Archive for April, 2011
The following is a summary of the costs involved in the project. It may explain some of your questions.
There are 3 buckets of costs that property owners will incur with the installation of the sewer system.
Capital Costs. The capital costs are the costs associated with (1) the formation of the District, (2) the engineering costs incurred for the design of the system, (3) the costs associated with installing the system along South Shore and West Shore and (4) the payments to the Town of Culver to secure the treatment capacity in Culver’s wastewater treatment facility. Based on the costs incurred and the construction bid the Board estimates the total capital cost to be around $2.4 million. This amount equally divided amongst the 155 freeholders to approximately $15,500 per each freeholder. The Board is reviewing the options available to it for the payment of these costs. These costs could be recovered solely through monthly rates and charges or the Board could institute the process to asess an exceptional benefit assessment against each served property, which process affords the owner of each lot served the option of paying the exceptional benefit at the time of assessment or spread the assessment amount over the period of years of the financing used to pay the costs. If paid over time, the amount would be increased by a statutory interest rate of 10 percent per annum. The most probable amortization period being 20 years.
Connection Costs. Connection costs are the costs associated with the property owner’s (1) connecting his buildings to the grinder station, (2) installing the grinder station, (3) connecting the grinder station to the District’s sewer main and (4) disabling the existing septic tank (draining and most likely filling with sand). These costs are dependent on the complexity of the installation, hook-up and length of the lateral run, but the Board, based on the information provided by the engineer, estimates this cost to be $2,500 – $4,000. The owner, at the time of the connection to the District’s system, will pay these costs to the contractor hired by the property owner.
Ongoing Operating and Maintenance Expenses. The ongoing costs of operating and maintaining the District’s system and payment to Culver for treatment costs will be included in a monthly rate and charge which may be billed monthly or on some other periodic basis. The current estimate for these costs is in the range of $35.00 – $40.00. If the Board determines to capture the capital costs through a monthly rate, then the monthly rate would be the total of the capital costs amortized over the length of the financing, plus the ongoing operating and maintenance expenses.
The Board is considering allocating the ongoing operating and maintenance costs on the basis of the number of bathrooms being served by each connection to the District’s sewer main. The Board’s current proposed Rate Resolution provides for rates based on a range of 2-9 bathrooms as determined by the Marshall County Assessor or by and inspection conducted by the District.
Potential Grant. The District has applied for a grant from the Indiana State Revolving Fund. These are funds provided to the state by the federal government to reduce the costs of installing sewers to areas in need. The District does not believe it will have a decision concerning the grant until July. The District is competing with other projects in the state and the relative need of the District’s residents based on a government scoring system. The Board has submitted the required application and the District has been scored by the government. The Board, at this time, has no indication whether or not the grant will be approved and funded. Grant funds received will be applied to costs the District has incurred.
Construction. The construction of the District’ system started April 25th, 2011. The Board anticipates the District’s system will be ready for property connection in late summer.
The District has engaged a utility rate consultant to provide information and recommendations to the Board for rates and charges necessary to meet the obligations of the District. Based on the consultant’s recommendations, the Board presently is considering a Rate Resolution which assumes all District costs being covered by the revenue generated solely through monthly rates and charges. The monthly rate for a 2.5 – 4 bathroom property would be $170.38 per month. As noted above, connection costs are not included in this figure.