STAFF REPORT
Meeting Date:
April 28, 2026
CONSENT
7 SUBJECT: APPROVE AMENDMENT TO SEWER LINE MARKETING LICENSE
AGREEMENT
RECOMMENDATION: It is recommended that the City Council:
1. Authorize the City Manager to execute an amendment to the existing agreement with Service Line Warranties of America, Inc. to offer service line warranty policies to residential property owners within the City of Laguna Beach; and
2. Find the recommended action is not a “project” under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378 and alternatively exempt under CEQA Guidelines Section 15061(b)(3).
SUMMARY OF THE MATTER
This report recommends that the City Council authorize the City Manager to execute Amendment No. One to Agreement No. 15-57 with Service Line Warranties of America, Inc. (SLWA) to continue offering voluntary sewer line warranty policies to residential property owners within the City of Laguna Beach. The amendment updates outdated contact information and program terms while maintaining all other provisions of the existing agreement.
There is no fiscal impact associated with this action, as the program is administered and funded entirely by SLWA. The program provides residents with an optional mechanism to manage the financial risk associated with private sewer lateral repairs.
This action supports the City’s infrastructure reliability and public outreach efforts by educating residents about their responsibility for private sewer laterals and providing access to repair coverage options.
DISCUSSION
Background:
On June 16, 2015, the City Council approved the Private Sewer Lateral Program Update, which included a discussion of a potential partnership to offer private sewer lateral warranties. Then on September 8, 2015, the City Council authorized the City Manager to enter into an agreement with Service Line Warranties of America, Inc. (SLWA) to offer service line warranty policies to residential property owners within the City of Laguna Beach. The agreement is over ten years and contains outdated contact information and program terms. The proposed amendment will update this information but all other terms will remain the same Program Overview
The warranty program offers residents the option to obtain a sewer line warranty, which provides line repairs on private sewer lines. Participating residents pay a monthly fee. Licensed local plumbers perform the repair work after calls for service. SLWA administers the program, including marketing, customer service and performing repairs in compliance with local building codes and requirements. SLWA conducts a marketing campaign by sending a mailer out to residents. The mailer also serves as an educational outreach
APPROVE AMENDMENT TO SEWER LINE MARKETING LICENSE AGREEMENT April 28, 2026
that notifies residents that they are responsible for their private sewer laterals.
The warranty program covers the resident-owned portion of the sewer service line (private sewer lateral) from the external wall of the home to the property line. All homeowners have the option to enroll in the program regardless of the age of their residence. The warranty provides coverage of up to $8,500 for each sewer line repair. Residents pay a monthly fee of $9.00 for the exterior sewer/septic line plan and/or $6.50 per month for the interior plumbing and drainage plan. This program will continue to be offered citywide to all residents regardless of their sewer service agency (that is, in both the City of Laguna Beach and South Coast Water District sewer service areas). While the proposed amendment does keep the base rate the same for now, it does allow SLWA to collect taxes and the future flexibility to increase the cost $1.00 per month in any twelve (12) month period moving forward (i.e., base rate could go up to $10.00/month and $7.50/month respectively).
Program Administration
This warranty program is voluntary, and while the City is involved in its marketing, the program is not managed by City staff. This program is run through SLWA, and the City assists by endorsing letters and other marketing materials to educate residents about the program. SLWA currently has 538 customers enrolled. Since the program launched in 2015, SLWA has performed 1,677 jobs worth approximately $1.2 million.
The warranty program does provide residents an opportunity to purchase a warranty to assist them with the financial burden of making sewer line repairs. Therefore, it is recommended that the City Council authorize the City Manager to execute an amendment to the existing agreement with Service Line Warranties of America, Inc. to offer service line warranty policies to residential property owners within the City of Laguna Beach.
FINANCIAL ANALYSIS
There is no fiscal impact as a result of this action. The program is administered and funded entirely by Service Line Warranties of America, Inc., and participation by residents is voluntary.
ENVIRONMENTAL ANALYSIS
Find that approval of Amendment No. One to Sewer Line Marketing License Agreement is exempt under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15061(b)(3) and 15308. Or in the alternative that the proposed action is not a “project” under CEQA pursuant to CEQA Guidelines section 15378
ATTACHMENTS
1. Agreement #15-57 (Pgs. 4-13)
2. Amendment to Agreement #15-57 (Pgs. 14-16)
Submitted By: Mark McAvoy Approved: Gavin Curran, for
Mark McAvoy, Director of Public
Works & Utilities
Dave Kiff, City Manager
APPROVE AMENDMENT TO SEWER LINE MARKETING LICENSE AGREEMENT April 28, 2026
Report Prepared By: Coordinated With:
Thomas Perez, City Engineer Patrick Donegan, Assistant City Attorney