CITY COUNCIL AGENDA ITEM
Memo Date: July 11, 2022
Agenda Date: July 26, 2022
Prepared By: John A. Walsh, P.E., Utilities Director
Through: Stockton Whitten, City Manager
Requested Action:
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To Provide Direction to Staff for Funding and New Policies, if Necessary, for the Indian River Drive Septic to Sewer Conversion Areas J & K.
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BACKGROUND:
This agenda item was previously reviewed by Council on June 24, 2022 and on July 26, 2022. Portions of the agenda remain the same and portions have been updated with the latest information avaialable.
Two areas within the City of Cocoa along Indian River Drive have been identified for funding form the Save Our Indian River Lagoon (SOIRL) tax adopted by Brevard County. The areas are known as Area “J” and “K” and consist of a total of 92 single family homes that can be elgible for reimbursement to remove their septic systems and replace with a city owned gravity sewer system.
The SOIRL study conducted by Tetra Tech identified 5 major areas of pollutants into the Indian River Lagoon;
1. Stormwater runoff
2. Baseflow/septic, leaking sewer, reclaimed water
3. Atmospheric deposition
4. Point sources
5. Muck flux
SOIRL currently has approved an allocation of approximately $5.6M for 99 lots toward the design, construction of a new gravity sewer system to eliminate existing septic systems assuming 100% participation. However, current cost estimates place the costs of construction of the new gravity system at $6.7 to $8.3M. This estimate does not inlcude homeowner on site costs.
Cocoa engaged a consultant to prepare a preliminary feasibility study to identify more specifically how many homes could be served, if a gravity or pressure force main system would be required and to understand the geology, and the challenges of construction in this area. Upon completion of a preliminary layout for the sewer, a community meeting was held last year for citizens to ask questions and see the proposed scope of work.
The final design and plans are complete. The opinion of probable costs was prepared by the Engineer of Record and the costs vary based on the method of construction used by a contractor to install the sewer mains.
Currently, the 92 lots would be eligible for a total of approximately $5.1M in SOIRL funding for 100% participation per SOIRL Program, Feb 2022. The cost over runs could range from $1.7M to $3.3M to fully construct the gravity sewer mains. This assumes 100% participation of the 92 lot owners and the costs to the city increase as the participation rate decreases. For example, at 70% participation, the city could be responsible to pay an estimated $3.3M to $4.9M of reimbursable costs back to Brevard County.
At the community meeting hosted by Staff and our consultant in November 2020, the project was presented as a potential no cost to the homeowners based on information known at the time. Per our current discussion with Brevard County, the costs for the design and construction of the sewer system are reimbursable and the onsite costs of the homeowner are not reimbursable under the SOIRL program but may be eligible under other grants offered by FDEP or SJRWMD. A survey was conducted in conjunction with the community meeting and of the 40 respondents, 22 homeowners or 55% were not supportive of the project if the homeowner was responsible for costs associated with connecting to the sewer system.
Currently, City of Cocoa Code of Ordinances does not require existing homeowners who have functioning septic systems to connect to the city sewer system. The following items are presented to outline options available to Council to consider. The financial liabilities associated with this project will need to be addressed and the appropriate actions identified for follow up by staff. To address the requirements to connect or not connect and to address shortfall in funding that is not covered by either the SOIRL funding for infrastructure or a future grant from FDEP/SJRWMD for homeowner costs, the following options are available:
Option 1: Withdraw the sewer infrastructure project and let the homeowners submit and qualify for advanced septic treatment funding from SOIRL
If chosen, withdrawing the Septic to Sewer Conversion project will allow all homeowners within the current J and K areas to seek reimbursement for septic replacements if the new septic system meets all the advanced treatment requirements outlined in the SOIRL technical report. Brevard County Natural Resources Department will require a letter from the city to withdraw the project. Homeowners would be immediately eligible for to apply to Brevard County for individual septic system replacement dollars. Per the SOIRL website, the maximum reimbursement for advanced septic systems is $18,000 per lot. This option allows the greatest freedom of choice for homeowners but not complete removal of nutrients to the lagoon.
Option 2: Mandatory Participation. Require all homeowners to connect to the sewer system once completed and draft an ordinance. Council must determine who pays for cost overruns, authorize staff to apply for the FDEP grant available, and if homeowners are responsible for cost overruns, then Council must identify what enforcement actions it will take to recoup money the City must pay back to the County in the case of non-compliance.
If the cost overruns (if they occur) for public infrastructure are greater than SOIRL funding and any applicable grants, the cost above the funding will be identified as to be paid for by:
A) Utilities/Utility Rate Payers or
B) Homeowners
The City of Cocoa would be responsible to collectively apply for grants on behalf of all homeowners to FDEP or SJRWMD for additional reimbursements for septic abandonment, new sewer service line, hardscape replacements and potentially impact fee if allowed by the grant.
With mandatory participation, the city can apply for a grant from SJRWMD or FDEP for the short fall from SOIRL. Adopting a specific mandatory connect policy for the homeowners in the affected areas as well as a policy for non-compliance with enforcement actions detailed is needed. The details on enforcement to address homeowners who refuse to comply will need to be identified. The policy must address the costs not covered due to refusal to participate and the costs above allocated funding regardless of the source of funding.
In the above option, the cost overrun funding source for public infrastructure will need to be specifically stipulated as either a city utility responsibility or a homeowner responsibility. Mandatory participation ensures maximum reimbursement from SOIRL funding but may be insufficient. Homeowners via the City can seek grants for new service lines and other related costs. If homeowners are to pay for infrastructure overruns, the estimated costs spread over 92 lots may create a large liability to the homeowners.
To require homeowners to connect, the City would adopt a citywide mandatory connection policy addressing lots that have existing septic when city sewer systems are or become available. The areas identified as Area J and Area K from the Brevard County Tetra Tech Report would be required to connect without exception due to the proximity of the homes to the lagoon and the environmental harm such as algae blooms and nutrient loading caused by the septic systems per the Tetra Tech report.
Homes outside Area J and K and outside the areas designated in the Tetra Tech report (i.e., west of US 1), who have working septic systems and currently have city sewer system available can be granted exceptions to connect. Staff estimates there are approximately 129 parcels within the city limits that have current water accounts and have access to existing sewer but have no current sewer account. The exceptions for parcels west of US1 granted would not force anyone to connect but current policies would require them to connect once their septic system fails in the future.
However, there are 19 parcels east of US1 that currently have access to an existing Cocoa gravity sewer system and are not connected. Because of their proximity to the Indian River Lagoon, these parcels would be required to connect based on the same rationale of protecting the Indian River Lagoon covered under the Tetra Tech Report which is applicable to the J & K Areas, but these 19 parcels may not qualify for current grant funding from SOIRL or other agencies.
Finally, Staff has reviewed the draft contract used on other SOIRL projects and Section 15 b. contains a funding restriction that requires any City funds budgeted for the Project, that are saved by the City by virtue of reimbursement or allocation received from the SOIRL cost-share agreement, be expended for other future SOIRL projects. County Staff and the City Attorney are currently reviewing and discussing this contract language with the County and have determined that the County would be amenable to deleting that Section and funding restriction in the future contract with the City. The deletion of the Section and funding restriction would address the City’s concerns.
The Utilities Department will need to cash fund the project subject to review and upon securing mandatory participation, sign a contract with Brevard County to accept the funding reimbursement from SOIRL.
Option 3 Non-mandatory participation (Do nothing with current policies)
Cost overruns (if they occur) for public infrastructure are greater than SOIRL allocations will be paid for by city utilities department.
A) Utilities/Utility Rate Payers or
B) Homeowners
This option is not viable without the full support of all residents to maximize SOIRL funding.
Option 4: Delay Decision to move forward
The Council could choose to take no action at this time. The delay would continue to hold allocations ($5.6M) from SOIRL toward the project but would also not allow any of the 92 homeowners to apply for advanced septic funding. The final engineer design can be held until the city is ready to act. It is difficult to predict what construction costs would be in the future considering the current volatility and high inflation spike we are seeing today and whether the delay would increase or decrease future costs.
STRATEGIC PLAN CONNECTION:
Investment in Public Infrastructure (Invest in Environmental Stewardship)
BUDGETARY IMPACT:
Budgeted N/A
If not budgeted, is amendment/transfer attached? N/A
PREVIOUS ACTION:
On July 26th, 2022, Council reviewed an agenda item to consider multiple options for the Save Our Indian River Lagoon Septic to Sewer Project. Staff was direct to research and update public and private infrastructure costs and return the agenda to the August 9, 2022 meeting.
On June 24th, 2022, Council reviewed an agenda item to consider multiple options for the Save Our Indian River Lagoon Septic to Sewer Project. More information on sewer impacts outside the Indian River Drive corridor needed to be considered and the item was tabled until the July 26th, 2022 meeting.
On November 13, 2019, Council approved a task order for Bussen-Mayer Engineering Group (AKA DRMP), for final engineering design and surveying.
On December 12, 2017 Council approved a task order for Bussen-Mayer Engineering Group for preliminary design, geotechnical analyis, survey and project feasibility.
RECOMMENDED MOTION:
Recommendation
To Provide Direction to Staff for Funding and New Policies, if Necessary, for the Indian River Drive Septic to Sewer Conversion Areas J & K