Numbers don’t add up for opponents of Freeland’s embattled sewer project
April 17, 2011 · 10:13 AM
Cost is the primary objection for opponents of a proposed $40 million sewer system for Freeland, but no one appears to know what the real costs would be.
“This ship is dead in the water,” said property owner Lou Malzone, who’s against the sewer plan as it currently stands.
“Unless some agency comes up with a ton of money that isn’t there, this isn’t going to happen,” Malzone said Thursday.
At least one party may have a closer handle on what the costs to property owners would be as things now stand for the sewer proposal that has been in the works for years — Macaulay & Associates of Everett.
The consulting firm, hired by the Freeland Water and Sewer District, conducted a special assessment of the 471 commercial and residential parcels that would be included if a local improvement district (LID) were to be formed.
Gary Hess, district engineer, said Macaulay determined that the properties would only support an LID of about $22 million, while the district was proposing an LID of about $34 million.
The appraiser was hired to calculate the assessments that property owners would pay — based on factor such as parcel size, zoning, existing improvements, and the “highest and best use” of the parcel — but said the decline in property values and other factors made financing for the project unreachable.
The news, conveyed to commissioners verbally, was the main reason the sewer project was put on indefinite hold this past week, Hess said.
“Where’s the Macaulay report?” Malzone asked, insisting that it must contain detailed cost estimates for each parcel in the project. “That’s what everybody wants to know.”
Hess said he hasn’t received the consultant’s written report, and that he didn’t know if the district will ask for it anytime soon, given that the proposed LID formation has been postponed.
“That’s up to the commissioners,” he said.
Commissioner Jim Short said Friday the board would take up the question of the Macaulay report at its next workshop, scheduled for Monday, April 25 at the Freeland Library.
“It’s not finished as I understand it,” Short said of the report. “We can probably get it in draft form, but I doubt it would be complete enough to send out to the constituents, although I could be wrong.”
Meanwhile, ballpark figures for the project compiled by another consultant were released earlier by the district, and they too have raised the hackles of opponents.
That report was issued by Katy Isaksen & Associates, a Seattle-based consulting firm that specializes in financial planning for sewers and other utility projects.
It says the new sewer system would cost a total of $39.9 million if no additional grants are obtained, or $37.8 million if the district gets a $10 million grant to help pay for the design and construction of the system.
Hess said the district has applied for a number of grants that would fulfill the $10 million goal, but that none have been promised to the district so far.
“It would obviously be better if we got more,” he said.
The difference in total costs listed in the report is due to the difference in financing costs; estimated financing costs are $5.4 million if no additional grants are obtained, or $3.3 million if $10 million in grants come through.
District officials say there is $5.5 million in grant funding “in hand,” and the number represents a $1 million grant from the Centennial Clean Water Fund and $4.5 million from Island County funding for rural development.
The Centennial Clean Water Fund grant was used for the district’s land purchase for the system. Of the $4.5 million in county money, approximately $2.5 million was budgeted for planning and engineering, while a $100,000 annual grant would be used to make payments on the debt for 20 years.
Isaksen’s report said property owners would need to help cover $29.5 million in costs if no other grants are received, or $17.4 million if the district gets the sought-after $10 million.
If no other grants are received, a property that has the equivalent of one residential home (or ERU, for equivalent residential unit), would pay $19,100 in assessments for the new sewer system.
But that’s just the start. Property owners would also have to pay to hook up to the system.
An owner of an existing home would be expected to pay an additional $10,500 (bringing the total cost to $29,600). Those costs would cover installation costs for a new septic tank, pumping system, electrical connection, a service line to connect to a sewer main and restoration costs.
An owner of a new home would pay an additional $6,600 (total cost, $25,700). The estimate does not include the costs of landscaping and restoration after the sewer hook-up is installed.
Owners of commercial properties would pay more than residential property owners.
Current estimates for what commercial properties would pay is based on how much water would be used, based on the number of ERUs assigned to the property. One ERU equals
563 cubic feet (roughly 4,211 gallons) a month.
The connection costs for the average “small” commercial property are estimated at $11,400, and $12,400 for the average “large” commercial property.
Property owners would also have a monthly sewer bill after the system is installed. A typical residential homeowner would face a $64 bill each month.
Hook-up costs would be lower for residential and commercial property owners if more grant funding is obtained by the district.
Under the scenario where the district gets $10 million in grants, the owner of a property with one home would pay $11,300 in assessments. When added to the hook-up costs, that bill would rise to $21,800 for the owner of an existing home. New homeowners would pay $11,300, which would rise to $17,900 when connection costs are included.
District officials note that the actual charges would be different, and would be based on a “special benefit analysis” that would detail the assessment that each property owner would pay.
Those cost estimates, however, would not be the bill that property owners actually pay. The final assessments on properties would be determined after the LID is formed, so the numbers could go up or down.
“The whole thing has to be reexamined,” Malzone said. “We need something on a smaller scale, with more rational staging.”
He and other critics have urged the district to form a citizens advisory committee to work with commissioners in the next year to devise a more workable plan. Opponents also have recommended that the district commission be increased from three to five members.
Short called and advisory committee “a good idea, as long as it’s clear what its role would be.”
However it’s accomplished, the costs have to come down, Malzone said.
“Until we come up with reasonable costs, there will be opposition,” he said.
“There’s a lot more work to be done with the public and to reduce the cost of the project,” Hess agreed. “But we need to focus on not going into this prejudged.”