# Florida Governmental Utility Authority Board Agenda Item Thursday, February 19, 2009

SM 4 Status Update on the Lehigh Acres Utility Expansion Project – Mandatory Wastewater Connections



### ________________ __________________ __________________ ______________

Summary

As part of the analysis of future utility expansion in Lehigh Acres, a number of properties have been identified as being located adjacent to existing FGUA wastewater facilities, which places them within the guidelines for mandatory connection under Chapter 381.00655, Florida Statutes.

Attached you will find a staff report which includes a set of proposed policies to guide mandatory wastewater connections in all FGUA systems, and a proposed connection program for the identified 166 residential connections in Lehigh Acres. There are also commercial properties that will fall under the mandatory connection criteria. However, staff is still identifying these locations, and these properties will be brought to the Board for separate consideration in the near future.

The proposed Lehigh Acres residential connecti on program includes the following provisions:

• Properties must connect within 365 days of formal notice of service availability;

• Properties must connect within 90 days if the septic system is in need of repair or replacement;

• Estimated costs ranging from $5,130 (typical case) to $15,130, including costs to abandon the septic system and connect from right-of-way to clean-out;

• Financing/payment options which include 2-year interest free, 5-year interest free (hardship only), and a 15-year with intere st option, as well as the lump sum payment option;

• Preliminary discussion of how the FGUA may fund/finance the project; and

• A proposed project schedule.



### Recommendation

This is an information item only. It is anti cipated that the proposed mandatory connection program will be presented for action at the March Board meeting.



### Budget Impact
Project Number: Previous Balance: $ 0.00 Fund Number: Project Cost: $ 0.00 GSG Admin. Fee: $ 0.00 Remaining Balance: $ 0.002 

### FGUA Agenda Item February 19, 2009 Lehigh Acres Mandatory Wastewater Connection Program

Background

In order to fully understand the immediate policy decisions facing the FGUA Board related to mandatory wastewater connections in Lehigh Acres, it is important to understand the background of the development of the community and how the development patterns have impacted the provision of utility services. More importantly, the Board should understand the scope of the future challenges of providing utility services to the community and the difficult policy decisions that will be necessary.

The following are some key points related to the history and growth of Lehigh Acres that will help place the utility challenges into the proper context:

• Lehigh Acres was developed as a residential platted lands community with over 130,000 platted lots covering approximately 95 square miles. It is estimated that only 30% of this area is developed today.

• Lehigh Acres has grown rapidly with the current population approaching 80,000, and with a build-out population estimated to be over 300,000.

• Central water and wastewater services, provided by the FGUA, are available to only a small portion of the properties in Lehigh Acres, with approximately 30% currently served by public water service and approximately 15% served by central wastewater service.

• Much of the recent growth in the community is served by private potable water wells and septic systems. As an example, in 2006 alone there were over 6,500 new private well permits in Lehigh Acres, while the FGUA has added only ~2,000 new water customers since acquiring the system in 2003.

• The Florida Department of Health estimates that over 25,000 septic tanks have been permitted in Lehigh Acres.

• There is a growing concern about the potential environmental problems related to declining aquifer levels and potential cont amination of groundwater supplies as the community grows.

There has been a community planning effort (Lehigh Acres Comprehensive Planning Study) under way for the past couple of years that has evaluated numerous community issues and has issued a report that clearly recognizes the need to expand central water and sewer services. The major challenge facing the FGUA will involve a) developing a rational plan to expand water and wastewater services to the community in conjunction with the goals and objectives of the planning study, and b) id entifying funding sources to implement such a plan. The timing of the plan will also be critical due to the current economic conditions and the economic health of local property owners. Staff suggests that the Board consider a series of discussions/workshops later in 2009 to begi n the discussion to develop a plan for the larger issue of water and wastewater service expansion in Lehigh Acres.3 Mandatory Wastewater Connections

With regard to the immediate issue of mandatory wastewater connections, during 2008 staff developed a preliminary connection program to di scuss with the Board of Directors in early 2009. In January, the staff made a presentation to the Lee County Board of County Commissioners to update them on the activities of the FGUA. At this meeting it was communicated very clearly that the Board of County Commissioners expects the FGUA to actively enforce mandatory connection to the wastewater system. Since the meeting with the Lee County Board of County Commissioners, FGUA staff has:

o Verified the residential properties subject to mandatory connection laws;

o Provided preliminary courtesy notices to the affected property owners;

o Refined the estimated costs to the affected homeowners;

o Developed financing options to assist the homeowners;

o Inquired with Lee County Human Services regarding potential CDBG eligibility for homeowners;

o Reviewed all pertinent Lee County policies & procedures;

o Prepared draft policies and connection program recommendations for FGUA Board discussion in February.

It is important to note that staff has only included residential properties in the initial implementation phase of the program. Field work is currently underway to identify the commercial properties that would meet the statutory definition for mandatory connection, and a recommended expansion to the progra m to include the applicable commercial properties will be presented to the Board in the near future.

Recommended Policies for Mandatory Wastewater Connections

Since the FGUA does not currently have adopted policies regarding mandatory connections, staff has prepared a set of policies (see Exhibit A) for the Board’s review and consideration. These policies would serve as the guidelines for mandatory connections in all FGUA systems. These policies are consistent with the requirements of Florida Statutes and address such issues as:

o Criteria for defining the properties subject to mandatory connection;

o Time allowed for property owners to connect after receiving formal notice of availability; and

o Requirements for notifying property owners of service availability.

Proposed Lehigh Acres Mandatory Wastewater Connection Program

Residential Properties Affected and Timeframe for Connecting

The current number of residential properties subject to mandatory wastewater connection requirements in Lehigh Acres is 166. These properties are detailed in Exhibit B and the geographic distribution is shown on Exhibit C. Pursuant to Florida law, the properties will have 365 days from the date of formal notification of service availability to connect to the system. If a property has a septic system in need of repair, the connection must be made within 90 days of notice of availability.4 Estimated Costs for Homeowner

Table 1 outlines the estimated costs of connection to the homeowner, including the various FGUA fees and charges, as well as the “private property” costs of abandonment of the septic tank and connection from the right-of-way to th e clean-out. The table shows a wide range of potential costs to the homeowner. This is primarily due to the uncertainty related to the wastewater lateral installations. The FGUA fe e for wastewater lateral installations is the actual cost of installation, with a minimum ch arge of $700. Severn-Trent staff, as well as local plumbers that staff has spoken to, believe that most of the subject properties already have the laterals installed. In those cases, the costs should approximate those outlined as “Minimum Costs/Charges” in the table below. However, if the lateral is not installed, the costs will be higher, and depending upon the ch aracteristics of the lot and location of the sewer line, the lateral installation could cost as much as $10,000.

Table 1 Lehigh Acres Single Family Estimated Wastewater Connection Costs

Description Minimum Costs/Charges Maximum Costs/Charges Capacity Impact Fee $2,840 $2,840 Wastewater Service Deposit $80 $80 * Wastewater Lateral Installation $0 $10,000 Wastewater Lateral Inspection $90 $90
Service Initiation Fee $20 $20

Total Estimated FGUA Connection Charges $3,030 $13,030 ** Estimated private property costs; (including septic tank abandonment and installation and connection of pipe from right-of-way to the clean out) $2,100 $2,100

Total Estimated Costs to Homeowner $5,130 $15,130 * Indications are that most of the sewer laterals are already installed for the properties in question. If a lateral installation is required, there is an additional lateral installation fee which is the actual cost of the installation with a minimum fee of $700/ERU. In certain circumstan ces this cost could be as much as $10,000. ** Estimate is based upon sample properties wi th estimates provided by licensed plumbers.

Financing/Payment Options

As shown in the previous section, the cost s of connecting to the FGUA system are not insignificant and are likely to represent a substantial financial burden for many of the affected property owners, especially in today’s economic environment. Staff has prepared the proposed financing/payment options in an attempt to outline a range of alternatives that will provide short-term and long-term altern atives, as well as address the statutory requirements for financing options that must be afforded to property owners mandated to connect to public wastewater systems. It is also important to note that staff is recommending that the multi-year financing options include the opportunity for the homeowner to finance the total cost of connecting to the wastewater system, including the costs associated with the septic tank abandonment and pipe connection costs. To addr ess these “on-site” costs, it5 is anticipated that the homeowner would be responsible to select the vendor from a list supplied by the FGUA for completion of the work. The homeowner would then present the bill for the work to the FGUA for payment or reimbursement. This amount would then be included in the total amount to be financed by the FGUA under the selected financing option.

Table 2 below provides a breakdown of the financing/payment options and the estimated payments associated with each option.

Table 2 Lehigh Acres Mandatory Wastewater Connection Financing/Payment Options

Financing/Payment Option Minimum Estimated Cost Maximum estimated Cost

Cash Payment (one-time lump sum) $5,130 $15,130

2-Year Interest Free (monthly payments) $213.74/month $630.40/month

5-Year Interest Free (hardship only; monthly payments) $85.50/month $252.16/month

15-years with Interest (Annual assessment) $587.31/year $1,732.23/year

Note: 15-year option includes interest at 6.45% and estimated assessment administration costs.

1. Cash Payment Option – Under this alternativ e, the homeowner would pay the appropriate fees/charges to the FGUA in a lump sum payment, and would contract with and pay the vendors necessary to complete the abandonment of the septic tank and complete the connection from the right-of-way to the clean-out.

2. 2-Years Interest-Free Option – Section 381.00655(1) (a), Florida Statutes requires that “the owner shall have the option of pre-paying the amortized value of required connection charges in equal monthly installments over a period not to exceed 2 years from the date of initial notification”. Under this alternative, the homeowner would pay 24 equal monthly installments to the FGUA on an interest free basis. This option would be available to any affected property owner under this program.

3. 5-Years Interest-Free Option – Section 381.00655(2)(a), Florida Statutes states that “any connection fee charged...may be paid with out interest in monthly installments, over a period of time not to exceed 5 years from the date the sewerage system becomes available if it determines that the owner has demonstrated a financial hardship”. The statutory language does not mandate that this option be provided or that it be set at the maximum period of 5 years. However, in light of the severity of the economic downturn in southwest Florida, staff felt it was prudent to extend this option at the maximum level authorized by the Florida Statutes. Under th is alternative, the homeowner would pay 60 equal monthly installments to the FGUA on an interest free basis. This option would be6 available only to affected property owners that would qualify as a financial hardship. It is staff’s recommendation that “financial hard ship” be defined to include homeowners who can demonstrate that they are on one or more public assistance programs at the time that connection is made.

4. 15-Years with Interest – This option is intended to provide affected property owners with a long-term financing option for the mandatory connection costs. It is contemplated that under this option the FGUA would place an assessment on the affected property and would collect the assessment annually through the tax bill process for 15 years. The assessment would include all of the connection costs, as well as applicable interest charges and assessment-related administrative co sts. This option would be available to any affected property owner under this program.

FGUA Project Budget/Financing Plan

It is estimated that the total amount of the connection costs related to the subject 166 residential properties will total between $850,000 and $1,700,000, depending primarily upon the number of laterals that will need to be installed. Preliminarily, staff believes that the FGUA financial plan for this project sho uld be structured generally as follows:

o Under the 2-year and 5-year interest-free options, the fees/charges owed to the FGUA would simply be collected on a monthly basi s over a 24 or 60 month period. For items that require actual capital expenditure to complete the connection (lateral installation, abandonment of septic tank, and connection from right-of-way to clean-out), the FGUA would utilize either existing reserve funds or the 2007 Line of Credit.

o Under the 15-year option, the entire amount of the connection costs would be “borrowed”, utilizing either existing lines of credit, or establishing a new credit mechanism, and the applicable fees/charges would be paid into appropriate FGUA accounts. The debt-related costs incurred by the FGUA would be passed along to the homeowner connecting to the system and placed as an assessment on the annual property tax bill.

Staff is in the process of establishing a more definitive financial plan and will be exploring other credit options, including in ternal financing options, re-prioritization of existing budget and CIP, and discussions with lending institutio ns. Staff would anticipate a more definitive program to be presented to the Board at the March meeting.

General Project Schedule

February 2009 FGUA Board information item on proposed connection program March 2009 FGUA approval of the program March-April 2009 Finalize recommended vendors and financing arrangements April 2009 Public meetings in Lehigh to explain the program details April 2009 Formal notice to affected property owners May-June 2009 Begin connecting those who would like to connect immediately July 2009 Deadline to connect for those with non-functioning septic systems April 2010 Deadline for all other residential connections

### i 

## Florida Governmental Utility Authority

Wastewater System Mandatory Connection Policies

1. Purpose and intent

It is the purpose and intent of these policies to guide the FGUA in its actions to apply and enforce both state and local regulations requ iring mandatory connection to the applicable FGUA wastewater system.

2. Definitions.

a. Abandon shall mean the abandonment of existing Onsite Sewage Treatment and Disposal System (“OSTDS”) acco rding to Section 64E-6.011, Florida Administrative Code.

b. Available shall refer to that portion of the applicable FGUA Utility System (the “Utility’) that is capable of being conne cted to the plumbing of a residential subdivision lot, a single or multi-fami ly residence, or an Establishment, provided that:

i. The Utility is not under a Florida Department of Environmental Protection moratorium.

ii. The Utility has adequate permitted capacity to accept the sewage to be generated by the residence or Establishment.

iii. For a residential subdivision lot, a single-family residence, or an establishment, any of which has an estimated sewage flow of 1,000 gallons per day or less, a gravity sewer line to maintain gravity flow from the property's drain to the sewer line, or a low pressure or vacuum sewage collection line in those areas approved for low pressure or vacuum sewage collection, exists in a public easement or right-of-way that abuts the property line of the lot, residence, or establishment.

iv. For an establishment with an estimated sewage flow exceeding 1,000 gallons per day, a sewer line, force main, or lift station exists in a public easement or right-of-way that abuts the property of the establishment or is within 50 feet of the property line of the establishment as accessed via existing rights-of-way or easements.

v. For proposed residential subdivis ions with more than 50 lots, for proposed commercial subdivisions with more than 5 lots, and for areas zoned or used for an industrial or manufacturing purpose or its equivalent, a sewerage system exists within one-fourth mile of the

### ii development as measured and acce ssed via existing easements or rights-of-way.

vi. For repairs or modifications within ar eas zoned or used for an industrial or manufacturing purpose or its equivalent, a sewerage system exists within 500 feet of an establishment' s or residence's sewer stub-out as measured and accessed via existing rights-of-way or easements.

c. Board of Directors or Board shall mean the Board of Directors of the FGUA.

d. Connection Charges shall generally mean all applicable Utility-imposed fees and charges associated with a new service connection, pursuant to the adopted applicable FGUA fee schedule.

e. Establishment shall mean a building or buil dings other than a single or multifamily residence.

f. On-Site Sewage Treatment and Disposal System (“OSTDS”) shall mean a system subject to Department of Health rule 64E-6, Florida Administrative Code, that contains a standard subsurface, filled, or mound drain field system; a septic tank, an aerobic treatment unit; a laundry wastewater system; a grease interceptor; a dosing tank; a solids or effluent pump; a waterless, incinerating, or organic waste-composting toilet; or a sanitary pit privy.

g. Utility shall mean any real property, attachments, fixtures, treatment plants, pumping stations, intercepting sewers, ma ins, laterals, vacuum lines, pressure lines, appurtenances, easements, rights or other real or personal property of the applicable Florida Governmental Util ity Authority (FGUA) System, used in connection with the collection, treatment, purification, or disposal of sewage and sewage effluent and residue.

3. Mandatory Connection to the FGUA System.

a. OSTDS owners shall connect to the Utilit y when service is available within the following time periods:

i. If the OSTDS is properly functioning, the OSTDS owner must connect to the Utility within 365 days after receiving written notification that the Utility is available for connection.

ii. If the OSTDS needs repair or modifi cation to function in a sanitary manner or to comply with the requir ements of the Florida Department of Health, the OSTDS owner must conne ct to the Utility within ninety (90) days after receiving written notification that the Utility is available.

b. The property owner shall pay the specifie d connection charges in effect at the time of connection to the system.

### iii c. Prior to formal notification of the property owners of the availability of utility service, the FGUA shall establish fina ncing and payment options to be made available to the property owners subject to these mandatory connection policies. At a minimum, these options shall be consistent with the requirements outlined in Sections 381. 00655 (1) (a) and 381.00655 (2) (a), Florida Statutes.

d. At his/her own expense, the property owner shall properly abandon any existing OSTDS, in accordance with guidelines established by the Florida Department of Health, within ninety ( 90) calendar days of connection to the Utility.

4. Notification to Property Owners

.

a. Within 90 days of wastewater service becoming available to properties, the FGUA shall provide written notification by certified mail or hand delivery to the affected property owners.

b. This notice shall inform the property owner(s) of the availability of utility services, the timeframe in which the connection to the Utility must be completed, consistent with the requirements of section 3 above, and shall provide an FGUA contact name and phon e number regarding where to receive further information and guidance.

c. The notice shall include information pertaining to the estimated costs of connecting to the Utility and an explanat ion of financing alternatives that are available.

5. Administrative Extension of Mandatory Connection Timeframes

a. The Systems Manager of the FGUA may, wi th the approval of the Department of Health, administratively extend the mandatory connection timeframe requirements as follows:

i. Up to a 365 day extension if the wa stewater system does not have sufficient capacity to serve the additional demand; or

ii. Up to a 90 day extension if the OSTDS needs repair or modification (see Section 3(a)(ii) above), and connection to the wastewater system imposes an undue financial hardship if made within the time period specified in these policies.

iii. In order to qualify for undue financial hardship, the property owner must furnish evidence that they are receiving public financial assistance, as determined by the FGUA, at the time of the requirement to connect.

### iv 6. Enforcement.

The FGUA shall utilize legally available enforcement mechanisms to ensure compliance with state and local mandatory connection requirements.Item No. 1 2360 5th St E 2 2820 5th St W 3 2908 5th St W 4 2914 5th St W 5 3002 5th St W 6 3004 5th St W 7 2701 6th St W 8 2817 6th St W 9 2812 7th ST W 10 2814 7th ST W 11 2821 7th ST W 12 706 Altair Ave 13 722 Altair Ave 14 729 Altair Ave 15 218 Ambury St 16 218 Ancona St 17 222 Ancona St 18 1466 Archer 19 726 Ardson Ln 20 728 Ardson Ln 21 750 Arpage Ct 22 717 Arundel Cir 23 721 Arundel Cir 24 723 Arundel Cir 25 725 Arundel Cir 26 733 Arundel Cir 27 735 Arundel Cir 28 739 Arundel Cir 29 741 Arundel Cir 30 743 Arundel Cir 31 745 Arundel Cir 32 750 Arundel Cir 33 755 Arundel Cir 34 761 Arundel Cir 35 764 Arundel Cir 36 766 Arundel Cir 37 768 Arundel Cir 38 219 Aydin Ct 39 221 Aydin Ct 40 202 Bougainvillea E 41 309 Bougainvillea E 42 545/547 Charwood Ave 43 108 Connecticut Rd 44 110 Connecticut Rd 45 114 Connecticut Rd 46 1645 County Club Pkwy 47 1649 County Club Pkwy 48 1683 County Club Pkwy 49 100 Dania Cir 50 224 David Ave 51 230 David Ave 52 234 David Ave 53 246 David Ave 54 250 David Ave 55 104 Davis Rd 56 2402 Del Ray Pl 57 708 Fargo Dr 58 709 Fargo Dr 59 711 Fargo Dr 60 716 Fargo Dr 61 719 Fargo Dr 62 720 Fargo Dr 63 722 Fargo Dr 64 724 Fargo Dr 65 726 Fargo Dr 66 728 Fargo Dr Site Address Lehigh Acres System Potential Wastewater Customer Parcels 1/23/09

Page 1 of 3Item No. Site Address Lehigh Acres System Potential Wastewater Customer Parcels 1/23/09

67 731 Fargo Dr 68 732 Fargo Dr 69 736 Fargo Dr 70 740 Fargo Dr 71 409 Glenn Ave 72 1802 Golfside Village 73 27 Greenwood Ave 74 209 Highland Ave 75 213 Highland Ave 76 217 Highland Ave 77 221 Highland Ave 78 807 Hoosier St 79 609 Joel Blvd 80 617 Joel Blvd 81 619 Joel Blvd 82 623/625 Joel Blvd 83 703 Joel Blvd 84 705 Joel Blvd 85 707 Joel Blvd 86 715 Joel Blvd 87 719 Joel Blvd 88 210 Jersey Rd E 89 402 Jersey Rd E 90 401 Joel Blvd 91 403 Joel Blvd 92 1102 Kanza Ct 93 206 Kingston 94 730 Long Lines Ln 95 243 Maison Grande Ave 96 301 Maple Ave N 97 303 Maple Ave N 98 114 Mckinley Ave 99 302 North Ave 100 304 North Ave 101 306 North Ave 102 308 North Ave 103 310 North Ave 104 312 North Ave 105 314 North Ave 106 316 North Ave 107 318 North Ave 108 320 North Ave 109 217 Oregon Way 110 50 Ortona 111 60 Ortona 112 70 Ortona 113 308 Penn Rd E 114 403 Penn Rd E 115 407 Penn Rd E 116 210 Recherche St 117 106 Riviera St 118 111 Riviera St 119 809 Rondelan Cir 120 810 Rondelan Cir 121 811 Rondelan Cir 122 812 Rondelan Cir 123 704 Rue Labeau Cir 124 705 Rue Labeau Cir 125 707 Rue Labeau Cir 126 708 Rue Labeau Cir 127 709 Rue Labeau Cir 128 711 Rue Labeau Cir 129 715 Rue Labeau Cir

Page 2 of 3Item No. Site Address Lehigh Acres System Potential Wastewater Customer Parcels 1/23/09

130 717 Rue Labeau Cir 131 718 Rue Labeau Cir 132 719 Rue Labeau Cir 133 721 Rue Labeau Cir 134 723 Rue Labeau Cir 135 826 Rue Labeau Cir 136 844 Rue Labeau Cir 137 219 Rue Labonne Rd 138 231 Rue Labonne Rd 139 118 Sebring 140 541 Thomas Sherwin Ave 141 707 Zebu Pl 142 708 Zebu Pl 143 711 Zebu Pl 144 712 Zebu Pl 145 705 Zemil Ct 146 712 Zendor Ave 147 716 Zendor Ave 148 123 Zenith Cir 149 124 Zenith Cir 150 125 Zenith Cir 151 126 Zenith Cir 152 136 Zenith Cir 153 137 Zenith Cir 154 141 Zenith Cir 155 151 Zenith Cir 156 159 Zenith Cir 157 161 Zenith Cir 158 162 Zenith Cir 159 163 Zenith Cir 160 715 Zephyr Ave 161 712 Zeppelin Pl 162 719 Zeppelin Pl 163 124 Zobora Cir 164 128 Zobora Cir 165 132 Zobora Cir 166 142 Zobora Cir

Page 3 of 3Lehigh AcresInteractive Map ViewerFlorida Government Utility Authority280 Wekiva Springs Road, Suite 2000Longwood, Florida 327791 inch equals 5,099.868987 feetμ