Private Sewer Lateral (PSL) Loan Program

What is the Private Sewer Lateral Loan Program?

Sanitary District No. 2 (SD2) established the Private Sewer Lateral (PSL) Loan Program to loan funds to property owners within the District to replace any part of a PSL that is needed for the PSL to pass a PSL pressure test as set forth in Municipal Code Sections 21.20.0004, 21.20.060 and 21.22.020. Each property owner will continue to own and maintain the entire PSL regardless of whether it is included in the program, and the entire PSL will be required to pass a pressure test within 180 days of the sewer permit issuance date in order to receive the grant. This one-time grant loan will be funded by the District on a first-come basis.

Where does the funding for the program come from?

The funding for this program comes from SD2's capital budget and a total of $125,000 for two fiscal years (FY 2022-2023 and FY 2023-2024), has been allocated to fund the program. The program began on September 15, 2020, was continued on June 21, 2022 through Resolution No. 09/2022 and will continue through June 30, 2024, unless before that time the allocated funds are exhausted.

What loan amounts are available?

The maximum loan amount will be $25,000 with a payback period not to exceed 10 years at an annual interest rate of 3.0%.

How do I know if my PSL qualifies for the program?
The private sewer lateral qualifies for inclusion in the PSL Loan Pilot Program when:

sewage overflow or malfunction has occurred on the property; or the adjacent sewer main is being improved or roadway is being paved as part of the Capital Improvement Program (CIP) led by the Town Sanitary District No. 2, or other governmental agency
the property owner is unable to obtain private financing for their required PSL projects and are able to provide written documentation from a financial institution that they are unable to qualify for private financing at an annual interest rate similar to the District’s (3.0%).

The property owner must enter into an Assessment Agreement providing that the loan amount be added to the property tax as an assessment to the property.

When do I get a sewer permit if I have been approved for a loan?

If an application for the PSL Loan Program is submitted and approved, the property owner will be required to submit an application for a sewer permit to the District for review and approval prior to commencement of work on the PSL. Permit fees for the PSL Loan Program shall be “waived” or issued at no cost to the permittee. If any sewer work is begun on the property without an approved sewer permit, the property owner will not be eligible for any District or Town funding assistance.

Other important information you need to know.

A property owner is disqualified from the PSL Loan Pilot Program, if the property owner has previously received a grant from the District’s PSL Loan Pilot Program within the last 10 years; or if there are records on file that the PSL has passed a pressure test within the last 10 years; or if the District Manager, or that person’s designee, has determined it is in the best interest of the District.

The program went into effect on September 15, 2020. Reimbursements for work completed prior to that date are not authorized under this program, but may qualify for reimbursement under the pre-existing program.

How do I apply for this program?

To apply for the PSL Loan Program, you will need to submit an application. Please click here to download the application.