The city of Piedmont cannot proceed with the fifth phase of sewer rehabilitation work due to the defeat of the Measure A sewer surtax in February, Public Works Director Chester Nakahara said this week.
Nakahara says under the current sewer tax rates, which bring in about $2.1 million per year, the revenue cannot cover costs such as Phase V and Environmental Protection Agency mandates, estimated at $800,000 per year for the first four years.
Piedmont, which has had an aging sewer system undergoing replacement, is one of several East Bay cities that have agreed to test, monitor, repair and replace their sanitary sewer systems under the EPA mandates.
An aggressive campaign to defeat Measure A was lodged before the election, with opponents claiming the surtax was not necessary, that Piedmonters had enough taxes already. Voters were confused by the pro and con arguments, and many of them did not vote either way on their ballots, leaving the box blank.
Nakahara stressed the figures for EPA compliance costs were estimates.
"The EPA requirements are new. We've never done this before. Costs are not anticipated to be covered by the original sewer tax. We want to keep a healthy reserve for emergencies, and not dip (unnecessarily) into our reserve."
An EPA compliance budget prepared by city Finance Director Mark Bichsel shows an estimated cost of $961,100 for 2011-12, with $190,600 spent so far. Estimated costs include CCTV inspection
Nakahara said Piedmont will be able to save $400,000 this fiscal year by deferring purchase of a Vactor truck (at $400,000) until 2012-13. The special truck is able to "vacuum" large amounts of water from sewer mains to prevent overflows.
Bichsel estimated the sewer fund would be $125,544 in the red as of 2012-13, increasing to a $3.1 million deficit for 2016-17. Phase V work was estimated at more than $3 million.
Piedmont's waste water is collected through about 50 miles of sanitary sewer pipelines. The city has completed rehabilitation work on about 60 percent of its pipelines. Its goal is to completely rehabilitate its sanitary sewer system over the next eight to 10 years. The surtax was approved for the ballot by the City Council to ensure that there would be enough money in the future to cover the EPA mandates and its ongoing sewer rehabilitation program.
Opponents of the surtax argued that Piedmont is in full compliance and not subject to any EPA penalties and is ahead of schedule with its monitoring and pipeline replacement. They claimed the city has overestimated the costs involved with EPA compliance and that a sewer surtax was not necessary. About $11 million would have been raised by the surtax over a 10-year period had it passed. The surtax would have increased by 50 percent what homeowners currently pay.
The City Council in the future may consider putting the sewer surtax on a ballot.