The Committee of 100 | FYI Archives

New Castle County Special Services Manager Rich Przywara promised that as soon as Council approved the Southern NCC Sewer Plan, he would begin building it. Council unanimously approved it via an amended Resolution 06-069 at its March 26th meeting and Rich had 3 construction contracts and 3 RFPs on Council's March 31st Friday Purchasing Report. One RFP was advertised in The News Journal April 12th and 3 construction contracts April 13th. Tracy Surles is working with Purchasing to get the remaining 2 RFPs advertised asap. Rich has secured the construction staging area and is in the process of hiring a project engineer.

Resolution 06-069, as Amended by Oral Amendment No. 1, echoes County Executive Chris Coons' commitment that the "path forward," in providing for wastewater treatment and disposal in the Southern Sewer Service Area, further environmental stewardship; support the establishment of more livable communities through effective planning and partnership; distribute risks, costs, and benefits in a fair and equitable manner; and ensure that the Southern Sewer Service Area be financially self-sustaining.

With a mandate from the Comprehensive Development Plan and the New Castle County Code to "provide for sewering the Southern Sewer Service Area (SSSA), an area roughly bounded to the north by the Chesapeake and Delaware Canal, to the south by Middletown, to the west by Maryland, and to the east by the Delaware River," and based upon the results of the Malcolm Pirnie Southern Sewer Service Area Wastewater Program Evaluation, as well as input from the State, stakeholders, and the public, Council approved a "path forward" that provides treatment and disposal to a core area in the short term "while evaluating regulatory, technical and financial issues for the long term."

The short-term plan calls for purchasing capacity from Middletown and, to that end, Council also approved Resolution 06-070 Authorizing the County Executive to sign an Agreement with Middletown to pay up to $3,200,000 for the permanent purchase of 100,000 gallons per day (gpd) of sewer capacity plus Middletown's annual residential user rate for the temporary lease of 150,000 gpd. The Middletown Council subsequently approved the agreement, as well. In addition to capacity from Middletown, the short-term plan calls for the County to use allocated, but currently unused, capacity at Water Farm #1.

The short-term capacity from Middletown and Water Farm #1 is guaranteed first to schools and facilities owned by the State or County which "shall receive full capacity determined to be necessary," whereas "private developments may receive a prorated portion of their ultimate requirement." Developments planned for the Central Core and those planned to be permanently sewered by Water Farm #1 will receive priority. The cost for providing the interim sewer service will "be paid by those using the capacity."

What that cost will be has been part of the heated debate, with estimates ranging from $15,500 to $22,000 per dwelling unit depending upon the escalation rate for the Annual Capital Recovery Fee (CRF). The "Guiding Principles" for financing the SSSA are that growth pays for itself--both operating and capital; the County retains a unified sewer district, including both North and South; and the plan provides a sustainable business model for the short and long term. The estimated cost of the Central Core Transmission System is $30-35 million, the Middletown purchase of capacity and connecting infrastructure $4.7 million, and the Water Farm #1 connections $2.5 million. Engineering studies and design for the long-term solution are estimated to cost $5-10 million.

Sixty million dollars in prior bond authorizations remain to finance the short-term plan and evaluation of long-term options. To pay for the SSSA construction, Ordinances 06-041 and 06-042 were introduced at Council's April 11th meeting. Together the Ordinances change sewer-capacity concurrency requirements to provide for the same standard everywhere in New Castle County. Currently Capital Recovery Fees are paid North of the Canal and Impact Fees South. The Ordinances consolidate sewer connection fees in Chapter 38 and replace the Impact Fees with Capital Recovery Fees (CRF) which "shall be paid by any property owner connecting to the New Castle County sanitary sewer system." The amount of the CRF will be determined by the Department of Special Services. In moving the Lateral Fee to Chapter 38, Ord 06-041 modifies the payment timing from "time of connection permit application" to "time of building permit application" unless there is no building permit. Ord. 06-041 also creates a separate Sewer Inspection Fee, currently part of the Lateral Fee, and establishes a SSSA Interim Service Charge "paid in consideration for the County providing interim sewer service in the SSSA" with the charge "based upon the cost of operating and maintaining such interim service."

The existing Sewer Impact Fee of $8,164, adopted on December 31, 1997 along with the Unified Developed Code (UDC), was intended to escalate by 6% annually. If the escalator had been adopted (which it was not), the Sewer Impact Fee today would be approximately $13,800. The Capital Recovery Fee is intended to ensure that growth pays for itself under a "sustainable business model for the short and long term." To establish the SSSA Capital Recovery Fee, the County has committed to retaining "a qualified firm" to conduct a rate study, establish the amount of the CRF, and provide the justification for the CRF. An escalator is again at play. The Administration's preliminary calculation estimates that the CRF will rage from $15,500, with an escalation rate of 5%, to $22,000, if the escalation rate is 0%.

Because the sewer fund will make a loan to the SSSA to cover operating cost deficits during the early years when the system operates at a loss due to the small number of customers, future SSSA customers will have a surcharge on their bills to repay this loan with interest. In addition, participants in the short-term plan will pay an Interim Service Charge of between $1,000 and $2,000 per EDU to cover the cost of the interim capacity.

One of the biggest problems with the Coons Administration's initial proposal, as well as Council Resolution 06-069 affirming it, was the uncertain time frame between the short-term solution, which taps unused capacity from both Middletown and Water Farm #1, and the long-term solution, which aims to provide permanent sewer treatment for the anticipated buildout of Southern New Castle County. The short-term plan would provide "some sewer service in the SSSA over the next 5 to 7 years while allowing NCC to refine its long-term strategy." Five to seven years is simply too long to not know if and how sewer service will be provided on a more permanent basis. That time frame would make planning for economic development nearly impossible. Councilperson Bill Bell offered an Oral Amendment that requires a report, within 18 months of commencement of construction of the Central Core, that will provide an "analysis of available sewer capacities" in the SSSA. If the report reveals that the County will be unable to provide capacity to any plan active or recorded as of March 9, 2006 outside of the Central Core transmission system, "alternative sewer disposal options will be considered by the County." That report will provide part of the answer, but not all. Long-term options remain uncertain.