Nothing herein shall prevent the repair, extension or alteration of any existing private on-site sewage system which was installed or has received a permit from the city prior to the effective date of this Code; provided, however, that in the event the cost of the repair, extension or alteration to any existing system exceeds $500, the city may, in its discretion, require the property owner to install one of the three private on-site sewage systems authorized herein and to otherwise comply with the provisions hereof.