Commissionersapprove new funding method

Published on Thu, May 19, 2005 by eg Olson

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Commissioners approve new funding method

By Meg Olson

Birch Bay water and sewer district commissioners have approved a funding alternative that will bring sewer service to an area that has turned down three local improvement district petitions over 15 years.
At their May 12 meeting commissioners voted unanimously to extend sewer service to 160 parcels in the upland area north of Birch Bay Village known as the Birch Bay View community. “This was the formal kickoff,” said district manager Roger Brown of the hearing, attended by approximately 70 members of the public.

The district will now proceed with design and construction of the sewer collection system, due to be completed in December 2005. Brown said the district felt it had a mandate to put sewers into the area to address environmental concerns associated with failing on-site septic systems that could threaten water quality in the bay,
Brown said the project is running into a lot less resistance than previous efforts to fund sewers for the area, because the district has replaced the local improvement district (LID) process, which required a lengthy petition and assessment process, with a simpler local facilities charge (LFC) that will charge those who connect to the system for the price of building it, minus grant funding.

“It looks a lot like an LID but in many critical ways it’s not,” Brown said of the LFC process. The $1.9 million project will be paid for with a combination of a $775,000 in grant funding and $1.25 million in low interest loans and district reserve funds. The grant funding, Brown said, was made possible because of the expedited LFC process and the number of low-income households in the area.

The district will recover the loan and reserve funds by splitting the $1.25 million 160 ways, so each parcel in the area will pay the same $7,100 LFC. The catch is that parties that often felt they weren’t getting anything for their investment in the LID process won’t have to pay up right away.

“People who feel they have an on-site system that works feel they aren’t getting anything,” if they pay an LID assessment for sewer, Brown said. Under the LFC system they can defer connection until their system fails or they sell the property. They will still need to start paying the basic sewer fee of $24 per month and pay interest on the LFC, estimated to be 2.5 percent. Similarly, undeveloped parcels won’t be compelled to connect until they need the service, but will pay basic charges and interest.

In another twist, Brown said, the district had obtained grant funding to help low-income households with the estimated $3,000 in improvements required on their property to connect, as well as developed an installment payment plan for fees. In total, a sewer connection in this area will run a homeowner an estimated $11,000 to $13,000 including all connection fees (the general facilities fee, which pays for a share of the existing system, and the new LFC) and construction costs. The district’s installment plan will spread payment out over 15 years, for approximately $800 per year.

Asked for the commissioners’ take on the project, district chair Don Montfort said, “This is a neighborhood and state funded project that is working because both the neighborhood and district staff have put in extraordinary effort to meet the unique needs found there. It will upgrade the neighborhood, and it will also serve the greater community’s environmental health.”

Commissioners didn’t make a decision at their May 12 meeting on another proposal that would lower the LFC for homeowners that met low-income requirements, but transfer the cost burden to families that didn’t meet low income criteria.

While the project has the go-ahead now, the costs and fees have not been finalized and Brown says he expects further public meetings and discussion to decide how the cost of building the Birch Bay View system will be shared.