REQUEST FOR CITY COUNCIL AND
CORONA UTILITY AUTHORITY ACTION
DATE: 11/15/2023
TO: Honorable Mayor and City Council Members
Honorable President and Board Members
FROM: Utilities Department
SUBJECT:
Title
PAYMENT PLAN AND LIEN AGREEMENT FOR INSTALLATION OF DOUBLE CHECK DETECTOR ASSEMBLY AT 1850 AND 1838 WILD TURKEY CIRCLE
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EXECUTIVE SUMMARY:
This staff report requests City Council to approve a payment plan and lien agreement for the installation of a fire protection backflow device (double check detector assembly) at 1850 and 1838 Wild Turkey Circle. The existing backflow devices at these properties are single check valves and do not meet current American Water Works Association and City standards. In connection with tenant improvements at the properties, the property owner is required to install a double check detector assembly. The property owner claims that the cost to install such a device would impose a significant financial hardship and has requested a payment plan for the installation of the double check detector assembly.
RECOMMENDED ACTION:
Recommended action
That the City Council:
a. City Council approve and authorize the City Manager, or his designee, to execute a payment plan and lien agreement with Daniel Boren, President/Owner of Chemical Consultants, Inc., for the material and installation costs of a double check detector assembly at 1850 and 1838 Wild Turkey Circle.
b. Authorize an appropriation of $45,000.00 for installation and materials and an estimated revenue increase of $5,220.46 for the proposed payment plan in the Water Utility Fund 570 for Fiscal Year 2024.
That the Corona Utility Authority review, ratify, and to the extent necessary, direct the City Council to take the above actions.
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BACKGROUND & HISTORY:
Daniel Boren ("Owner”), the owner of the properties located at 1850 and 1838 Wild Turkey Circle (“Properties”), is in the process of constructing tenant improvements, including the addition of a sprinkler system to their existing patio. During plan check review, it was discovered that the existing single check backflow device on the Properties does not meet current American Water Works Association (“AWWA”) and City standards. Therefore, the property owner is required to install a double check backflow device, which does satisfy current AWWA and City standards.
Backflow prevention devices are required under Title 17 of California Code of Regulations §7604 related to drinking water. Fire safety and prevention systems are connected to the potable water system. Backflow prevention is crucial to maintain clean water and to prevent contamination and related health risks.
Double check detector assembly devices typically consist of two single check valves connected in a way that offers failsafe backup if one of the check valves malfunctions for any reason. Double check valves also have screws on each side of the valve port so that it can be opened and cleaned as debris might accumulate with time. In accordance with City of Corona Utilities Department Design Policy adopted in November 2012, a double check detector assembly is required for all private fire service connections. The assembly is required to be above ground within a landscaped area that is located behind the parkway and within the public right-of-way or other dedicated easement to the City of Corona. The piping and valving shall adhere to City Standard Plan 417. Additionally, double check valve backflow prevention assemblies must adhere to all lead-free requirements, as mentioned in the City of Corona Utilities Department Modifications to Standard Specification for Public Works Construction amended on August 2018.
Most properties within the City that are required to have double check detector assembly are in compliance with this requirement. However, there are a few properties with private fire service connections that still have single check backflow devices. For public health and safety reasons and to safeguard the City’s potable water system, it is important that double check backflow devices are installed at all properties within the City that have private fire service connections.
ANALYSIS:
City staff notified the Owner of the requirement to upgrade the single check valve underground assembly to double check detector assembly. The Owner has indicated a willingness to comply with this requirement but has stated that the significant cost of such devices would impose a financial hardship due to health issues, business struggles due to volatile market conditions and the high cost of materials due to scarcity.
City staff has estimated that the total cost to purchase and install the double check detector assembly on the Properties is approximately $45,000. Because the double check detector assembly installation and replacement is exclusively tied to private properties, the cost must be paid entirely by the property owner. However, in light of the Owner’s stated financial hardship, Staff is proposing that the City purchase and install the double check detector assembly on the Properties and have the Owner enter into a payment plan and lien agreement in an amount equal to the total cost for the purchase and installation of the device.
The proposed payment plan and lien agreement would require the Owner to pay back such costs in monthly installments over a period of 6 years at 6% simple interest. The agreement would also include a process to administratively update the amount owed based upon the actual cost for the purchase and installation of the device. The agreement, which would be recorded against the Properties, would also include a lien mechanism that will remain in place until such time that the total amount due plus interest is paid in full, which will ensure cost recovery.
FINANCIAL IMPACT:
The payment plan and lien agreement is based upon the cost estimates for installation of the double check detector assembly at the properties. The repayment schedule and total payment amount will be adjusted after construction has been completed and actual costs have been determined.
Approval of the recommended actions will result in an appropriation of $45,000 from the Water Utility Fund 570 to the Utilities Department Operating Budget and an offsetting revenue budget in the Water Utility Fund 570 in the amount of $5,220.46 in Fiscal Year 2024. The remaining payments will be budgeted annually per the amortization schedule included in Exhibit B - Amortization Schedule of the attached agreement.
ENVIRONMENTAL ANALYSIS:
This action is categorically exempt pursuant to Section 15301 of the Guidelines for the California Environmental Quality Action (CEQA), which states that “operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the CEQA determination” and is therefore exempt from CEQA. This action involves repairs to existing infrastructure to maintain public health and safety and therefore is exempt from the requirements of CEQA. Therefore, no environmental analysis is required.
PREPARED BY: AFTAB HUSSAIN, MAINTENANCE MANAGER
REVIEWED BY: TOM MOODY, DIRECTOR OF UTILITIES
Attachments:
1. Exhibit 1 - Payment Plan and Lien Agreement