HomeMy WebLinkAbout03.a. Review Draft Position Paper and conduct biennial review of Board Policy BP 010 - Contractual Assessment DistrictsPage 1 of 4
Item 3.a.
DCENTRALSAN
MEETING DATE: DECEMBER 3, 2024
BOARD OF DIRECTORS
POSITION PAPER
DRAFT
SUBJECT: REVIEW DRAFT POSITION PAPER AND CONDUCT BIENNIAL REVIEW
OF BOARD POLICY BP 010 -CONTRACTUAL ASSESSMENT DISTRICTS
SUBMITTED BY: INITIATING DEPARTMENT:
MICHELLE PEON DEL VALLE, ENGINEERING ENGINEERING AND TECHNICAL SERVICES -
ASSISTANT I I I PDS-RATES AND FEES
THOMAS BRIGHTBILL, SENIOR ENGINEER
REVIEWED BY: DANEA GEMMELL, PLANNING & DEVELOPMENT SERVICES DIVISION
MANAGER
GREG NORBY, DEPUTY GM - ENGINEERING & OPERATIONS
ROGER S. BAILEY, GENERAL MANAGER
ISSUE
The Board of Directors (Board) must review and approve revisions to Board policies.
BACKGROUND
As part of the biennial review of Board Policy BP 010 - Contractual Assessment Districts consider the
following proposed revisions:
Minor clean-up of terminology such as "participating property owner" and "subsequently participating
property owner" in order to make the policy consistent with other CAD -related documents.
The addition of language that allows staff to extend the financing term from 10 years to 20 years if
the anticipated annual payments exceed an initial threshold of $7,500 per parcel, based on costs
from the two CADs where the Board has already extended the term to 20 years.
Re-inserting language that a property owner may finance only one parcel through the CAD program
at any given time.
Attachment 1 includes the proposed revisions.
ALTERNATIVES/CONSIDERATIONS
The Board may choose not to consider the proposed revisions or may direct staff to make additional
changes to the policy.
December 3, 2024 Regular ADM IN Committee Meeting Agenda Packet - Page 3 of 102
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FINANCIAL IMPACTS
None.
COMMITTEE RECOMMENDATION
The Administration Committee reviewed this matter at its meeting on December 3, 2024 and
recommended
RECOMMENDED BOARD ACTION
Approve updated Board Policy B P 010 - Contractual Assessment Districts.
Strategic Plan re -In
GOAL ONE: Customer and Community
Strategy 1— Deliver high -quality customer service
ATTACHMENTS:
1. Updated BP 010 Contractual Assessment Districts (Red lined)
December 3, 2024 Regular ADM IN Committee Meeting Agenda Packet - Page 4 of 102
Page 3 of 4
Number: BP 010
Authority:
Board of Directors
Effective:
January 7, 1999
Revised:
December 19, 2024
Reviewed:
December 3, 2024
Initiating Dept./Div.: Engineering/Planning &
Development Services
BOARD POLICY
CONTRACTUAL ASSESSMENT DISTRICTS
PURPOSE
To encourage residential property owners to connect to the public sewer system. The
Contractual Assessment District (CAD) 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 CAD program is intended
for residential properties, primarily owner -occupied, and not commercial properties.
POLICY
This policy statement establishes the criteria for formation of CAD projects. Nothing in
this policy is intended to bind Central San 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 a
CAD.
FUNDING
CAD proponents are required to hire an engineer and pay the initial engineering costs
for the design of the improvements. Upon approval of the CAD by the Board of
Directors, funding for construction and inspection of the sewer improvements and
reimbursement of reasonable initial engineering costs will be provided by Central San.
This money is repaid by participating property owners, either in a lump sum at the
completion of construction or in 10 annual installments. If the annual per -parcel cost
exceeds $7,500 per parcel, staff may extend the term from 10 to 20 e�The annual
installments include a nominal interest rate, are secured by a lien on the property, and
are collected on the property tax bill. Subsequently participating owners Subsequent
font
pal4iGipaRt- who connect to the sewer main within 20 years repay their share of the
CAD costs to the other participating property owners a#ic-�at the time of
connection.
December 3, 2024 Regular ADMIN Committee Meeting Agenda Packet - Page 5 of 102
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Number: BP 010
CONTRACTUAL ASSESSMENT DISTRICTS
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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, Central San 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 Central San's CAD assessment financing
program, the proposed mainline sewer extension project must meet the following
criteria:
A minimum of three properties must be directly tributary to the proposed CAD
facilities.
2. A minimum of 60 percent of the properties directly tributary to the proposed CAD
facilities must have existing homes served by septic tank systems.
3. A participant parcel may not have more than two dwellings to participate in
a CAD.
4. Participating property owners are limited to use of the ten-year annual
assessment payment option for a single parcel at any given time. If a person(s)
owns two or more parcels in the same CAD or different CADs, that person(s)
may be a participant for more than one parcel but will be eligible for the annual
assessment option for only one parcel. The shares of the CAD expenses for the
other parcels must be paid by the lump sum payment option.
[Original retained by the Secretary of the District]
December 3, 2024 Regular ADM IN Committee Meeting Agenda Packet - Page 6 of 102