Memorandum 15-117 Kachemak Drive/Shellfish Avenue Water Main

Memorandum 15-117

TO:                       Katie Koester - City Manager

FROM:                 Carey Meyer – Public Works Director

DATE:                  July 21, 2015

SUBJECT:         Council Decisions –  Kachemak Drive/Shellfish Avenue Water Main

                              ADEC Grant –  Water Storage/Distribution Improvements (Phase I)

With the signing of the ADEC grant agreement and bidding of the project later this summer, several issues need to be addressed by the Council.

Background: Over the last 20 years, water mains have been extended into areas that did not have water service through the use of assessment districts (where the cost of the improvements were borne by the benefitted property owners with help from the Homer Accelerated Water and Sewer Program - 25% Hawsp/75% property owners). Sewer mains were installed at the same time water was being extended. The extension of water main along Kachemak Drive and across Shellfish Avenue will be using grant funds that are expected to pay for 70% of the cost of the project.

Under what conditions will benefitted property owners be allowed to connect to the new water mains?
Does the sewer main need to be in place before allowing connections to the water main?
Will grant monies (used previously for improvement that indirectly benefitted the entire community) be used to reduce the cost of improvements that directly benefit a particular neighborhood?

Discussion:

Normally, property owners through a SAD (Special Assessment District) process get access to long term, low interest financing that allows for the cost of the project to be paid back over a twenty year period. In this case, there is no SAD. The City has in the past created deferred assessments which do not become due until a connection is made. In 2014, the City Council declined to authorize the creation of deferred assessments for this project.

Normally, property owners use more water when connected to a water main than when they haul water or use an on-site well. Allowing connections to water mains without sewer mains being present, is expected to put more water into adjacent on-site septic system absorption fields. Since many septic systems in Homer are in relatively impermeable soils and/or areas with high groundwater tables, allowing access to water mains without sewer mains can create public health concerns. Along Kachemak Drive it could increase groundwater flows and arguably have negative impacts on bluff erosion.

If grant monies are used to fund construction and property owners are assessed for 100% of the cost of the project, ADEC has indicated that they would consider this as “double-dipping.” The grant monies could be reallocated to complete Phase II or III improvements that benefitted the entire community (“A” Frame Pressure Reduction Station Replacement for example).

Recommendation

City Council pass a resolution establishing conditions under which benefitted property owners will be allowed to connect to the proposed Kachemak Drive and Shellfish Avenue/South Slope Drive water mains being installed as part of Homer Water Storage/Distribution Improvements (Phase I) as follows:

If grant funds are used to pay for the construction of the water mains, property owners will be required to pay for that portion of the cost not covered by the grant (expected to be 30% of the cost of the project) in a lump sum payment before connection to the main is allowed. Property owners will also be required to install their own water service from the main to the property line.
No connection will be allowed until public piped sewer service is available to the lot requesting water service.

If a special assessment district to provide both water and sewer mains is created; costs will be shared by benefitted property owners as provided for in Homer City Code (currently 25% HAWSP/75% property owners). Grant funds would be reallocated to project(s) that benefit the entire community.