abandonment* *Paid to third parties **Current Rate adopted lune 1, 2023 Page 17 of 20 Financing Terms Financing cap of $65,000 per customer 15 years with fixed annual rate of 3.84%** Customer provides three contractor proposals and signs a promissory note which is secured by the parcel No prepayment penalty Annual Payments made on the tax roll Only residential properties being converted from private septic tank systems to public sewer ,N.— service are eligible to participate in the program 3 S2S Recommendation Extend Septic to Sewer Pilot for another 3 -Years until June 2026 Based on number of projects with costs greater than $50,000 and the increase in fees and construction costs, the cap be increased to $65,000 per parcel. 4 r .=- -7 "' August 3, 2023 Regular Board Meeting Agenda Packet - Page 43 of 64 2 Page 18 of 20 5 Private Sewer Lateral Statistics -A, a a Residential Connections 97,600 single family homes 39,600 multi -family units Collection Pipeline Typical sewer lateral is around 30 feet Approximately 600+ miles of private residential sewer laterals �— Ir Overflow ) Protection Upper Lateral Device Lateral Breaks and leaks in private sewer laterals are generally assumed to be responsible for up to 50% of Inflow and Infiltration in a collection system I August 3, 2023 Regular Board Meeting Agenda Packet - Page 44 of 64 3 Page 19 of 20 EPA Guidance on Private Sewer Laterals "Most private property owners have no idea of the condition of their sewer laterals, and they will see little or no direct personal benefit from the cost to repair their lateral." "...repairing or replacing sewer mains to remove infiltration may be less effective in reducing I&I than predicted until the laterals also are fixed." "Programs to address issues with private laterals can be much more successful with less public resistance if the financial aspects, as well as the legal aspects, are carefully considered. " "...financing options can make it easy for the homeowner to agree to and proceed with the repair." sego- _— VA—s. Se 1. _de a.. MIA r Proposed Lateral Replacement Program Eligible for Financing Financing Terms Application & Inspection Fees 0 Financing cap of $12,500 per Single -Family Side Sewer Construction* Residential customer (4 -inch connection) • Financing cap of $25,000 for Multi -Family and Non -Residential customers (6 -inch connection) 15 years with fixed annual rate of 3.84%** Customer provides three contractor proposals and signs a promissory note which is secured by *Paid to third party contractors the parcel **Current Rate adopted lune 1, 2023 No prepayment penalty Annual Payments made on the tax roll Only properties planned for full replacement or required to separate a shared lateral are eligible to participate in the program August 3, 2023 Regular Board Meeting Agenda Packet - Page 45 of 64 4 Page 20 of 20 Lateral Replacement Proposal Recommendation Establish Lateral Replacement Pilot for 3 -Years until June 2026 Include provisions for both Residential and Non -Residential customers for full replacement of lateral or separation of a�' shared lateral. Lateral Replacement Financing is a good companion tool with Capital Renovation Projects First Come First Served until annual funding runs out Approximately $600K for FY2023-24 Evaluate the program at the end of the Pilot term. August 3, 2023 Regular Board Meeting Agenda Packet - Page 46 of 64 5