Consider Revisions to the City's Septic System Repair Policy

Attached to this case is a copy of a policy adopted by the City in 1992, which relates to the repair of failed septic systems.  As is explained in the preamble to the policy, its purpose is to insure public health and safety.  Over the years the policy has rarely been used to provide funding for the repair of failed septic systems.  Implementation of the policy has only been in cases where the property owner refuses to address the failure, or where funding for the repair could not be obtained elsewhere.  On August 19, 2009 the Public Works Committee discussed the septic system repair policy in conjunction with a resident request for assistance.  The recommendation of the Committee at that time was to reaffirm the policy, but they also directed staff to research other alternatives for financing such repairs.  The intent of the Committee was to leave the City policy in place, which involves special assessment of the repair, but only as a last resort.

Staff has been approached three times in the last two years regarding use of this policy to fund failing septic systems.  During the most recent request (November of 2011) the City Council felt that language revisions to the policy were warranted, since it may be more likely to be utilized in the current economic times.  This matter was discussed at Public works Committee on December 13, 2011, and direction from that meeting was used to draft the attached revised policy.  The recommendations for revisions are related to voluntary property owner requests, and include:

• The failure must represent an imminent public health hazard.
• The property owner is required to prepare a letter and/or sign an affidavit attesting that they have investigated all other funding options for the repair/replacement of the failed septic system, stating they are not eligible or have been unsuccessful in securing alternative funding.
• For time considerations the public hearing process must be waived.  The property owner must execute a waiver of public hearing for levying and contesting the special assessment for the repair/replacement.
• The property owner must continue to investigate alternative funding options in an effort to pay off the special assessment prior to its term, typically ten (10) years.  Should the property owner secure alternative funding and reimburse the City for all costs incurred for repairing/replacing the failed septic system within two (2) years from the date of levying the special assessment, the property owner would receive a ten (10) percent refund of the twenty five percent (25%) administrative and overhead fee required for utilizing this policy.
• Language related to ensuring the property owner is in good standing with regard to property taxes and mortgage holders.

A red-lined draft, and corresponding final executable version are attached for your review and comment.

Staff researched several alternative funding options that may be available through various assistance programs within Anoka County and the state of Minnesota.  The Anoka County Community Action Program (ACCAP) has emergency assistance monies available for housing related issues, with eligibility requirements based upon family income guidelines.  In 2010 ACCAP disbanded and forwarded all requests for financial housing assistance to the Greater Metropolitan Housing Corporation (GMHC) Housing Resource Center, which administers community block grant funds through a contract with Anoka County.  The eligibility requirements include; home value, age of the unit, residence time within the unit, and family household income.  GMHC currently has a two year waiting period for this program.

The Minnesota Housing Finance Agency is a state agency that works with local communities to distribute funds to residents that meet their eligibility requirements.  They can issue interest free loans to those that meet their criteria, and place a lien on their property for repayment.  If the resident were to remain in the home for a period of ten years the loan would be forgiven.  Unfortunately, since ACCAP was in existence at the time this entity was going out for contracts with local carriers, Anoka County was not included in the pool and therefore funding within Anoka County is not available at this time.  The program is currently working to remedy this situation, but it will take some time to resolve.  During the investigation staff also learned of a couple of other potential assistance options, which include a "Rebuilding Together Loan" with the County, and "Fix Up Fund Loan" with the state.

Staff recommends adoption of the revised septic system repair policy, contingent upon City Attorney review with regard to legal content.

Staff time will be used to incorporate any requested revisions to update this policy.  Funding for implementation under this program comes from the sanitary sewer enterprise utility fund, and is paid back with a special assessment against the benefiting property.

Motion to adopt the revised septic system repair policy, contingent upon City Attorney review with regard to legal content.