HomeMy WebLinkAbout02. Approve updated Board Policy BP 010 - Contractual Assessment DistrictsO��ENTRAL MEETING DATE: DECEMBER 19, 2024 BOARD OF DIRECTORS POSITION PAPER Page 1 of 4 Item 2. SUBJECT: APPROVE UPDATED 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. December 19, 2024 Regular Board Meeting Agenda Packet - Page 11 of 97 Page 2 of 4 ALTERNATIVES/CONSIDERATIONS The Board may choose not to consider the proposed revisions or may direct staff to make additional changes to the policy. FINANCIAL IMPACTS None. COMMITTEE RECOMMENDATION The Administration Committee reviewed this matter at its meeting on December 3, 2024 and recommended Board approval. 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 (Redlined) December 19, 2024 Regular Board Meeting Agenda Packet - Page 12 of 97 Number: BP 010 Authority: Board of Directors Effective: January 7, 1999 Revised: December 3, 2024 Reviewed: December 3, 2024 Initiating Dept./Div.: Engineering/Planning & Development Services BOARD POLICY Page 3 of 4 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 cost exceeds $7,500 per parcel, staff may extend the term from 10 to 20 years. 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 par+;L1�ipawho connect to the sewer main within 20 years repay their share of the CAD costs to the other participating property owners a#iG�at the time of connection. December 19, 2024 Regular Board Meeting Agenda Packet - Page 13 of 97 Page 4 of 4 Number: BP 010 CONTRACTUAL ASSESSMENT DISTRICTS Page 2 of 2 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 10- or 20 -year annual payment option for a single parcel at any given time. If a person(s) owns two or more parcels in the same CAD or in different CADs, that person(s) may be a participant for more than one parcel, but will be eligible for the annual payment option for only one parcel. The shares of the CAD expenses any other participating other parcels owned by that owner must be paid by the lump -sum Payment option. [Original retained by the Secretary of the District] December 19, 2024 Regular Board Meeting Agenda Packet - Page 14 of 97