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Private Sewer Lateral Relocation 6 June 20, 2011 Public Right of Way Individual lateral construction costs vary based on the width of the right of way, position of the sewer main within the right of way, and main line depth. These costs are expected to average $5,000 and potentially $2,500,000 for the 500 properties that may be impacted. Funding The financial impact to the POTW varies greatly depending on the final option selected. Based on the currently adopted policy, the cost of the sewer lateral construction within the public right way is the responsibility of the POTW and funded as part of the current Water Pollution Control Plant Enterprise Fund (WPCP Fund) — Fund 593. Option 1 would allow for low interest loans from the Water Pollution Control Plan Enterprise Fund to be paid back in full over time. Option 2 would result in the direct expenditure of WPCP funds with no repayment. Total liability is estimated at $2-$4 million. Staff will conduct an analysis of the fund to determine the long-term feasibility of this expense. A rate increase may be necessary to support the unplanned cost. Budget Authority Construction costs and any provided financing for this process would be funded by the WPCP Fund as part of the approved CIP for the sewer main relocation. Under Option 1, the WPCP Fund would be reimbursed for the work on private property under the terms of an established loan program. Under Option 2, the WPCP Fund would reimburse property owners for work on private property. Additional approval by the ratepayers, through a Proposition 218 process, would be required to permit the use of WPCP Funds for construction of private laterals. Tracy A. Vesely, Finance Di ctor Attachments: • San Leandro Administrative Code Title 8, Chapter 11 • Exhibit A - Sewer Main Pipelines Breed/Beverly Area • Exhibit B - Sewer Tributary Area Upstream of "Dowling Triangle Area" CONCLUSION This report provides information pertaining to the presentation and discussion regarding Administrative Code Title 8 Chapter 11 concerning the financial responsibility of reconnecting sanitary sewer laterals. Staff recommends Option 1, retaining the existing procedure with improved financial assistance.