Sew er Lateral Insurance Repair Program: Rates By: Ben von Harz - PowerPoint PPT Presentation

Sew er Lateral Insurance Repair Program: Rates By: Ben von Harz Council Workshop September 13, 2018

Purpose 1. Provide an update on the Sewer Lateral Insurance Program Rates and provide information in consideration of adding Root Intrusion Removal to the program. 2. Need Council guidance on sustaining current program 3. Need Council guidance on the addition of Root Intrusion coverage

Sew er Lateral Insurance Program • Current program covers repairs to defective portions of private sewer laterals from the exterior building foundation wall to the public sewer, all required street, sidewalk and/or driveway replacement associated with repair, sod or seed for yard repair.

Sew er Lateral Insurance Program • Public vote on April 2009, set maximum charge to $30 annual fee – Implemented August 2009 • Funded by property owners through a $7.50 “current” annual fee; that is paid along with property taxes. • Last revised February 10, 2017 • Repair maximum of $10,000.00 per household Appeal Process for extreme cases • Collected from 26,733 residents in 2017 • Current Reserve Balance: $114,729

Applications/Repairs (as of Aug. 31, 2018)

Application/Repair Trend

Cash Flow Analysis Note: At the current trend, we are going to have a deficit cash balance at the end of 2018.

Proposed Rate – Sustain Current Program • 100% Coverage: $19.00 estimated fee for 3 yrs. • $500,000 reserve in 3 years • 80/20 Split Coverage: $16.75 estimated fee for 3 yrs. • $500,000 reserve in 3 years • ~$3,200 City cost per avg. repair • ~$800 Property Owner cost per avg. repair Decision Point

What is Root Intrusion? Roots enter the sewer lateral • through joints and other defects. Roots can cause defects. • Root intrusion is a cause of • inflow and infiltration of storm water. Root intrusion through sewer • laterals is responsible for 50% of the main line blockages. Current policy specifically • excludes coverage of root intrusion.

Resource Impacts 73 applications received in 2017 • 26 applications denied in 2017, 23 for root intrusion. • 47 repaired in 2017 • 76 applications received so far in 2018 (as of 8/31/18) • 13 applications denied so far in 2018, 7 for root intrusion • 58 repaired • 5 pending repair • Current workload requires a full time position. Proposed • rates cover the cost of full time position.

Program Comparisons City of St. Peters • ~70 repairs a year Average excavation repair cost: $3500 • 80% of repairs involve root intrusion • City of O’Fallon • Average lining cost: $125/ ft • On track for 90+ repairs in 2018 • Annual fee $28/household • Average excavation repair cost: $4000 • Contributing households: 18,600 • Estimated 50% additional calls regarding root intrusion removal Duckett Creek SanitaryDistrict • Average lining cost: $125/ft. • ~70 repairs a year • Annual fee $7.50/household • Average excavation repair cost: $3500 • Contributing households: 26,733 • 80% of repairs involve root intrusion • Average lining cost: $125/ ft • Annual fee $28/household • Contributing households: 23,000

If Root Intrusion is added to program 100% Coverage: • Estimated Program Cost= $704,302 • Calculated annual cost per household to build a $500,000 reserve within 3 years: $29.00/ea 80/20 Split Coverage: • Estimated Program Cost= $577,802 • Calculated annual cost per household to build a $500,000 reserve within 3 years: $24.50/ea.

PWAC Recommendation • PWAC Recommendation on August 15, 2018: – Add Root Intrusion Removal to current program – 80/20 Split Program – Annual Fee: $28/ ea.

Decision on Root Intrusion Consideration Include Root Intrusion into Program: • 100% Coverage: $29.00 estimated fee for 3 yrs. • 80/20 Split Coverage: $24.50 estimated fee for 3 yrs. • $500,000 reserve in 3 years • ~$5,200 City cost per avg. repair • ~$1,300 Property Owner cost per avg. repair Decision Point