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Cost Estimates Provided, Questions Answered

Sewer District

 

August 31, 2017



SEELEY LAKE - The first of two public meetings aimed at educating property owners in the Seeley Lake Sewer District was held Aug. 23.

Presenters Dr. Walt Hill, Craig Pozega, professional engineer from Great West Engineering and District Manager Greg Robertson provided information on the project background, community and environmental impacts, the proposed sewer system, financial impacts and the process ahead. The presenters then took questions from the audience. Joe Nickell from the public relations firm PartnersCreative ran the meeting.

Dr. Hill has been a permanent resident of Placid Lake for the last 14 years and also owns land in the sewer district. He has served on various boards and councils including the water district, hospital board, planning group, community council and as an advisor to the sewer board. Hill recently retired as a professor at the University of Montana’s Department of Biochemistry.

Hill laid out the reason the community needs a sewer starting with these three words: “Because we eat.” The body breaks down all the proteins and nucleic acids we eat into the fundamental building blocks and then even further into simple compounds and individual elements. Nitrates are the main one impacting our groundwater.

The way septic systems are supposed to deal with nitrates is for the soils to filter the wastewater before it reaches ground water. This works fine in rural areas with several acres for each septic system. Density is the issue for Seeley Lake. Too many houses and septic systems in too small of an area is compounded by the rocky soil that doesn’t filter well.

For safe drinking water, the EPA lists the upper level of nitrates in the ground water at 10mg/l. Test wells in Seeley Lake have hit that level.

Nitrate rich ground water eventually comes out in streams, rivers and lakes. A 1998 Montana Bureau of Mines and Geology study shows that Seeley Lake is on the receiving end of a good portion of the town’s groundwater.

Nitrates cause things to grow making it great for lawn fertilizer but bad for the lake. In the lake, algae flourishes with nitrates and can choke out fish and make the lake less desirable for recreation.

Pozega explained how the proposed system was selected. He said they looked at every viable alternative including “doing nothing” and weighed the cost and impact of each system.

After analyzing all the alternatives Great West took a closer look at three types of collection system options, three treatment options and two site options.

Pozega said the Sequencing Batch Reactor (SBR) was selected for several reasons. A couple of reasons he gave was that SBRs can meet the permitted discharge limits, used less electricity and had the lowest 20-year cost.

The decision matrix used shows that a standard gravity collection system was selected for its low 20-year cost, low operating and maintenance cost and better public opinion.

The site located near the airport was selected for having less environmental impact and better public opinion according to the matrix.

Pozega took a stab at explaining why the district has been cut into phases. The project at full build is beyond most grants’ funding capacity. Pozega said that granting agencies will still give money to larger projects but the grants will amount to a lesser percentage of the project. By splitting it into phases, the district has a better chance of getting a higher percentage of grants versus loans.

The first phase was drawn to encompass the densest part of town.

District Manager Robertson dove into the financial impacts and process moving forward.

The district is waiting for Rural Development to respond to a request for more funds to finalize the figures but Robertson estimates that the district will receive a total of $9.8 million in grants of the $14.1 million project. That leaves $5.8 million in loans. Robertson used this estimated loan amount to calculate the monthly costs per property for debt service.

The current $14.1 million estimate is split into two projects. The SBR wastewater treatment plant is estimated to cost $8.2 million. Phase I of the collection system including the lift station and force main to the treatment plant is estimated at $5.9 million.

On top of debt service, operating and maintenance (O&M) must be paid.

Phase I property owners will be paying debt service on the treatment plant, Phase I of the collection system and O&M. The current estimate is $71 per month for residential and $104 per month for commercial property.

Of the $71 residential rate, $35 is for O&M. Robertson said that number will go up over time. He has proposed subsidies to keep that number low for Phase I until other phases can be built and help with the cost.

Phase II, III and IV will be only paying debt service on the treatment plant. In order to subsidize the O&M cost, properties in these phases will continue to pay the current administrative fee. The debt service is estimated at $16.50 per month for residential and $36.50 per month for commercial property.

The current administrative fee is $79.85 per year for properties with dwellings while non-dwelling properties pay based on the square footage of the lot.

It is important to note the difference in how the current administrative fee determines residential and commercial compared to how the debt service will be split between commercial and residential. For the debt service across the entire district, Robertson used the Seeley Lake Regional Plan’s land use designations.

Because of this difference there will be a significant number of properties that are currently paying the residential rate but will be moved to the commercial debt service rate and vice versa.

For instance, the land use plan designates nearly all of Phase IV as commercial property even though it is mostly residential.

The next step in the process is the notice and protest period. This is on hold until the district receives an answer from Rural Development in regards to the additional funding request.

Once the district gets an answer and can finalize the numbers, the board can move forward by adopting a resolution of intention to incur debt and levy assessments.

A copy of the resolution is mailed out to every property owner in the district. This mailing will include instructions on how to file a protest with the district.

After 30 days the district will validate all the protests and count them.

The value of the protest for each property is based on the amount being assessed. Properties designated as commercial will have approximately twice the protest value of a residential designated property.

If more than 50 percent of the assessed value protests, the proposed sewer will stall. If less than 50 percent protest, the district is authorized to incur debt for the proposed sewer.

The protest is all part of the public record so anyone can request a list of those properties and their owners who protested.

Public Questions:

How long do you anticipate the $71/month assessment estimate to be valid? Nickell answered that the $71 figure can be broken down into debt service and O&M. The debt service of $36 is a set rate that won’t change but the $35 O&M will probably follow the rate of inflation.

Why not tie the cost per month to the water usage? The water and sewer districts don’t have the same boundaries. Some properties in the sewer district don’t have public water so you can’t measure it. Robertson said it could be changed to that at some point in the future but is not currently in the plans.

How does the cost of the designed system compare to the cost of alternative systems being promoted in the newspaper (letters to editor & Citizens for Sensible Wastewater Solutions’ ads)? Robertson said he was not familiar with those systems. Pozega said that the designed system was the cheapest alternative in their decision matrix that could meet the water quality required by the DEQ discharge permit.

Would a resort tax help pay for expenses? If so, how much relief and how long would it take to pay it off? Hill said the community has tried to implement a resort tax three times and all three times it has been voted down. The last estimate showed that a resort tax could raise about $150,000. Depending on how the tax was set up, a portion or all of it could be used to support the sewer district reducing the O&M cost by two thirds. The $71 per month estimate could drop to $50 per month.

Why is it that we can’t get a firm estimate on what this sewer will cost? Until the project is actually bid, the engineers’ estimate is their best guess. Additionally, the district is waiting for Rural Development to respond to their extended funding request to provide final numbers for the protest period.

We have voted this down, so why are we still here debating this? Robertson explained that the vote was not required by law. Rural Development requested a vote to show “public support”.

After the vote failed, the board appealed the decision to require a vote. Rural Development accepted the sewer districts argument that the vote was not required and allowed them to continue to pursue the funding through the upcoming notice and protest.

What caused the groundwater to have a higher nitrate and chloride level in the first place? Hill said it comes down to the density of town. Too many people in too small of a space is causing the problem.

Did the district look at using cluster systems using septic systems like the one recently installed for Rovero’s? Pozega said they looked at all the options and there were several reasons why those options weren’t chosen.

There are not adequate locations for those types of systems to be discharged in town. Drain fields are large when you build a cluster system. There are also site restrictions such as the ground needing to be relatively level.

Pozega said the proposed treatment plant would treat wastewater to a higher level than cluster systems. Cluster systems require the soil to further treat the water. The better treatment of the SBR reduces the area needed to discharge the treated water.

Hill added that because cluster systems don’t take out the nitrates like the SBR does, it wouldn’t solve the nitrate problem, just distribute it differently.

Is this system expected to be a total fix or part of a bigger solutions? Pozega feels that, when looking at the whole valley, it is part of the bigger solution. You have to start somewhere. The district is aiming to take care of the highest density to get the most bang for the buck.

How will the residents actually see the reduced cost of housing construction and why are the costs up in the first place? The county health department has formed a special management area including part of the district. Standard septic systems are not acceptable in this area and systems that treat to a better level are significantly more expensive.

What are the construction estimates for future Phases II, III and IV? Pozega said that they couldn’t be very accurate in estimating construction cost for something that won’t be built for that many years. If they did an estimate they would have to include a big contingency number.

Robertson said there were planning level estimates in the 2012 Preliminary Engineering Report (PER). The executive summary of the PER is available on the district’s website seeleysewer.org. Robertson warned that those numbers are outdated now.

In the executive summary from 2012 the cost to construct the full project including all phases of the collection system is $15 million. It splits out Phase I and the treatment plant at just under $7 million (currently estimated at $14.1 million) and estimates $8 million for Phases II, III and IV combined.

If you choose not to hook to the sewer system, will you still have to pay O&M and what about vacant lots? Robertson said that is going to be a board policy decision at some time. The per month estimates that Robertson has put together makes the assumption that every lot within the district will be paying debt service and every lot in a serviced phase will be paying O&M. Robertson said that can be easily changed and reiterated that it is a policy matter for the board to make.

How many people really believe that their “stuff” doesn’t end up in the rivers and lakes? After a few laughs Pozega added that the proposed system also has an ultra violet treatment on the discharged water to make sure viruses and pathogens were killed before discharging the water.

Is the water situation really that bad that it takes the largest Rural Development grant in the history of Montana to fix it? Robertson said that obviously Rural Development felt that it was a big enough problem to provide the funding for it. The project has received a high priority from other granting agencies as well.

How many people drink from the groundwater within the sewer district? Robertson recommended asking the water district or looking at well logs on the state geographical information system (GIS).

The Pathfinder contacted the water district after the meeting and was told there are approximately a half dozen active wells where the two districts overlap.

The state GIS site indicated there are a handful along the lake side of Boy Scout road where the sewer district extends beyond the water district.

Is it true that soils absorb the nitrates but after 15 years or so the soil quits absorbing it? Hill said rocks don’t absorb anything referencing the area’s rocky soil. In other soil there is a large amount of bacteria that eat everything that comes but there is a limit and the density of septic systems puts it over that limit. What the soil can’t filter ends up in the ground water and eventually in the surface water.

The first $100,000 from Missoula County is a loan, how can you call it a subsidy? Robertson said if the project moves forward it has to be repaid, but if the project fails it just goes away.

What’s the average age of the permitted septic systems currently being used? No one knew the average but Robertson said the county records only go back to the 1970s. There are a lot of systems older than that.

The O&M shown in Robertson’s presentation says “Phase I” on it, what is the O&M for the full build out of all phases? Robertson said the estimate is for the full system to start up. He doesn’t think adding collection systems of the future phases on to it will increase the cost. The collection system has very little O&M needs.

What are the various sources of the subsidy to help pay for O&M? Robertson has asked the county commissioners for funding as well as using the district reserves. Phase II, III and IV will also continue to pay the current annual assessment. As those phases are built, the assessment would be phased out.

Why isn’t the sewer district serving 1000 instead of 500? Robertson said he couldn’t speak for the board because it is up to them but he said he was told they didn’t want to add to the district until they started putting pipe in the ground.

The district has had conversations with the state about state lease lots joining the district. Robertson said there is an interest from the state but they needed more information before they would look at joining.

There is no way for the district to force anyone to join.

What is the engineered life of this system? Pozega said the mechanical equipment is designed for 20 years and the concrete and pipe is engineered for 50 years. He noted that there is a lot of pipe and concrete that is much older than 50 years still in use.

 

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