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Private Sewer Lateral Relocation 4 June 20, 2011 payable in 15 years at an annual interest rate equal to the Local Agency Investment Fund (LAIF) rate currently at 0.52%. Alternatively, the POTW would work with the property owners to execute a Deed of Trust on the property with the loan due and payable upon of sale or transfer of the property. Two thousand dollar ($2,000) grants may be available to qualifying for low income households. 2) Change policy to have POTW fund lateral relocations Maintenance of the lateral would remain the responsibility of the property owners. However, under this option, property owners would be reimbursed for the full cost of the private lateral reconstruction. This option would require an amendment to the San Leandro Municipal Code. Further, because reimbursement for the private lateral reconstruction is not supported by the current rate structure, implementation of this option would require the ratepayers to do a Proposition 218 majority protest and hearing procedure. Alternatives and Considerations Option 1: Legal review of option 1 finds that it is viable. It maintains San Leandro Municipal Code section 3-14-640, whereby the operation, maintenance and repair of private sewer laterals are the responsibility of the property owner. Staff implementation of Administrative Code Title 8 Chapter 11 is confirmed to provide additional financial assistance options, namely a low interest loan option with extended payback periods, a payback upon sale or transfer of option, and grant funding for qualified low income households. Option 2: Implementation of option 2 will require several steps to achieve legal and operational compliance. First, the City should conduct a Prop. 218 protest hearing and procedure to re - purpose the rates, and account for a rate increase, if necessary, to establish the use of the funds. A rate study and Engineer's report will be required to provide the rate payers full information. After the Prop. 218 procedure is completed, and assuming a majority protest against the rate re- purpose/increase is not achieved, the Municipal Code will require revision to show that when sewer relocation is required, responsibility for the costs for reconstruction of the private lateral is transferred to the City. The City Council should not amend the Municipal Code and establish the tenets of option 2 until a Prop. 218 procedure is completed. Reverting to the policy before approval of Administrative Code Title 8 Chapter 11 is not recommended, because it eliminates the mandated notice procedure, construction of the private lateral section in the public right of way, and the financial assistance option. Current City Council Policy Ensure well-maintained sewer facilities.