Sewer Renovation to Resume
– Piedmont will continue to meet EPA sewer requirements by borrowing from existing City funds and the California State Water Resources Control Board. –
On Monday, October 6, 2014, the City Council has on their agenda a plan to resume work on Piedmont’s Sanitary Sewer System.
Controversy has surrounded the Sewer Fund in recent years. When incorrect information developed by the City and falsification of requirements of the EPA was revealed, the Sewer Tax was defeated by voters in 2011.
Further information dismayed some residents when it was learned that Sewer Fund money is used to pay for purposes unrelated to the sewers, including street sweeping even during dry weather. The City has justified the use of the Sewer Fund as vital to keeping the storm water drains clear.
In May of 2014, the City Council had proposed a ballot measure requiring voter approval of a Real Property Transfer Surcharge Tax for sewer replacement. However, on June 24, 2014, Alameda County reported an “historic and unanticipated” increase in Piedmont’s Real Property Transfer Tax, making the surcharge unnecessary. City Administrator Paul Benoit advised the Council to abandon the surcharge in favor of borrowing from the City’s funds.
In June 2014, the positive position of the General Fund with an unaudited ending fund balance of $4,498,390 amounting to reserves of 20.9% of expenditures allowed for an additional $819,000 to be transferred to each of the Facilities Maintenance Fund and Equipment Replacement Fund.
Significant improvement in Piedmont’s financial condition has been attributed to prudent use of City revenues, large increase in Real Property Transfer Tax proceeds, and employee contributions to their retirement benefits.
The much belabored sewer renovation program will resume. Internal and external loans will provide the additional funds by borrowing $600,000 from the Facilities Maintenance Fund ($2,111,246) and $200,000 from the Equipment Replacement Fund ($2,861,650) for a total of $800,000. The City will continue the practice of utilizing loans from the State Water Resources Control Board to augment funding.
The City Council is being asked to approve loans from the City’s funds with the following conditions:
– Simple interest rate based on the Local Agency Investment Fund (LAIF) rate, not to exceed 1.0%.
– Interest only payments during the replacement of the sewer system. Principal and interest payments would begin approximately FY 2027-28, when Phase VII loan payments begin. Under this schedule the loan is to be retired by FY 2034-35. Council can authorize the loan to be repaid sooner, assuming the Sewer Fund has sufficient funding.
Read the full staff report.
Specific sewer mains will be replaced.
The second part of moving ahead with sewer work involves the design and implementation of the work. Previously, the Council adopted a Risk Management Policy to assure that contracted work does not create conflicts of interest between designers, engineers, construction contractors, and project managers. The contract on the Council agenda has been drafted with that intention. The sewer engineers (Coastland Engineers) appear to be sole sourced.
When the City renovates the sewer mains in an area, property owners are required to replace any faulty laterals (the pipes going from their property to the sewer main.) The laterals cost thousands based on length and piping complexity.
To see if your property is in the Phase V project click here to view the map.
This Phase V project will encompass work in Sub-Basins W2, W3, G1, H1, H1A and previously identified high-priority pipes throughout the City for a total of approximately 33,000 lineal feet of sanitary sewer pipe replacement.
The agenda item is: Consideration of the Preparation of 35% Design Documents for the Phase V Sanitary Sewer Project and Authorization to Apply for a State Fund Revolving Fund Loan for the Project < Staff report
The Council meeting will be held in City Hall, recorded, broadcast and open to the public. This item is on the 7:30 p.m. agenda.
