Apr 28 2012

Sewers: Straightening Out the Confusion

What is fact?   What is fiction?  –  

Without a commonly shared base of information on Piedmont’s sewer requirements, community discussion becomes difficult and informed decisions cannot be made by voters or Council members.  In the interest of creating a shared factual basis within the community on sewer issues, excerpts from the Piedmont Post article of February 15, 2012 are followed by facts.


  1. Intended Purpose of the Sewer Surcharge?
  2. The EPA Mandate
  3. The Vactor Truck Required – Yes or No?
  4. Enough Money to do Mains Replacement:  Now or Future
  5. Sewer Work Halted?
  6. Budget Authority:  First Yes, Then No
  7. Sewer Mains Remaining:  33% or 40%?
  8. Possible EPA Waivers?
  9. MTRC Sewer Recommendation – Why Not Unanimous?
  10. Use of Sewer Fund Revenues
  11. The History of Sewer Replacement
  12. A Choice of Future Time Frames


1. Intended Purpose of the Sewer Surcharge

Confusion:  “The Measure A Surtax was not intended to fund ……repairs to sewer mains, . . . Measure A was put on the ballot to pay for monitoring of the sanitary sewer system for leaks and testing its integrity . . . .”

  • Fact: The stated purpose of Measure A, as described by the enabling ordinance and voter information pamphlet, was to fund sewer rehabilitation and storm drain work, in addition to new Environmental Protection Agency (EPA) costs.
      • The Voter Handbook information stated “The City of Piedmont must comply with the 2011 EPA order requiring additional rehabilitation, reporting and monitoring of the city’s sewer system.”
      • The surcharge ordinance also permitted the use of the $1 million in annual revenues for storm drain maintenance.
      • The cost analysis of the EPA mandates by the City’s consultant included annual sewer main rehabilitation costs  ($460,000 per year) as well as new annual EPA monitoring and reporting ($164,000 per year).

2.  The EPA Mandate

Confusion: “Measure A was put on the ballot to pay for monitoring of the sanitary sewer system for leaks and testing its integrity, as  . . . required by a 2009 U.S. District Stipulated Order mandated by the U.S. Environmental Protection Agency.

  • Fact:  A 2011 Federal District Court Order requires Piedmont and other cities to submit in July 2012 a plan for sewer maintenance and rehabilitation.  The plan will cover the next 10 years, but does not require the City to complete sewer mains rehabilitation within 10 years.
  • Fact: Measure A asked voters to approve a 10 year sewer surcharge tax generating $1 million per year in revenues.  Total new EPA monitoring/reporting costs were projected by the City’s consultant  $164,000 per year.   One-time charges for consulting costs ($700,000) and a vactor truck ($400,000 if needed) were projected.
  • Fact:  The EPA required a plan for mains replacement work over the next 10 years, but mains replacement was the reason for the current $2 million per year Sewer Fund tax revenues, rather than a new cost.  See City Consultant Report; see PCA article on new EPA Costs.

3.  The Vactor Truck:  Required or Not Required?

Confusion:  “Among other requirements, the mandate demands that Piedmont purchase its own vactor truck – at a cost of $400,000 – which allows for capturing video footage of underground pipes.”

  • Fact: Purchase of a vactor truck is not required by the EPA.  But Piedmont is required to evaluate its need for a vactor truck to mitigate inflow and infiltration of storm drain water into the sewer system. 
  • Fact:  The need for a vactor truck is not certain.  Piedmont had 13 sewer overflows in 2005 prior to any major rehabilitation.  It had only 3 during 2010 after rehabilitation phases 1, 2 and 3.  An additional 12.5% of mains were replaced in 2010.  
  • Fact:  A vactor truck is not needed to video pipes; it is used to clear pipes or vacuum up overflows.  It has a suction vacuum pump to suck up liquid and debris into its tank.  Although a vactor truck can carry a video camera, that is not its primary function and the City already has video camera equipment to video sewer lines.  The need for a vactor truck is currently being evaluated by the City Council.

4. Enough Money to do Sewer Mains Replacement:  Now vs. Future

Confusion: “There is not enough money to incur any more debt for the replacement of mains,” explained Grote.”

  •  Fact: While Phase 5 cannot be initiated in 2012, it can be completed in a future year.  A gap of several years between phases is not unusual.  For instance, a 4-year gap occurred between phase 3 and phase 4.  In addition, as of 2023 the city will begin retiring its debt service on phases 1, 2 and 3.
  • Fact:  Current sewer revenues are $2+ million each year.  Total debt service for previous phased work is $554,000 per year (including recent phase 4).   An annual $1 million is currently “transferred out” of Sewer Funds to the City’s General Fund.  Remaining funds are available for sewer rehabilitation.
  • Fact:  the $1 million annual “transfer out” of the Sewer Fund to the General Fund is for sewer maintenance and various non-sewer tasks.
  • Fact:  Sewer rehabilitation/repairs/emergency work is typically performed by outside contractors.  In house employees perform sewer/storm drain maintenance work.  Only in-house work is reflected in the $1 million charge to the Sewer Fund.
  • Fact:  Contemporaneous time records on sewer/storm drain tasks performed by in-house city employees are not kept.  The charge to the Sewer Fund is budgeted at the beginning of the year; actual time on sewer and non-sewer tasks is roughly estimated at year end. (E.g. 90% or 20% of time.)
  • Fact:  The charge to the Sewer Fund for maintenance and non-sewer tasks has continued to increase despite completion of 4 out of 7 phases of sewer replacement.
    • Many years ago, the charge was a flat $200,000 per year
    • From 2000-2006 the charge was $600,000-700,000.
    • Since 2006 the charge has increased to $900,000-$1 million.
    • Draft SSMIP cost projections (at p. 16) increase the maintenance/administrative/supervision charge by $200,000 compared to FY 2010-11.  2012-13 projections budget it a $900,00 for the next 5 years.

5.  All Sewer Work Halted?

Confusion: “Work on sanitary sewer system is halted.”

  • Fact: The gradual replacement of all City sewer mains has been ongoing for over 2 decades and can continue with existing revenues.  Current funds allow the continuation of this replacement program.  Options include:
  • replace up to 2% of sewer mains per year with up to $640,000 available each year for this purpose
  • complete work in phases, as planned, but over a longer period than 6 years
  • replace the worse 14,500 of lines all over the city immediately in a revised Phase (designated “5A”) in order to minimize future emergency repairs. and replace the remainder at 1-2% per year.
  • Fact:  The City’s Draft Sewer Plan now reflects on-going annual work of 1% per year, rather than committing the City to large phases, and is expected to be accepted by the EPA due to the fact that Piedmont is approximately 20 years ahead of any other city in its sewer replacement plan.

Faster replacement is possible with current sewer tax funds if, in the future years, a choice is made to direct more sewer funds towards mains replacement, and less to other city functions.  Currently, half of all sewer funds ($900,000 per year)  are diverted to uses other than sewer mains replacement (i.e. street sweeping and storm drain maintenance) and an additional $300,000 per year to emergencies. 

6.  Budget Authority:  First Yes, Then No

Confusion: “… immediately following last Wednesday’s election, City Administrator Geoff Grote called for all work being done on the sanitary sewer system to come to a halt.”

  • Fact:  Work on phase 5 has been halted, but annual general sewer projects in the amount of $600,000 are proceeding.

Shortly before the February 7, 2012 vote on the surcharge measure, staff requested and the Council authorized the expenditure of close to $1 million in Sewer Fund monies for phase 5 work and 3 other sewer projects:

      • $330,000 to begin phase 5 engineering design work  (HALTED)
      • $160,000 on Calvert Court/Dudley before street re-paving occurs;
      • $150,000 on Beach playground for mains replacement and storm drain replacement before new asphalt is installed with School District bond monies; and
      • $300,000 on El Cerrito/Hillside/Magnolia/Witter for unspecified emergency mains replacement.
  • Fact:  The Budget Advisory and Financial Planning Committee has had discussions with staff on a revised “Phase 5A“.  The revised phase would replace 14,5000 feet of the worst remaining sewer lines all over town. Staff anticipates this revised plan of work would significantly minimize emergency sewer repairs compared to replacement of mains in 3 separate areas of town sequentially.

7.  Linear Feet of Sewer Mains Remaining:  33% or 40%?

Confusion:  “according to Grote ‘nearly 60 percent of the city’s terracotta sewer lines have been replaced over the last 20 years..”

  •  Fact:  Sub-basins containing 40% of the city mains have not yet been worked on, but only 33% of sewer mains in those sub-basins need replacement.  Based on actual linear feet, 67% of all lines have been replaced throughout the City, and 33% remain

(87,000 out of 260,000 total feet of sewer lines require replacement.  These figures are provided by staff in Tables 6 and 10 in Exhibit 11 to the MTRC Sewer Service report, but not calculated).


8.  Possible EPA Waivers?

Confusion: “Piedmont could have asked the EPA for some leniency in the monitoring and testing program if the city had been able to show that it was continuing work on replacing sewer mains.  However, that is no longer an option.”

  • Fact:  Prior to the election, there was no information disseminated to the public that new EPA monitoring/reporting requirements might be avoided for any reason.
  • Fact:  Piedmont has the ability to ask the EPA for permission to count phased work toward its required annual work, and anticipates approval of this request.  (The stipulated order omits any specific provisions for doing work in phases.  Staff explained this was because Piedmont is the only city involved in the EPA litigation contemplating future “phased” work.)

9.  The MTRC Sewer Recommendation – Why Not Unanimous?

Confusion: “Confusion abounds” . . . “Despite having the unanimous support of the five-member City Council and an early unanimous support of the nine-member Municipal Tax Review Committee, it [Measure A the Sewer Surcharge Tax] barely generated 50% voter approval. ”

  • Fact:  The Municipal Tax Review Committee and City Council did not have complete information and court documents; City staff were unclear on some facts; some residents were left with the impression that Piedmont was being required to replace its sewer mains within 10 years, rather than being required to submit a 10-year plan for maintenance and rehabilitation.
  • Fact:  With limited information and without court documents, Bob McBain and Ryan Gilbert, the 2 members forming the MTRC subcommittee on sewers, recommended the sewer surtax to the full Tax Committee.  After being shown additional documents, one of the two members (Gilbert) reversed his recommendation.

10.  Legal Use of Sewer Revenues

Confusion:  “The City Council should clarify the definition of legal uses of the Sewer Fund, particularly the question of whether storm drains and sewers may be constructed and maintained with Sewer Fund money.” (2011 MTRC Report at p. 8) 

  • Fact:  Approximately $1 million is charged against sewer tax revenues each year for purposes other than sewer mains replacement.  This represents half (50%) of annual Sewer Tax revenues of $2 million.
  • Fact:  Transfers out from the Sewer Fund to the General Fund for sewer maintenance and other non-sewer charges have increased from $600,000 to $700,000 per year prior to FY 2006 to the larger amount of $900,000 to $1 million since 2006, despite completion of 3 phases of work as of 2006 and phase 4 in 2010.
  • Fact:  City staff acknowledges that non-sewer items (e.g. street sweeping, storm drain maintenance, EBMUD fees, etc.)  have traditionally been charged to the Sewer Fund.
  • Fact:  Authorization to expend current sewer funds on non-sewer activities has not been provided to the public (but a PCA request for this information is pending).  The rejected Measure A Sewer Surcharge did provide authorization to use its  $1 million in new sewer surcharge revenues for non-sanitary sewer items.
  • Fact: Contemporaneous employee time records to support how much time they charge against the Sewer Fund are not maintained by the Public Works Department.  Time is budgeted at the beginning of the year and charged at the end of each year based on general estimates.
  • Fact:  Only fifty percent of the time of 4 maintenance workers is estimated to be spent on “sewer and storm drain” maintenance, but 100% of their time has been charged to the sewer fund (reduced to 90% in 2012-13.)  On the other hand, 30% of the time of the Public Works Director is charged to the sewer fund and staff asserts this may underestimate time spent on sewer issues in some years.
  • Fact:  Supervision, administrative, and indirect costs are being charged to the Sewer Fund.  Legal costs are not fully charged to the Sewer Fund.  Allocation of these charges  to the Sewer Fund represents a policy decision on city priorities.

11.  The History of Sewer Replacement

In the 1980’s sewer rehabilitation was undertaken periodically, using accumulated sewer tax funds ($700,000 per year) and grants.  The “transfer out” to the General Fund for maintenance was only $120,000 per year.

Eventually a long-term, 7-phase plan was envisioned, using low-interest State loans, with the debt obligation being paid by the Sewer Fund.   Added impetus was provided for this plan when Piedmont was faced with an EPA Cease and Desist Order to complete certain work.

In 2000, the Sewer Tax was tripled by voters to provide $2 million annually to fund this vision, with an automatic escalator for inflation.  Work was done on a priority basis, with the most deteriorated lines replaced first.

To complete the EPA required phases 1, 2 and 3 as quickly as possible, low-interest State loans were used.  Debt service is paid by the Sewer Fund.  Payments will begin being retired in 2023.  Phases 1, 2 and 3 were completed by 2006.   This satisfied the EPA “cease and desist” order against Piedmont.

In 2006, a camera survey was authorized to determine if the City needed to continue with the remaining phases of sewer rehabilitation, including areas of newer sewer mains in better condition such as the St. James area.   Although there is no record of a final report, the preliminary results of the survey suggested it would be prudent to continue. (See 2007 MTRC report.)

The City Council authorized staff to obtain a State loan for Phase 4 in 2006.  It was completed 4 years later, in 2010.

The final 3 phases represent the last 40% of the City’s sub-basins that are in the best condition.  Within those sub-basins 87,000 linear feet of mains need to be replaced.  This represents 33% of the City’s total 260,000 linear feet of sewer lines.

12.  A Choice of Future Time Frames

The final phases of sewer rehabilitation can be completed over a shorter time frame if a new sewer tax surcharge is passed.  Alternatively, work can be completed over a longer time frame without a surcharge.  Without a surcharge, the Sewer Fund will have the funds to complete annual ongoing sewer projects, as well as complete phase 5 immediately. 

Option 1:  Use State loans to complete work in 3 phases over the next 6 years.  The total cost is projected to be $10.5 million (this includes upfront costs, as well as construction costs).  This option would require an additional sewer tax surcharge and would be the most costly.

Option 2:  Use State loans to complete phased work, but stretched out over a longer time frame.   Depending on the period of time, this option could avoid both an additional surcharge and a reduction in the $1 million charge to the General Fund.

Option 3:  Replace 1-2% of mains annually, rather than in large phases.  Based on 33% of lines remaining, this could take 17 years or longer.  It would not require an additional sewer surcharge, nor a reduction in the $1 million charge to the General Fund.

Option 4:   The cost to immediately replace  all remaining mains in one large phase with one State loan was reviewed by the MTRC, but determined to be not financially feasible, even with an additional tax surcharge.  Upfront costs (e.g. for engineering) together with a continued $1 million charge to the General Fund were too large.

New Option 5:  Immediately replace the 14,500 linear feet of the most problematic lines all over town immediately as phase “5A”.  This would not require a surcharge and is anticipated to minimize the need for future emergency mains replacement work.

An informed decision requires clear information laying out the trade offs between time frames and cost.  Though Measure A failed by a wide margin, it represents one option among many for proceeding with sewer mains replacement. 

The newly formed Budget and Financial Planning Committee noted the Sewer Fund currently lacks  a reserve cash balance at the present time.  A reserve cash balance in the Sewer Fund of $1 million is considered desirable.  BAFPC pointed out that a transfer in from the General Fund could cover a temporary liquidity shortfall in the Sewer Fund and could be structured as a loan (if emergency repairs* exceed the $640,000 budgeted for mains replacement in any one year).  Alternatively, a reduction in the transfer charge against the Sewer Fund would gradually rebuild the reserve.  A sewer tax surcharge for 1 year could also replenish the reserve with $1 million.

*A large emergency repair can cost $300,000, e.g. if a large section of a primary main line 25 feet below ground under a school requires redesign and replacement, or if a street is undermined and collapses.

Link:  April 16 Council Meeting Discussing Sewers


2 Responses to “Sewers: Straightening Out the Confusion”

  1. Thank you for your thorough examination of this issue. Your analysis helps clear up many questions for Piedmonters.

  2. Another informative and bold piece from PCA. This should be required reading by City Staff. PCA is an important source of factual information especially considering the seemingly endless series of City missteps. How to nudge more residents to read this excellent material?

    Thank you.

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