HomeMy WebLinkAbout11/20/2007, C9 - RETROACTIVE REIMBURSEMENT FOR THE VOLUNTARY SEWER LATERAL PROGRAM council November 20, 2007
j agenba REpont
CITY OF SAN LUIS OBISPO
FROM: Department Head: John Moss, Utilities Directs
Prepared By: David Hix, Wastewater Division Manager
SUBJECT: Retroactive Reimbursement for the Voluntary Sewer Lateral Program
CAO RECOMMENDATION
Approve a Retroactive Reimbursement Program for Private Sewer Laterals Replaced by Eligible
Homeowners Between April 2005 and June 30, 2007, and approve an additional appropriation of
$97,500 from Sewer Fund working capital to support this request.
DISCUSSION
Background
The City's Voluntary Lateral Rehabilitation Program was not funded in the 2005-07 Financial
Plan due to severe funding impacts to the Sewer Fund. During this period of time homeowners
who needed to replace their sewer laterals were required to pay for the entire cost of repairs or
replacement. Prior to 2005-07, the Sewer Fund provided up to $2,000 customer reimbursement
and paid the costs for the encroachment permit and/or the City plumbing permit.
On June 22, 2007, Council approved a revised Voluntary Lateral Rehabilitation Program in the
2007-09 Financial Plana This new program provides up to a $1,000 reimbursement and no cost
permits. The estimated total value of the new program is to the customer is $1,300 per lateral
(rebate plus estimated permit cost). An alternative identified in the 2007-09 Financial Plan
request was to retroactively reimburse customers who had repaired or replaced their laterals
during the period of time when the program was unavailable and would have otherwise been
eligible for reimbursement. During the June 22, 2007, budget hearings, Council requested staff
bring back a recommended program for reimbursing those customers.-
Retroactive
ustomers.Retroactive Reimbursement
Consistent with the value of the current program, staff proposes a reimbursement of 50% of
actual costs, up to $1,300 for repair or replacement of the sewer lateral. The retroactive period of
time would be from April 4, 2005, when the past program ran out of funding, to June 30, 2007,
and will require customers to provide proof of the work that was performed including receipts
and/or video inspection records. This information along with the records maintained by the
Engineering and Buildings Division will provide adequate information to allow the Wastewater
Collection System Supervisor to evaluate and make a determination on reimbursement. All other
qualifications will follow the current program guidelines.
Staff estimates that approximately 80 to 100 customers may be eligible for retroactive
reimbursements, but it is unknown how many customers will come forward for reimbursement /
Ca —
Retroactive Reimbursement for Lateral Program Page 2
and have adequate documentation. Staff recommends a deadline of June 30,.2008, for retroactive
reimbursement requests. This allows for adequate time to notice customers, puts a defined
period of time on the program and concludes with the end of the fiscal year. Utilities staff will
announce and advertise the retroactive reimbursement program via the Utilities Department
newsletter, The Resource, the City's website and customer contact. Currently 13 applications
have been submitted for retroactive reimbursement.
FISCAL IMPACT
Total costs for retroactive reimbursement of the lateral program have been estimated at
approximately $97,500. Because of the difficulty of determining the number of reimbursements,
staff has assumed that only 75% of eligible customers will apply for a retroactive reimbursement.
Below is a table that breaks down estimated reimbursement costs.
Table 1. Cost or Retroactive Reimbursement of Lateral Program
Fund Laterals Total
Sewer Fund 75 @ $1300/each $97,500
Total $97 500
There is adequate funding to support this request in the Sewer Fund working capital. Staff is
recommending Council approve an additional appropriation of $97,500 from Sewer Fund
Working Capital to support this request.
G:\UTIL\CAR-CAO Repons\2007 Council Agenda Reports\RetroLateralReimburse CAR.DOC