LSLR Program Update September 09, 2020 Confidential/Pre-Decisional – Not for Public Dissemination Summary ▪ To prepare Chicago for pending regulations and maintain its leadership in the water industry, we must ▪ Develop a plan for replacing the City’s ~400,000 lead service lines ▪ Explore grants to fund the program and reduce the financial burden on City residents Phase I: (Low cost & high impact) Phase II: (Proactively integrates future regulations into existing practices) 2 Confidential. Not for Public Dissemination • Equity LSLR – Funded by CDBG grants/Unique to City • Homeowner-Initiated LSLR • Pilot LSLR alongside water main replacement – Funded with IEPA SRF Loan with Principal Forgiveness • LSLR alongside water and sewer main replacements • LSLR for public side water service line breaks • Public LSLR when notified of private side replacement Lead Service Line Replacement Plan Goals ▪ Comply with regulatory requirements ▪ Be proactive and maintain Chicago’s position as a leader in the industry ▪ Provide financial and logistical support to disadvantaged, low-income neighborhoods ▪ Minimize financial impact to City residents ▪ Programs are voluntary ▪ Seek Federal and State funding ▪ Spread LSL replacements out over multiple decades 3 Confidential. Not for Public Dissemination Background ▪ City has approximately 400,000 lead service lines ▪ Public Side: City Responsibility (Water Main to B-Box) ▪ Private Side: Homeowner Responsibility (B-Box to House) ▪ City water currently below EPA lead action limit ▪ 90% of samples must be below 15 ppb; Chicago 90th-percentile is 9.1 ppb ▪ A full replacement costs approximately $15,000-$26,000 per LSL 4 Confidential. Not for Public Dissemination Phase I Lead Service Line Replacement (Equity, Homeowner-Initiated, and Pilot) Phase I – Equity LSLR (unique to Chicago) Construction Zones for Equity LSLR ▪ Summary: Free full LSLR for low-income homeowners with tested lead >15 ppb ▪ Focused on low-income neighborhoods ▪ City Cost: $20,000-$26,000 per full LSLR ▪ Funding: Grants (CDBG, SRF, WIIN) ▪ $10M-$20M CDBG planned for 2021 ▪ Estimated Annual Replacements: 400-800 ▪ Timeline: ▪ Late 2020: Bid contract, pass ordinance and begin accepting applications ▪ 2021: Begin construction; continually review applications and apply for grants Replacements capped by region and prioritized by neighborhood income 9 Confidential. Not for Public Dissemination Phase I – Homeowner-Initiated LSLR ▪ Summary: Homeowners replacing their full LSL receive: ▪ Streamlined permitting process ▪ Subsidized permit fees ▪ Suggestions on contractor selection ▪ City Cost: $400 in material costs (~$3,100 in foregone fees) per full LSLR ▪ Funding: Operating budget ▪ Estimated Annual Replacements: < 100 (40 in 2019) ▪ Timeline: ▪ Late 2020: Passage of fee waiver ordinance ▪ January 2021: Fee-waiver applications open for submission City will eventually be required to pay for public side under proposed LCR revisions 10 Confidential. Not for Public Dissemination Phase I – LSLR alongside Water Main Replacement (Block-Level) ▪ Summary: Replace water main and associated full LSL along one block in low/moderate income area ▪ Review construction techniques / coordination ▪ Gauge public participation ▪ Update cost estimates and identify efficiencies ▪ City Cost: $15,000-$25,000 per full LSLR ▪ Water main costs additional ▪ Funding: Up to $4M SRF principal forgiveness (application submitted to IEPA and pending review) ▪ Estimated Replacements: 50 ▪ Timeline: 2020/ 2021: Bid Contract, public outreach, and project construction (pending IEPA approval) 11 Confidential. Not for Public Dissemination Phase I Summary of Costs Program Target Number of Annual LSLR Who Pays for Service Line Equity LSLR 600 City <100 Homeowner-Initiated LSLR LSLR Alongside Water Main Replacements 50 Cost to the City per LSL (2) Subsidies by City Total Approximate Cost $25,000 (Limited Restoration) Public and Private Side $15 M for 2020 (Funded by CDBG) Homeowner (Until Regulations Change) $400(1) $3,100 (1) $40,000 Annual (Funded by City) City $25,000 (Limited Restoration) Public and Private Side $4 M available (Funded by IEPA SRF Principal Forgiveness) (1) $3,100 is approximate permit fees subsidized by City (CDOT and CDWM fees). Cost of $400 includes materials for new meter and B-box; City labor and equipment costs not included. (2) Engineering, construction management and program management costs not included. 9 Confidential. Not for Public Dissemination Overall LSLR Program Timeline Fall 2020 Announce Equity LSLR and Homeowner-Initiated LSLR Programs Fall 2020 Form Work Group for LSLR stakeholder & community feedback options developed by the City to inform program design & promote participation. Winter 2020 Bid contracts for Equity LSLR Program and Water Main LSLR (Based on IEPA SRF Loan Program) Winter 2020 (LCR Revisions*) Develop new water and sewer main replacement CIP and develop approach for LSLR for water service breaks (based on revised LCR) Winter 2020 Passage of ordinances for Homeowner-Initiated and Equity LSLR Programs and Applications open for Equity LSLR Program Spring 2021 Begin construction for Equity LSLR Program Summer 2021 13 Confidential. Not for Public Dissemination Water Main LSLR alongside Water Main Replacement Phase II Lead Service Line Replacement (Water/Sewer Main CIP and Service Line Breaks) Phase II - LSLR Alongside Water or Sewer Main Replacements ▪ Summary: City replaces public side of lead service line and encourages homeowner to replace private side during water main and sewer main projects ▪ City Cost: $10,000-$18,000 per public-side LSLR ▪ Possible additional cost to City if it elects to subsidize private side ▪ Funding: Grants & Loans ▪ Estimated Annual Replacements: 160/mile of water main (average); if replace 15 miles/year, replace 2,400 LSL/year if homeowners participate ▪ Timeline: Upon Approval of LSLR Plan ▪ At 15 miles/year, City cost for public side LSLR is $45 MM/year (not including cost of water main replacement) 15 Confidential. Not for Public Dissemination Phase II – LSLR for Water Service Line Breaks ▪ Summary: Replace the LSL for: ▪ Public side leak/break - by City ▪ Private side leak - by homeowner (full LSLR should be encouraged by City) ▪ City Cost: $12,000-$20,000 per publicside LSLR ▪ Current cost for a repair $4,000-$7,000 ▪ Additional cost to City if choose to subsidize private side ▪ Funding: ▪ Currently, repairs are paid for by Operating Budget ▪ Estimated Annual Replacements: 4,0005,000 ▪ Timeline: After passage of revised Lead and Copper Rule ▪ Estimated annual cost of $67.5 MM for public side LSLR Random number and geographic distribution of replacements. 16 Confidential. Not for Public Dissemination LSLR Cost Estimate Breakdown Short-Side LSLR Site Restoration, Including Traffic Control Sidewalk Long-Side LSLR Site Restoration, Including Sidewalk Traffic Control Copper Water Service Copper Water Service Water Main / House Connections and Appurtenances Water Main / House Connections and Appurtenances Ductile Iron Drain Service Pavement Demolition and Restoration 14 Confidential. Not for Public Dissemination Ductile Iron Drain Service Pavement Demolition and Restoration Funding Opportunities Phase I – Early-Out Funding Agency Program Timeframe CDBG Grant Equity LSLR 2021 ($10 to $20M) EPA WIIN Grant Equity LSLR 2020 and 2021 ($7M) Application in Review by EPA IEPA SRF Principal Forgiveness LSLR Alongside Water Main Replacement 2021 ($4M of Principal Forgiveness) Application/Project Plan Submitted Phase II – Water/Sewer Main CIP and Breaks* Funding Agency Program Timeframe IEPA SRF Loan LSLR Alongside Water and Sewer Main Replacements 2021 and Beyond WIFIA Loan LSLR Alongside Water and Sewer Main Replacements 2022 and Beyond IML is proposing to include a state-imposed fee on all water users* 15 Confidential. Not for Public Dissemination Thank you!