DATE: 07/01/2026
TO: Honorable Mayor and City Council Members
Honorable President and Board Members
FROM: Utilities Department
2026-248
REQUEST FOR CITY COUNCIL AND
CORONA UTILITY AUTHORITY ACTION
SUBJECT:
RESOLUTION AUTHORIZING A PAYMENT PLAN AND LIEN AGREEMENT FOR
PRIVATE SERVICE LINE REPAIRS
EXECUTIVE SUMMARY:
This staff report asks the City Council to adopt a resolution authorizing the City Manager to enter into payment plans and lien agreements with property owners for private service line repairs, and authorization to enter into Incidental Private Work Agreement and Waiver and Release (Commercial Account Form) to authorize the City’s contractor to repair or replace private service lines and associated fixtures for certain commercial properties and require reimbursement from the property owner. This action is intended to provide financial flexibility to affected property owners, ensuring that necessary service line replacements can proceed without undue hardship.
RECOMMENDED ACTION:
That the City Council:
a. Adopt Resolution No. 2026-083, authorizing the City Manager, or his designee, to approve and execute payment plan and lien agreements with property owners required to replace their private service lines during a meter replacement that fail due to extreme corrosion or deteriorated galvanized material. b. Authorize the City Manager, or his designee, to execute payment plans and lien agreements and related documents that have been approved by the City Attorney to implement such payment plans, and to take any administrative actions necessary to carry out the intent of this authorization. c. Ratify the City Manager’s, or his designee’s, approval of the Incidental Private Work Agreement and Waiver and Release (Commercial Account Form) for the commercial property at 1675 Sampson Avenue.
d. Authorize the City Manager, or his designee, to use and execute the Incidental Private Work Agreement and Waiver and Release (Commercial Account Form), as may be updated from time to time by the City Attorney, as a condition of the City performing private service line repair or replacement work on commercial property. This authorization applies on a case-by-case basis when the Utilities Director determines that piping, private service lines, or bypass assembly conditions have deteriorated to the point that failure is likely and could impede or delay completion of the City's Advanced Metering Infrastructure Program. e. Authorize an appropriation in the amount of $250,000 from the Water Utility Fund (FD_1570) to a newly created Capital Improvement Project titled “AMI Private Service Line Repair Repayment Program” for materials, labor, and related repair costs associated with implementation of Resolution No. 2026-083 and the Incidental Private Work Agreement and Waiver and Release (Commercial Account Form), with such funds to be used to advance costs necessary to complete eligible private service line repairs or replacement projects and subject to reimbursement by participating property owners in accordance with the executed payment plan and lien agreement.
That the Corona Utility Authority review, ratify, and, to the extent necessary, direct that the City Council take the above actions.
BACKGROUND & HISTORY:
The City of Corona Utilities Department is currently implementing a Citywide Advanced Metering Infrastructure (AMI) water meter upgrade project, which involves upgrading approximately 46,500 water meters to enable near-real-time remote meter reads and support regulatory compliance and water conservation efforts. During meter replacement activities, the City's authorized contractor, Professional Meters, Inc. (PMI), has identified several private service lines, composed of galvanized steel, that exhibit significant corrosion and deterioration. In some cases, replacing the meter can cause an already weakened service line to fail, requiring immediate replacement to restore water service.
Under Corona Municipal Code Section 13.14.090(C), property owners are responsible for the maintenance and repair of the private service line located beyond the meter connection to their property. When a private service line failure occurs, the property owner bears the cost of replacement. However, when these failures are discovered unexpectedly during a City-initiated project, such as the AMI project, it can impose a sudden and significant financial burden on affected property owners.
ANALYSIS:
The Utilities Department has evaluated the feasibility of having the City’s authorized contractors perform any repair or replacement work needed for a corroded or deteriorated private service line, as part of or at the same time as the AMI replacement project, as well as expanding payment plan options to assist property owners in paying for the costs of such repair or replacement work. Corona Municipal Code Section 13.14.060 currently authorizes payment plan arrangements for other utility-related improvements, such as conversions from septic systems to City sewer service, conversions from alternate water sources to City water service, and the purchase of additional sewer capacity. The proposed actions seek to expand this authorization, to offer property owners a payment plan option if they need financial assistance for unexpected repairs to their private service line resulting from a failure during the AMI water meter installation.
Prior to the meter replacement, the Utilities Department will notify the affected property owner of the deteriorated condition of their private service line and provide options for addressing the issue, including completing the repairs independently or authorizing the Utilities Department’s on-call plumbing contractor to perform the repairs. Property owners who choose to have the Utilities Department’s plumbing contractor perform the repairs and who meet eligibility criteria as determined by the City Manager, or his designee, may request a payment plan. No repairs will begin until the written agreement and waiver are executed.
The proposed payment plan structure is as follows:
Eligibility is limited to failures or leaks discovered and reported to the City at the time of meter installation, or within seven (7) calendar days following installation. An estimated cost will be provided to the property owner prior to commencement of work. The total repayment amount shall not exceed the actual cost of the repair work, as established in the written agreement.
The repayment period shall not exceed 24 months.
Interest will be charged on the outstanding balance at a rate set by the Finance Director.
All repair work performed by the City is subject to prevailing wage requirements. A lien will be recorded against the property to secure repayment and will be released upon payment in full.
As of June 2026, PMI has upgraded 30,274 meters or 65% of all meters. Approximately 39 accounts have been identified as having deteriorated galvanized private service lines that are at risk of failure during the AMI meter upgrade installation.
The City will initially pay for the cost of private service line repairs on behalf of participating property owners. The total cost per property will vary depending on the scope of work required and will be determined upon completion of repairs. Full cost recovery is ensured through the payment plan and lien agreement, which requires the property owner to repay the City the actual total cost, plus interest, over the agreed repayment period.
The repayment schedule and interest rate will be based on final actual costs as documented by the City. The lien mechanism provides a security interest in the property to protect the City's financial interest in the event of non-payment.
Commercial Meter Assemblies and Incidental Private Work Agreements The AMI Meter Replacement Program also includes large commercial meters. Unlike standard residential or commercial meter installations, these services often include meter and valves in underground vaults, bypass assemblies, check valves, backflow prevention devices, and associated piping. In some cases, the condition of the private service line and related fixtures is so deteriorated that the meter cannot be safely replaced without first repairing or replacing portions of the private infrastructure.
In May 2026, upon inspection of a six-inch meter at 1675 Sampson Avenue that started to fail, the City determined that the private service line, which is the property owner’s obligation to maintain, as well as pipes and fixtures connected to the main line and extending to the water meter and a secondary pipe that can divert flow around the water meter, all of which are the City’s responsibility to maintain, had experienced significant corrosion and deterioration. Due to the condition of the facilities, the meter replacement could not proceed safely without replacing portions of the private service line and associated appurtenances. To avoid prolonged service disruptions and delays to the AMI Meter Replacement Program, the property owner voluntarily executed an Incidental Private Work Agreement and Waiver and Release (Commercial Account Form), which authorizes the City to complete repairs on a portion of the private service line that is corroded, at the same time that the City completes the repairs on the City’s pipes and fixtures, and required the property owner to reimburse the City for all applicable costs for repair of the private service line. The diagram below illustrates the repair work to be completed at 1675 Sampson Avenue. The portion highlighted in blue is the City’s responsibility, and the portion highlighted in yellow is the property owner’s responsibility.
Pursuant to the Incidental Private Work Agreement and Waiver and Release (Commercial Account Form), the City will perform all of the repair work, and the property owner is obligated to reimburse the City for the cost of repairing the portion highlighted in yellow.
Staff requests that the ratification of the Incidental Private Work Agreement and Waiver and Release (Commercial Account Form) be executed for the work to be completed at 1675 Sampson Avenue, and the authorization to utilize the same agreement for future commercial meter replacement projects on a limited case-by-case basis for the following circumstances:
The work involves a non-residential account.
The private service line or bypass assembly conditions are determined to be deteriorated, corroded, obsolete, and at high risk of failure during meter replacement.
The Utilities Director determines that repair or replacement of the private service line and other affected facilities is necessary to safely complete the meter replacement or avoid significant project delays.
The property owner voluntarily agrees to execute the Incidental Private Work Agreement and Waiver and Release (Commercial Account Form) and reimburse the City for all applicable costs.
If the repair work is performed by City staff, the City will warranty the parts being replaced and the labor to install them up to twelve months from the date of installation.
This authorization is not intended to apply to all commercial meter replacements. Rather, it provides the Utilities Director with administrative flexibility to address unique field conditions that could otherwise delay meter replacement, increase project costs, or result in extended service interruptions. The agreement preserves the property owner's responsibility for private facilities, while allowing the City to efficiently complete critical infrastructure upgrades and maintain project schedules.
FINANCIAL IMPACT:
Approval of the recommended actions will result in an appropriation in the amount of $250,000 from the Water Utility Fund (FD_1570) to a newly created Capital Improvement Project titled “AMI Private Service Line Repair Repayment Program” to fund and separately track private service line repairs and replacements that may be required during the City's AMI Meter Replacement Program. These funds will be used to advance material, labor, contractor, and related project costs associated with eligible repairs performed under the payment plan and lien agreement, or the Incidental Private Work Agreement and Waiver and Release.
The City expects to recover these costs through direct invoicing or payment plan agreements secured by recorded liens, and reimbursement provisions contained in the applicable agreements. Interest collected under approved payment plan agreements will be deposited into the Water Utility Fund (FD_1570) and is estimated to generate approximately $15,000 in additional revenue over the repayment period. If needed, revenue estimates will be amended through the Fiscal Year 2027 mid-year budget update process.
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (CEQA). The activity is covered by the common sense exemption, as there is no possibility that the project may have a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This action is to adopt a resolution for a payment plan agreement with property owners for the repair of private service lines that fail during an AMI meter installation and there is no possibility that adopting this resolution will have a significant impact on the environment. Therefore, no environmental analysis is required.
PREPARED BY: JACQUELINE ZUKERAN, UTILITY BILLING AND ADMINISTRATION
MANAGER
REVIEWED BY: TOM MOODY, DIRECTOR OF UTILITIES
ATTACHMENTS:
1. Exhibit 1 – Resolution 2026-083
2. Exhibit 2 – Notification to Property Owner of Private Service Line Galvanized Pipes
3. Exhibit 3 – Property Owner Waiver and Release
4. Exhibit 4 – Property Owner Incidental Private Work Agreement and Waiver Release for 1675 Sampson Avenue