HomeMy WebLinkAbout07.a. FORMATION OF A CONTRACTUAL ASSESSMENT DISTRICT (CAD) FOR PROPERTIES ON SUNNYBROOK RD., ALAMO; SEWER IMPROVEMENTS; ADOPT RESOLUTIONS OF INTENTION TO CREATE SUNNYBROOK RD. CAD NO. 2010-1 APPROVAL TO CONDUCT PROCEEDINGS FOR CADCentral Contra Costa Sanitary District
' BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: May 6, 2010 No.: 7.a. Engineering
Type otAction: AUTHORIZE CAD
subject: CONSIDER THE FORMATION OF A CONTRACTUAL ASSESSMENT
DISTRICT (CAD) FOR PROPERTIES ON SUNNYBROOK ROAD IN ALAMO FOR
INSTALLATION OF SEWER IMPROVEMENTS; ADOPT RESOLUTIONS OF
INTENTION TO CREATE SUNNYBROOK ROAD CAD NO. 2010-1, FOR
APPROVAL OF THE BOUNDARY, AND REQUESTING CONSENT OF CONTRA
COSTA COUNTY FOR CCCSD TO CONDUCT PROCEEDINGS FOR THE CAD
Submitted By:
Russell Leavitt, Engineering Assistant III Engineering/Environmental Services
Initiating Dept./Div.:
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
V
C. Swanson
~ A. arrell
R. Leavitt
/IY v
K. Alm
J e .Kelly,
General Manager
ISSUE: Owners of properties on Sunnybrook Road in Alamo are interested in
connecting their homes to the Central Contra Costa Sanitary District (CCCSD) sewer
system and have requested formation of a Contractual Assessment District (CAD) to
finance an extension of the public sewer system. Board approval is required for a CAD.
RECOMMENDATION: Approve initiating the formation of Sunnybrook Road CAD
No. 2010-1.
FINANCIAL IMPACTS: There are minor administrative costs for initiating the formation
of a CAD. These costs eventually will be paid by the CAD participants if a CAD is
actually formed. This action does not establish an interest rate for the CAD financing.
If the CAD receives final approval from the Board in the future, the estimated CAD
costs are $150,000.
ALTERNATIVES/CONSIDERATIONS: Reject or defer initiating formation of the CAD.
These actions would halt or delay the CAD proceedings.
BACKGROUND: CCCSD funded a CAD Program to finance sewer main extensions
from 1997 to 2004. During this seven-year period, CCCSD financed 23 CADS at a cost
of $3,630,000. The participants of each CAD are repaying CCCSD over aten-year term
at interest rates ranging from 5.5% to 7.5%. To date, $2,510,000 has been repaid and
the outstanding principal is $1,120,000.
There has been renewed interest in the CAD program in recent years. There are
approximately ten neighborhoods with varying levels of interest in using CADs to extend
sewers. The estimated costs of extending sewers to these neighborhoods are
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POSITION PAPER
Board Meeting Date: May 6, 2010
subject. CONSIDER THE FORMATION OF A CONTRACTUAL ASSESSMENT
DISTRICT (CAD) FOR PROPERTIES ON SUNNYBROOK ROAD IN ALAMO FOR
INSTALLATION OF SEWER IMPROVEMENTS; ADOPT RESOLUTIONS OF
INTENTION TO CREATE SUNNYBROOK ROAD CAD NO. 2010-1, FOR
APPROVAL OF THE BOUNDARY, AND REQUESTING CONSENT OF CONTRA
COSTA COUNTY FOR CCCSD TO CONDUCT PROCEEDINGS FOR THE CAD
approximately $4 million. There is one potential CAD along Sunnybrook Road in Alamo
that is ready to proceed. The estimated cost of this CAD is $150,000.
Historically, CCCSD has used Sewer Construction Fund reserves for financing CADS.
However, planned expenditures for capital improvement projects over the next ten
years, plus the temporary loss of ad valorem tax revenue due to State actions, may
impact the ability to fund CADs using CCCSD reserves. Staff has investigated the use
of loans to fund some or all of the potential CADs. At this time, there is a market for
CCCSD to obtain loans at favorable rates for new CADs. Alternatively, CCCSD could
refinance the outstanding principal owed on past CADS ($1,120,000) and use these
funds for financing future CADs.
Given the varying level of interest in CADs, staff proposes to evaluate whether to use
CCCSD reserves or loans on a case-by-case basis.
Owners of properties located on Sunnybrook Road in Alamo have contacted CCCSD
staff to obtain information regarding connecting their homes to CCCSD's public sewer
system. At the June 18, 2009 Board meeting, the neighborhood presented a petition
signed by owners of thirteen of the sixteen properties that could be served by a
Sunnybrook Road public sewer expressing interest in forming a CAD. The area where
the CAD would be formed is shown on Attachment 1.
The initial steps toward creation of Sunnybrook Road CAD No. 2010-1 are for the
Board of Directors to adopt a resolution indicating CCCSD's intention to designate an
area within which contractual assessments are appropriate; briefly describing the
proposed financing for the project; establishing the boundaries of the CAD; setting the
time, date, and place for a public hearing at which interested persons may inquire about
or object to the proposed program; and directing staff to prepare an Engineer's Report
describing the project and financing arrangements. Additional resolutions are required
to approve the boundary of the assessment district and to request the consent of
Contra Costa County for CCCSD to conduct proceedings for Sunnybrook Road CAD
No. 2010-1.
By Resolution No. 2001-008 on February 1, 2001, the Board adopted the CAD Program
Policy Statement, which includes formation criteria, procedures, and definitions. Key
features of the program are:
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POSITION PAPER
Board Meeting Date: May 6, 2010
subject. CONSIDER THE FORMATION OF A CONTRACTUAL ASSESSMENT
DISTRICT (CAD) FOR PROPERTIES ON SUNNYBROOK ROAD IN ALAMO FOR
INSTALLATION OF SEWER IMPROVEMENTS; ADOPT RESOLUTIONS OF
INTENTION TO CREATE SUNNYBROOK ROAD CAD NO. 2010-1, FOR
APPROVAL OF THE BOUNDARY, AND REQUESTING CONSENT OF CONTRA
COSTA COUNTY FOR CCCSD TO CONDUCT PROCEEDINGS FOR THE CAD
The CAD policy uses voluntary assessment districts based on a contractual
assessment process. Participants will sign a contract with CCCSD, agreeing
to pay back funds fronted by CCCSD to cover the design and construction of
infrastructure.
2. The source of funds to cover the assessment district costs would be CCCSD
reserves from ad valorem tax revenues or borrowed funds with an interest
rate based on the Local Agency Investment Fund (LAIF) rate plus 1% or the
borrowed funds' interest rate plus 1 %, with a minimum interest rate of 6%.
3. Assessment district formation criteria include requiring having a minimum of
five properties directly tributary to a proposed CAD facility; a minimum of 60%
of those properties must have existing homes served by septic tank systems;
and there can be no more than two dwellings per Participant Parcel. If one
person owns more than one property in a neighborhood, only one property
can be financed through the CAD. Exceptions to these criteria will be
considered by the Board on a case-by-case basis.
4. The obligation to pay assessments would be recorded as a lien against the
property. Participants would be given the option to pay off their assessment
within one month of the assessment being set or allowed to amortize the debt
through payments on their property tax bills.
5. The amortization period for paying back funds to CCCSD would be 10 years
with no interest penalty for early payoff.
6. The assessment district would offer financing for the following property
owners' costs: share of the sewer main extension design and construction
costs, including the portion of a private lateral sewer located in the street. The
cost of installing the lateral sewer on a participant's property, abandoning an
existing septic tank, and the CCCSD capacity fee and other fees are
specifically excluded from CAD financing.
CAD participants are responsible for the non-participants' share of the costs
of the CAD facilities. CCCSD will establish reimbursement fees, which will be
collected from non-participant parcels at the time of connection to the
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POSITION PAPER
Board Meeting Date: May 6, 2010
subject CONSIDER THE FORMATION OF A CONTRACTUAL ASSESSMENT
DISTRICT (CAD) FOR PROPERTIES ON SUNNYBROOK ROAD IN ALAMO FOR
INSTALLATION OF SEWER IMPROVEMENTS; ADOPT RESOLUTIONS OF
INTENTION TO CREATE SUNNYBROOK ROAD CAD NO. 2010-1, FOR
APPROVAL OF THE BOUNDARY, AND REQUESTING CONSENT OF CONTRA
COSTA COUNTY FOR CCCSD TO CONDUCT PROCEEDINGS FOR THE CAD
public sewer system. The reimbursement fees will be used to first reduce the
outstanding assessments. of the CAD participants, and any remaining '
reimbursement fees will be distributed to the CAD participants.
The proposed Sunnybrook Road CAD No. 2010-1 complies with the terms set forth in
the revised CAD policy approved at the February 1, 2001 Board of Directors meeting.
The CAD formation criteria are listed below:
CAD FORMATION CRITERION PROPOSED SUNNYBROOK ROAD
CAD NO. 2010-1
1. A minimum of five properties must be 1. There are more than five properties that
directly tributary to the proposed CAD would benefit from the proposed CAD
facilities. sewers.
2. A minimum of 60 percent of the properties 2. All of the properties are developed with
directly tributary to the proposed CAD existing homes using existing septic
facilities must have existing homes served systems.
by septic systems.
3. A Participant Parcel may not have more 3. None of the properties has more than two
than two (2) dwellings to participate in a dwellings on it.
CAD.
The CAD Program is not in either the current 2009-10 or proposed 2010-11 Capital
Improvement Budget. The estimated cost of the proposed Sunnybrook CAD is
$150,000. Staff plans to request the Board to authorize funds from the Sewer
Construction Fund for the Sunnybrook CAD No. 2010-1 at a future date.
Staff has concluded that this project is exempt from the California Environmental
Quality Act (CEQA) under CEQA Guidelines Section 15061(b)(3), since it can be "seen
with certainty that there is no possibility that the activity in question may have a
significant adverse effect on the environment." This certainty is based on CCCSD's
past experience with numerous sewer construction projects of this nature, the relatively
short distance involved, and the impact-limiting nature of CCCSD's construction
specifications that would be required of the project. Approval of this project will
establish the Board of Directors' independent finding that this project is exempt from
CEQA.
The Board Budget and Finance Committee will review this item at its meeting on
Monday, May 3, 2010.
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POSITION PAPER.
Board Meeting Date: May 6, 2010
Subject. CONSIDER THE FORMATION OF A CONTRACTUAL ASSESSMENT
DISTRICT (CAD) FOR PROPERTIES ON SUNNYBROOK ROAD IN ALAMO FOR
INSTALLATION OF SEWER IMPROVEMENTS; ADOPT RESOLUTIONS OF
INTENTION TO CREATE SUNNYBROOK ROAD CAD NO. 2010-1, FOR .
APPROVAL OF THE BOUNDARY, AND REQUESTING CONSENT OF CONTRA
COSTA COUNTY FOR CCCSD TO CONDUCT PROCEEDINGS FOR THE CAD
RECOMMENDED BOARD ACTION: Authorize formation of a CAD consisting of up to
sixteen properties on Sunnybrook Road in Alamo by:
Adopting a resolution of intention to create Sunnybrook Road Contractual
Assessment District No. 2010-1 for the purpose of installing sewer improvements
(Exhibit 1);
2. Adopting a resolution approving the boundary of the assessment district
(Exhibit 2); and
3. Adopting a resolution requesting consent from Contra Costa County for CCCSD
to conduct proceedings for Sunnybrook Road CAD No. 2010-1 (Exhibit 3).
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Central Contra Costa Attachment
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EXHIBIT 1
RESOLUTION NO. 2010-
RESOLUTION OF INTENTION TO CREATE
SUNNYBROOK ROAD CONTRACTUAL ASSESSMENT DISTRICT NO. 2010-1
FOR THE PURPOSE OF INSTALLING SEWER IMPROVEMENTS
WHEREAS, the public health and the environment will be best protected by the expansion of
the public sewer system;
WHEREAS, the construction and installation of a sanitary sewer pipeline, together with
appurtenant work and facilities, in areas not presently connected to the sewer system will
facilitate the elimination of potential public health problems due to failing septic systems; and
WHEREAS, it would be convenient and advantageous to establish a boundary around an area
within which CCCSD and property owners may enter into contractual assessments and make
arrangements to finance public improvements to parcels which are developed and where the
costs and time delays involved in creating an assessment district pursuant to alternative
provisions in the law would be prohibitively large relative to the cost of the improvement.
THEREFORE, the Board of Directors of the Central Contra Costa Sanitary District (Board)
resolves:
This Board intends to approve the following improvement under the authority of the
Municipal Improvement Act of 1911, as amended, to wit: construction and installation
of approximately 1,100 linear feet of sanitary sewer line, together with appurtenant
work and facilities located at Sunnybrook Road in Alamo, California.
2. This Board finds that the parcels within the Contractual Assessment District are
shown within the boundaries of the map entitled, "Proposed Boundaries of
Sunnybrook Road Contractual Assessment District Nd. 2010-1."
3. This Board intends to levy a special assessment upon participating parcels within the
described district in accordance with the special benefit to be received by each parcel
of land, respectively, from the improvement. The improvement proposed will not
confer any special benefit upon any publicly owned land. Hence, there shall be
omitted from special assessment all public streets, alleys, and places and all land
belonging to the United States, the State of California, Contra Costa County, and
Central Contra Costa Sanitary District now in use in the performance of a public
function.
4. CCCSD intends to provide loan financing for the improvements, subject to the
availability of funds and any limitation on the commitment or expenditure of funds for
the Contractual Assessment District Program as may be established from time to
time by CCCSD's Board of Directors. Loans shall be repaid by assessments on the
property of participating parcel owners. Assessments shall be paid over a maximum
period of ten (10) years with interest at a rate to be fixed by CCCSD.
Page 7 of 10
5. The procedure for the collection of assessments will be the placement of
assessments on participating parcel owners' tax bills. The first assessments may be
placed on owners' tax bills in fiscal year 2011-2012.
6. This Board appoints Curtis Swanson, Environmental Services Division Manager, as
Engineer of Work for this project to prepare the report required by Section 5898.22 of
the Streets and Highways Code.
A public hearing shall be held on this matter before the CCCSD Board of Directors on
July 1, 2010 at the District Offices at 5019 Imhoff Place, Martinez, California. This
date is tentative and may be modified in the future.
8. The Board independently finds that this project is exempt from the California
Environmental Quality Act (CEQA) under CEQA Guidelines Section 15061(b)(3),
since it can be "seen with certainty that there is no possibility that the activity in
question may have a significant effect on the environment." This certainty is based
on CCCSD's past experience with numerous sewer construction projects of this
nature, the relatively short distance involved, and CCCSD's impact-limiting
construction specifications that would be required of the project.
PASSED AND ADOPTED this 6th day of May, 2010, by the Board of Directors of the Central
Contra Costa Sanitary District by the following votes:
AYES: Members:
NOES: Members:
ABSENT: Members:
Michael R. McGill
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Elaine R. Boehme
Secretary of the Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Kenton L. Alm
Counsel for the District
Page 8 of 10
EXHIBIT 2
RESOLUTION NO. 2010-
RESOLUTION APPROVING BOUNDARY MAP
SUNNYBROOK ROAD CONTRACTUAL ASSESSMENT DISTRICT NO. 2010-1
The Board of Directors of the Central Contra Costa Sanitary District (CCCSD) resolves:
A map entitled "Proposed Boundaries of Sunnybrook Road Contractual Assessment District
No. 2010-1" has been filed with the Secretary of the Central Contra Costa Sanitary District.
This Board approves the map and adopts the boundaries shown on the map as describing the
extent of the territory included in a proposed assessment district to be known as Sunnybrook
Road Contractual Assessment District No. 2010-1, Central Contra Costa Sanitary District,
County of Contra Costa, California.
This Board intends to levy a contractual assessment upon participating parcels within the
described District in accordance with the benefit to be received by each parcel of land,
respectively, from the improvement. There shall be omitted from assessment, all public streets,
alleys, and places and all land belonging to the United States, the State of California, Contra
Costa County, and CCCSD because it has been determined that no special benefit will be
conferred on any such land within the District.
This Board finds that the map is in the form and contains the matters prescribed by
Section 3110 of the California Streets and Highways Code.
This Board directs the Secretary of CCCSD to certify the adoption of this resolution on the face
of the map and to file a copy of the map with the County Recorder for placement in the Book of
Maps of Assessment and Community Facilities Districts.
PASSED AND ADOPTED this 6th day of May, 2010 by the Board of Directors of the Central
Contra Costa Sanitary District by the following vote:
AYES: Members:
NOES: Members:
ABSENT: Members:
Michael R. McGill
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Elaine R. Boehme
Secretary of the Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Kenton L. Alm
Counsel for the District
Page 9 of 10
EXHIBIT 3
RESOLUTION NO. 2010-
RESOLUTION REQUESTING CONSENT TO
CONDUCT ASSESSMENT PROCEEDINGS FOR
SUNNYBROOK ROAD CONTRACTUAL ASSESSMENT DISTRICT NO. 2010-1
The Board of Directors of the Central Contra Costa Sanitary District (CCCSD) resolves:
On May 6, 2010, the Board adopted a Resolution of Intention, a copy of which is attached hereto,
marked Exhibit 1, and by reference incorporated herein as though fully set forth.
All of the property proposed to be assessed lies within the County of Contra Costa. All public streets,
alleys, places, and all land belonging to the United States, the State of California, Contra Costa
County, and CCCSD shall be omitted from assessment because it has been determined that no
special benefit will be conferred on any such land within the proposed Assessment District.
Contra Costa County will, in the opinion of the Board of Directors of CCCSD, be benefitted by the
improvements referred to in the Resolution of Intention, and the purposes sought to be accomplished
by the work can best be accomplished by a single, comprehensive scheme of work.
The consent of Contra Costa County, through its Board of Supervisors, is hereby requested to the
formation of the Assessment District described in said Resolution of Intention, to the improvement
described, and to the assumption of jurisdiction by the CCCSD Board of Directors for all purposes in
connection with the formation of this Assessment District, the improvements to be made and the
assessment of property within the boundaries of the proposed Assessment District.
The Secretary of CCCSD is hereby directed to transmit a certified copy of this resolution with the
Resolution of Intention attached and a certified copy of the map showing the boundaries of the
Assessment District to Contra Costa County.
PASSED AND ADOPTED this 6th day of May, 2010, by the Board of Directors of the Central Contra
Costa Sanitary District by the following vote:
AYES: Members:
NOES: Members:
ABSENT: Members:
Michael R. McGill
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Elaine R. Boehme
Secretary of the Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Kenton L. Alm
Counsel for the District
Page 10 of 10
Item No. 7.a.
Proposed Sunnybrook Road
Contractual
Assessment District
No. 2010-1
Curtis Swanson
May 6, 2010
CAD BOUNDARY MAP
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Sunnybrook Road
.~ r Sewer Extension
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. 1,100 feet of 8-inch sewer; 3 MH
.Sewer main cost: $150,000
. Laterals & other costs:$143,000 to
$175,000
. Estimated cost per property without
CAD financing would be $18,326 to
$20,326.
Proposed Sunnybrook Road
.. s CAD Sewer Main Extension
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. Meets CAD formation criteria:
1. At least 5 properties
2. At least 60% are developed properties
3. No more than 2 dwellings on each property
. Potentially serves 16 properties
. 1,100 feet of 8-inch sewer; 3 MH
.CAD Project cost: $150,000
2
Annual Payment Variation
Based on Participation
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. 16 Participants
Financed Cost/Participant: $9,375
a Annual Payment: $1,260
. 13 Participants
a Financed Cost/Participant: $11,540
v Annual Payment: $1,552
. 10 Participants
> Financed Cost/Participant: $15,000
Annual Payment: $2,020
Costs Ineligible for
CAD Financing
., .
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. Connection fee: $5,451
. Lateral sewer on private property:
$2,000 to $4,000 depending on length
and restoration.
. Septic tank abandonment: $1,500
. Ineligible costs range from $8,951 to
$10,951 and are paid upfront.
3
Source of Funds for Proposed
.~,:~ , Sunnybrook CAD
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. Staff recommends using Sewer
Construction Fund Reserves for the
proposed Sunnybrook CAD Project.
. Interest rate of 6% generates $51,000
over 10 years.
:. .~ CAD Approval Steps
cs ' f•'
~. Board approves formation of CAD.
z. Board approves the project and
election, overrules protests, and
orders the improvement.
3. Board sets the final assessments.
4
,,Staff Recommendation
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.Approve formation of the proposed
Sunnybrook Road CAD No. 2010-1.
. Adopt 3 resolutions.
5