Exh 8CAGENDA ITEM #$C
° JANUARY 24, 2005
CITY OF ATLANTIC BEACH
. CITY COMMISSION MEETING
STAFF REPORT
. AGENDA ITEM: Policy Options for Requiring Septic Tank Owners to Convert to
the Public Sewer System
SUBMITTED BY: Jim Hanso
,,
DATE: January 14, 2005
BACKGROUND: A short report was made at the January 10~' commission meeting that the
five-year timetable for delayed enforcement of the State requirement to
connect to the City's sewer system was to expire in May of 2005. You
asked to see a list of options to further encourage those owners to convert
to the city system. This report is to provide those options and seek
guidance from the Commission as to which if any should be prepared for
adoption.
' ~ First,. a brief history of the city's septic to sewer policies is in order
. because any policy decisions made must consider not only the group of 53
septic tank owners for which the timetable is expiring this year as well as
° ' ~ many others that will be in similar situations in future years. Florida State
Law requires septic tank owners to connect to a publicly owned sewer
system within one year after the availability of that system In 1999, there
' ' were 279 septic tank owners with public sewer accessibility in Atlantic
Beach. Septic tanks can often create serious environmental concerns,
particularly if they are located in close proximity to shallow wells used
either for irrigation or drinking water. However, the cost to convert from
a septic tank to the City sewer system is usually several thousand dollars
and can often impose a major financial impact on property owners. With
these factors in mind, and after considerable public discussion, the Mayor
and Commission adopted an ordinance in May 2000 delaying the City's
enforcement of the state law. Septic tank owners were separated into two
groups; those with assessments for installation of water and sewer lines
that they were currently paying and those without assessments. For those
with assessments, the timetable for the delay of enforcement was to be one
year after the expiration of their assessment. There were three groups with
assessments which expire between December 2006 and November 2011.
The second group was those septic tank owners with no assessments.
These were given five years to connect (until May 2005).
The City Commission also adopted by resolution a set of financial
incentives to encourage the septic tank owners to convert to the City's
sewer system as soon as possible. These included loans at 7% simple
interest with a 10 year maximum term. For the first year of the program, .
AGENDA ITEM #8C
, JANUARY 24, 2005
• - ,the maximum amount of the loan was not taped, although thereafter there
was to $3,000 limit. City staff also offered various assistance to the
owners in finding plumbers, getting quotes and otherwise managing the
process of conversion.
After adoption of the ordinance and resolution, letters were sent to each of
the septic tank owners to explain the City's new policies. Follow-up letters
have recently been sent to those who are on the five-year timetable. The
program has been,very successful so far in reducing the number of septic
tanks in use from 279 to 169. Only 53 of the remaining 169 are on the
five-year schedule, There will be an additional l I6 septic tank customers
required to convert to City sewer system in future years.
There are seven options identified for the financing incentives as well as
one recommendation on~how to go about enforcing the state law as
follows;
1) Do nothing more than the current program which allows for a
• ' loan up to $3,000 with a rate of 7%. The average cost for the septic
to sewer conversion, including the City's tap and impact fees, is
usually aver $4,000 per household. For this reason, and because
'•the 7% rate is higher than one could currently get on a second
• ~ mortgage, very few of these loans have been made in the last
,' .''couple of years. Unless interest rates increase so that the 7% rate
• ~ ~ becomes more attractive, we could anticipate that not very many
people would take this program in the future except those who may
have credit problems and cannot obtain other funding. There would
be relatively little impact on the City's budget.
2) Lower the interest rate; a lower interest rate would encourage
more people to use the City's financing program. We currently
earn about 2% on the City's invested money. An initial 3% interest
rate would reasonably be estimated as the City's "cost" for the
Ioans anticipating that there is some administrative costs that should
be recovered. Market interest rates may go up and the City could
take on substantial risk by setting a flat rate of 3%. Setting an
indexed rate at either prune +1% or the City's current rate on
investments +1% would be a fair way to lower these rates for both
the City and our customers. The "worst case" budget unpact to the
City would be if all 169 of the remaining septic tank owners were
to use the city's loan process and over $500,000 could be loaned
out and paid back in monthly installments over ten years. The
conversion cost includes the City's sewer impact fee of $1,250 so
over $200,000 would immediately be returned for a net out-of-
pocket amount of about $300,000.
3) Raise the cap on the loans; if most of the septic tank conversions
run in the $4,000 to $6,000 range, then raising the maximum loan
to accommodate these higher costs makes good sense. This would.
AGENDA ITEM #8C
JANUARY 24, 2005
' ~ probably only be done if the previous option to Iower the rate was
also implemented. The maximum financial impact of this, using
the same 169 customers and a loan amount of $5,000 each would
amount to initial loans outstanding of approximately $845,000.
. - After the impact fees described in the last option, the net would be
$634,000. The most probable scenario for the number of loans
wauld be far less.
4) Raise the term of the loan up from ten years. This is a possible
way to minimize the financial impact on the customers. By
spreading the~paymenfs out longer, the monthly payment would be
lower much the same as the difference between a 15 year and 30
year loan on a house. The financial impact to the City's budget
would be similar to the estimates in the previous two options, but
the balance outstanding would run for a longer time.
' S) Use CDSG Funds; The City has used block grant funds for eight
income eligible owners in the past. Realizing that the five-year
timetable far the first group was upcoming, and with many of these
' living in the CDBG eligible area, the budget this year was set at
$40,000 for assistance in this area. The budget impact is that we
: ,' ,:.'`have $40,4001ess to utilize in other CDBG eligible projects.
.. ~ : ;6~~ 'Loan with Lien on Home; The current financing program requires
loans to be paid on monthly installments on the customer's utility
' ~ ~ ~ bills. This allows for the City to cut offwater and sewer service if
the bills go unpaid. A different option would be to issue loans with
separate payments. Liens could be placed on the homes and the
homeowners could be given the option of either making regular
payments or making no payments at all until the house is sold. The
homeowners could minimize their cost by paying only the regular
monthly sewer bill and delaying the loan repayment until the house
is sold. The City would have~to~ agree to wait for payment until the
property changes hands. In this scenario, the financial impact in
total dollars could be the same as listed in previous options, but the
amount of time that the loans would be outstanding could be much
. longer. To see that the City does not lose money in the process,
and because of the long-term nature of this option, it is suggested
that the interest rate be indexed as described in option #2 above.
7) Personal Contacts; Letters have recently been sent to the
remaining 53 customers whose tunetables expire this May, City
staff has only had personal contact with 17 of those. Once the City
Commission has made decisions on the final policy changes and
enforcement, personal contacts with the remaining owners may be
beneficial.
Enforcement; Enforcement of City ordinances as set forth in the
Code is handled by the Code Enforcement Board which has the
AGENDA ITEM #8C
JA,i~1UARY 24, 20Q5
authority to impose fines of up to $250 per day as long as the
violation continues. One philosophy for setting the amount of the
fine for failure to convert would be to set fines that equal or slightly
exceed the amount that a customer would otherwise pay for the
loan from the City plus the cost of the regular sewer service. In this
way their penalty for failure to convert would be as much or more
than it would cost to connect to the sewer system The Commission
could request cooperation from the Board in writing or prepare
limits im the enabling ordinance.
.,
BUDGET: Budget implications of various scenarios have been outlined above.
• ~ .
RECOMMENDATYON: The Mayor and Commission should consider the various alternatives
suggested and instruct staff which of these, or others, you would
like to see adopted. Once those instructions have been given, then
amendments to the enabling ordinance and/or resolution will be
prepared.
ATTACHMENT: 1) Ordinance 80-00-61 dated May 22, 2000
. 2} Resolution 00-09 adopted June I2, 2000
~~.,
,..~ ,
. AGENDA ITEM #8C
JANUARY 24, 2005
' ORDINANCE NO. 80 -04-61
AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, FLORIDA,
. A1VlTrNDING CHfiP'TER 22, ti7:'II,ITIF.S, ARTICLE III, WASTEWATER
SYSTEM, DIVISION 2, USE OF PUBIC SEWERS REQUIRED, SEC. 22-74,
INSTALLATION OF TOILET FACILITIES REQUIRED; CONNECTION
OF FAC7LiT'[tS TO PUBLIC SEWER, SETTING FORTR A TIlYIE
SCHEDULE FOR CONNECTION TO PUBLIC SEWERS, AUTHORIZING
TH'E CITY TO OFFER FINANCIAL , 1NCENTIVFS FOR SUCH
CONNECTIONS, PROVIDINGPENALTIES . .FOR FAILURE TO
CONNECT, AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, certain areas of the City where public sewers aze available still have
properties using septic tanks (OSDS: on-site sewage disposal system); and
WHEREAS, certain areas of the City do not yet have public sewers available; and
V~REAS, the City deems that the public health, safety and welfare would be best served
` ' if all properties are connected to.public sewers and that use of OSDSs is eliminated; and
VY'S, certain azeas of the City aze currently paying assessments for installation of
public sewer lines; and
VPE~, the City recognizes the costs associated with converting an OSDS to public
sewer and the benefit to certain property owners of offering financial assistance and incentives for
that purpose; and
WHEREAS, the City is not aware of any specific health hazards or conditions resulting
from existing OSDSs which are detrimental. to the public health, safety and welfare.
NOW THEREFORE, BE IT ENACTED BY T$E CITY COMNIISSION ON
BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA:
SECTION 1. Sec. 22-74 of the Code of Ordinances of the City of Atlantic Beach, Florida,
is hereby amended to read as follows:
"Sec. 22-74. I~os#allation of toilet facilities required; connection of facilities to
public sewer.
(a) The owners of all houses, buildings or properties used for human
occupancy, employment, recreation, or other purposes, and situated within the City
are hereby required at the owner's expense to install suitable toilet facilities therein.
(b) The owners of all properties described in (a) above shall connect
their toilet facilities to public sewer, provided the public sewer is within one
hundred (100) feet or thirty and five-tenths (30.5 meters of the property line, as
follows:
AGENDA ITEM #8C
J~1JARY 24, 2005
(1) If new construction, then immediately.
(2) ~ currently under an assessment for installation of
public sewer lines (whether ahead
shall be made within one 1 Y paid off or still paying), connection
(Assessments in () Y~ after expiration of the assessment.
Ocean Grove expire December, 2
Avenue in May, 2010, and in ~' °n Beach
. Marsh Oaks (f/k/a Section ~ in November, 2011.)
(3) If not currently under an assessment.for installation
of public sewer lines, ~nnection shall be made wi
of the effective date of this Ordinance. ~ five (S~ years
(4) If failure of an OSDS occurs, then immediately. Failure of
an OSDS is defined in Sec. 22.90-(b)~ copy ached. •
(~) The owners of all ro
sewer is not currently available, b P bec~o es available in thae ~ °Ve where public
their toilet facilities to public sewer as follows: tune, shall coruiect
• (1) ~~ ~ety (90) days after date of official noti
the City to do so ~ •Official notice shall be complete upon mailing ~ m
notice to the property owner at the ro
'known address, if any. P Percy address and at his or her last
(2) If failure of an OSDS occurs
~~ ~~~Y• Failure of an OSDS is definedPublic sewer is available,
attached. m Sec. 22-~~), SPY
(d) Failure of any Property owner to connect to public sewer as r
shall •be unlawful and subject to alt penalties, including ~~
following; b, but not limited to, the
(1) General penalty as Provided in Sec. 1-11, copy attached;
(2) Prosecution before the Code Enforcement Board;
(3) Billing for appropIIate services re
connection should have troactive to the date
shall be in been m~e' The amount of any such billing
~rdance with City practice, in at least the amount of
minimum billing for the appropriate services
(e) The City may, from time to
incentives to Property owners to enco hme, offer financial ~~~ and
to public sewer. ~e a more rapid conversion from an OSDS
~Y financial assistance and incentives shall be as set forth in a
resolution duly adopted by the City Commission. "
AGENDA ITEM #8C
JANUARY 24, 2005
+ ~ SECTION 2. The provisions of this Ordinance are controlling. Any parts of the Code of
- ' ~ Ordinances which are either inconsistent or in conflict with this Ordinance shall be controlled by
this Ordinance.
SECTION 3. If any provision of this Ordinance or the application thereof to any person or
circumstance is held invalid, the invalidity does not affect other provisions or applications of the
. Ordinance which can be given effect without the invalid 'provision or application, and to this end
the provisions of this Ordinance are declared severable.
SECTION 4. This Ordinance shall take effect immediately upon its final passage and
adoption.
PASSED by the City Commission on first reading this $ ~- day of ,
. 2000.
PASSED by the City Commission on second and final reading this ' .?~ nd day of
. , 2000.
ATTEST: ~ ~ ,
MAZfREEN~ KING
• City Clerk •
A ved as .tn form and correctness:
Ar.~v c~~~Er~, EsQu1x~
City Attu
' AGENDA ITEM #8C
JAi~IUARY 24, 2005
• • ~ RESOLUTION NO.00-U9 `
.. ,
A RESOLUTION OF THE CITY OF ATLANTIC BEACH, FLORIDA,
• ~ ADOPTING THE SEPTIC TANK CONVERSION ASSISTANCE POLICY,
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Commission on May 22, 2000, passed and adopted Ordinance No.
SO-00-61, which ordinance requires, among other things,, connections from private septic systems
' to public sewer systems, and .
WHEREAS, Sec. 1(e) of said ordinance authorizes the City to offer financial assistance
' ~ and incentives to property owners by resolution; and
WHEREAS, city staff has developed a set of policies for the City to use as a guideline for
assisting property owners who must comply with the provisions of said ordinance.
. NOW THEREFORE, be it resolved by the City Commission of the City of Atlantic Beach
as follows:
SECTION 1. 'The attached Septic Tank Conversion Assistance Policy is hereby adopted.
' ~ SECTION 2. This Resolution shall take effect immediately upon its final passage and
.. adoption.
PASSID by the City Commission this ~~~day of Z~Zvr~ , 2000.
ATTEST:
Maureen King; City 1 k
Approved as to form. and correctness:
ALAN~~ 3,LNSEN, ESQUIRE
City A ey
AGENDA ITEM #8C
JANUARY 2~3, 2005
6A
3une 12, 20(
City of At~an~ic Beach, Florida "
..
Septic.Tank Conversion Assistance Po1~cy
..~
Mandatory Conversion from Private Septic Systems to the Public Server System
The following information is provided as as outline of the City's policies to accommodate those
property owners chat aze required to' convert from a private septic system to.the City's public
sewer system. These policies maybe amended or modified by the City Manager as needed. '
Property Owners affected will be informed by certified letter, from the City Manager, of the
requirement to connect to the public sewer system. If assistance is requested, Property Owners
will be advised to contact the Public•Works Department, during regular working hours (7:30am
to 4:30pm; Monday thru Friday).
This-coaversi6n can be accomplished with varying degrees of City provided assistance. The City
offers the ,following assistance to those Property Owners affected by the requirements to connect
to the City',sphblic system.
" ~ No Assistance: For those Property Owners wishing to make the conversion, but do
not desire the City's assistance with either the contracting of the
work or funancing, they may follow the normal process of
contracting a plumber and securing the appropriate permits
themselves.
Contracting Assistance: For those Property Owners who for any reason would like the City
' to assist with the contracting of plumbers and permit process for
them, the City will offer this assistance from its Public Works
Department. (SEE CONTRACTING )
' Financing Assistance: For those Property Owners who far any reason~would like fuiancial
' assistance with the conversion, the City is prepared to enter into
voluntary assessment agreements to finance the cost of the
conversion. {SEE FINANCING)
Both: For those Property Owners who for any reason would.likc
assistance with both the contracting and financing of the ,
. ~ conversion, the City offers a complete.turnkey package to
accomplish both.
4'
AGENDA ITEM #8C
JANUARY 24, 2005
6A
June 12, 2000
• Conversion from Private Septic System to Public Sewer System
• Contracting Assistance Policy
• •
.. The following policies will be adopted is conjunction with the City Commission's adoption of
Ordinance 80-00-til.
• 1. All Property Owners required to convert from a private septic system to the City's public •
` ' sewer system will be notified by certified letter of the program and of its availability upon •
' the passage of the authorizing ordinance. ,
2. The City will provide assistance in the selection of qualified contractors to work with the
City Public Works Department in expediting the conversion process. The contractors
• will be hued by the Property Owner, not the City. The City will assist in resolving any
disputes that may arise due to the City's involvement in the process.
.3. Qualified Property Owners must submit an application to receive contracting assistance,
' " _ The process is intended to assure that Property Owners are fully educated_on the process
and -agree to the terms and conditions. The City will also provide a rough estimate of the
total cost of the conversion to the Property Owner to assure an understanding of the
' magnitude of the commitment.
4. `Approved applications will be batched in economically feasible groups and bundled as
Official City of Atlantic Beach Bid Specifications, after which the City will then proceed
' to advertise and collect bids from certified plumbers. All bids will include permit fees as
well as an additional S% administration fee which will be passed onto the Property
Owner.
S. The Property Owner will be given notice of the bid price obtained for abandoning their
septic system and to connect to the public sewer system. At this time the Property Owner
will have the option to proceed or to withdraw their application.
6. No'contracting work may proceed without approved permits and no work is to be
• performed without the payment of all fees.
?. The City will offer financing. (SEE FINANCING POLICY)
' ` 8. The Public Works Inspector will answer any questions for homeowners during '
• construction, provide key inspections, and arrange inspection by the Building •
Department
9. The Building Department will be responsible for the final inspection.
10. For Property' Owners who are not on City water, a City water meter is to be installed on
AGENDA ITEiYI #8C
JANUARY 24, 200
me pnvate weu ann the Property Owner must agree to grant access for rending this meter
as a basis for billing sewer services:
11. The Property Owner will~pay. $85 for the water meter installation. The meter will remain
City property.
. ,, ..
12. The Building Department will be zesponsible far retaining aI1 •documents related to the
conversion in the permanent building files as a matter of public record.
l3. The final inspecfion report will be copied to the•Finance Departmentfor entry into the
Utility Billing system. .
14. The Property Owner or Tenant will be charged for sewer service beginning in the
following month