REPORT TO THE CITY COUNCIL
FROM: PAUL AMICO, PE, Director
Department of Public Utilities
BY: JILLIAN GAYTAN, Business Manager
Department of Public Utilities - Administration
CHRISTINA SEMONIOUS, Management Analyst II
Department of Public Utilities - Administration
SUBJECT
Title
***RESOLUTION - Authorizing the Director of Public Utilities, or designee, to execute a Financial Assistance Agreement, and any Amendments thereto, with the United States Environmental Protection Agency in the amount of $3,700,214.00 for a Drinking Water System Infrastructure and Sustainability Program grant to replace failing polyethylene water service laterals in the City of Fresno’s water distribution system. (Citywide) (Subject to Mayor’s Veto)
Body
RECOMMENDATIONS
Staff recommends City Council adopt a resolution authorizing application to the United States Environmental Protection Agency (EPA), and adopt a resolution authorizing the Director of Public Utilities, or designee, to execute a financial assistance agreement, and any amendments thereto, with the EPA in the amount of $3,700,214.00 for a Drinking Water System Infrastructure and Sustainability Program grant to replace failing polyethylene water service laterals throughout the city of Fresno.
EXECUTIVE SUMMARY
The Department of Public Utilities (DPU) applied for and received $3,700,214 from an EPA Drinking Water System Infrastructure and Sustainability Program grant to replace failing polyethylene water service laterals throughout the city with durable copper piping. To proceed, DPU must execute a funding agreement with the EPA.
BACKGROUND
Water service laterals connect the public water main to the water meter and are owned and maintained by the City. Approximately 25,000 new homes were constructed in the 1990s using plastic water service laterals, and these laterals have experienced significant degradation due to manufacturing defects, resulting in frequent, unpredictable line failures. The peak system failure occurs during the summer months when water demand is highest.
City crews have been replacing the plastic service laterals since the early 2000s. Over the last 5 years, 500 to 800 polyethylene water service laterals have been replaced annually. In the last 30 months, approximately 1,900 water service lateral failures have occurred, which have resulted in an estimated 38 million gallons of water loss. In April 2023, DPU contracted with West Valley Construction to supplement City crews, and a total of 3,400 service laterals have been replaced using this approach, and the City has been utilizing copper for the laterals to extend the life and reduce the risk of high future failure rates.
On September 7, 2023, the EPA released a Notice of Funding Opportunity (NOFO) under its Drinking Water System Infrastructure Resilience and Sustainability Grant Program. This grant opportunity was designed to support infrastructure projects that improve the resilience of drinking water systems against natural hazards and extreme weather events. In alignment with federal climate adaptation strategies, the program aims to strengthen the capacity of community water systems to anticipate, prepare for, and respond to the impacts of climate change.
DPU applied for and received a notice of intent to award in August 2024 for the total amount of $3,700,214 to be used for proactively replacing deteriorating polyethylene service laterals in the City’s water distribution system with copper piping (Project). The four-year Project period will also include public outreach to inform and educate residents about the Project status, natural hazard risks, drought resiliency, and water conservation strategies. On October 3, 2025, the City received an official Notice of Award and must now execute a funding agreement with the EPA to proceed with the Project.
The Project will utilize the grant funding to proactively replace 891 water service laterals and is expected to save an additional 20 million gallons of water when complete. Replacements will be prioritized in areas that have seen the greatest failure rates and throughout several disadvantaged areas.
ENVIRONMENTAL FINDINGS
This action authorizes the Director of Public Utilities to enter into a financial assistance agreement with the EPA to fund the City’s proposed polyethylene pipe replacement project, including the selection of locations for replacement and completion of environmental review, so California Environmental Quality Act (CEQA) review is not required at this time. The appropriate CEQA finding will be prepared and adopted at such time as the City commits to the polyethylene pipe replacement project.
LOCAL PREFERENCE
The local preference was not implemented because this action does not involve the bid or award of a construction or services agreement.
FISCAL IMPACT
This Project has no impact on the General Fund. The total estimated cost for the Project is $3,700,214, the entirety of which will be funded through the EPA Drinking Water System Infrastructure and Sustainability Program grant.
Attachment:
Resolution & Funding Agreement