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

• f 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%

• f 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
• Average lining cost: $125/ ft
• Annual fee $28/household
• Contributing households: 18,600

Duckett Creek SanitaryDistrict

• ~70 repairs a year
• Average excavation repair cost: $3500
• 80% of repairs involve root intrusion
• Average lining cost: $125/ ft
• Annual fee $28/household
• Contributing households: 23,000

City of O’Fallon

• On track for 90+ repairs in 2018
• Average excavation repair cost: $4000
• Estimated 50% additional calls

regarding root intrusion removal

• Average lining cost: $125/ft.
• Annual fee $7.50/household
• Contributing households: 26,733

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