• Background
• Measure 50 Changes
• Loan From State Revolving Fund (SRF)
• User Rate Increases Funding Revenue Bond
• Estimated Cost Options - Table
• Property Taxes Funding General Obligation Bonds
• Partial Funding With System Development Charges (SDCs)
• Estimated Cost of Proposed New Sewage Treatment Plant and Collection System - Table
• Allocation of Costs
• Cost to Repair Failing Sewer Mains - Table
• Cost of Delay in Implementing New SDCs
• There are Cheaper and Better Alternatives
• Other Communities and Their Solutions



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In August, we asked the City how costs for the new sewage treatment system would be divided between existing residents and new construction. The City responded: "... apportionment of costs ... is a separate document, to be received by the Council in September, and will be the subject of a special public hearing process.” As of the end of October 1997, that information has not been provided to the public. (Editor's Note: cost information was provided to the public October 1998)

Citizens For Florence has reviewed a copy of a September 12, 1997, study prepared by Eben Fodor for the Oregon Shores Conservation Coalition. Mr. Fodor is a community planning consultant. He holds a Master’s degree in Urban and Regional Planning, a Master of Science degree in Environmental Studies from the U. of O., and a B.S. in Mechanical Engineering from the University of Wisconsin. The study is entitled “Review of Funding Options for New Facilities to Address Inadequate Sewage Treatment Capacity in the City of Florence”.

We provided a copy of Mr. Fodor’s full report to the Florence City Council. The plans for the new sewage treatment plant are rapidly becoming finalized, and we believe that the residents of Florence should have access to the same information that is now available to the City Council.

We still NEED a new sewage treatment system. We still NEED to repair old, failing sewer lines. However, we also NEED TO KNOW how much it is going to cost each taxpayer. The City has not answered these questions. The Fodor report gives us an idea of how much each of us will pay for the $19 million sewage treatment plant.

We are researching other sewage treatment systems which might be more economical, and could even more effectively serve the needs of our community. According to City staff, the sewage treatment plant development plans are eight months ahead of schedule. We believe the City Council should take this time to thoroughly review ALL our options.

MEASURE 50 CHANGES

“Measure 50 is a 286-page bill that affects all revenues connected with property taxes. Bonds for capital improvements are exempted from these limits. No permanent levies are allowed. Temporary levies are allowed (for up to 10 years), as are new taxes, but they must face a general election or other election with a 50% voter turnout. Fee increases for municipal services are allowed as long as they do not represent a ‘shifting’ from property taxes.” Fodor Report.

LOAN FROM STATE REVOLVING FUND (SRF)

“The city is seeking a loan from the State Department of Environmental Quality’s SRF. The primary advantage of this loan is the low-interest rate, currently at 4.26% (including administrative charges). There is also a 1.5%, one-time loan fee charged by the DEQ.

The problem with this source of funds is that they are very limited. Only $13 million is available each year for the entire state. Funds for the current year have already been committed. The DEQ prioritizes funding needs around the state to determine the best use of these resources. It is not clear that Florence would make the ‘high priority’ list of projects, and therefore may not receive any support from this source.

If Florence does become eligible for SRF funding, there are still not adequate resources to cover the $20 million needed. Possibilities include partial funding and phased funding. The city is working on a plan to phase construction to make best use of the SRF loans.” Fodor Report.

USER RATE INCREASES FUNDING REVENUE BONDS

“The city can borrow money via revenue bonds that are repaid with revenues generated through increased sewer user charges. ... The current user rate for a single family residence is $28.90 per month*. ... funding of the new facility entirely through user rates would result in an additional monthly charge of roughly $50 to $60 per residential customer.” Fodor Report. *(Editor's Note: actual cost is $28.90 per TWO months - the following table has been revised.)

PROPERTY TAXES FUNDING GENERAL OBLIGATION BONDS

“Under this option, the entire cost of the project is paid through general obligation municipal bonds. It is assumed that the bonds would be repaid over a 20-year period at an interest rate of 8% (including underwriting and legal expenses). It is assumed that the bond issue would be put to a public vote in 1998. If approved, the city taxpayers become liable for repayment of the bond. Annual bond repayment costs are approximately $2.04 million. Based on Florence’s current estimated population of 6,625, the indebtedness amounts to $3,019 per person, with an annual cost of $308 per person for debt service.

If this bond is repaid exclusively through property tax increases (as allowed by Measure 50), it will result in a tax increase of $5.54 per $1,000 of assessed value. A homeowner with an assessed property value of $100,000 will see an annual increase of $554 on his or her tax bill. This would represent a 200% (tripling) in city property taxes.” Fodor Report.

PARTIAL FUNDING WITH SYSTEM DEVELOPMENT CHARGES (SDCs)

“SDCs are a means of charging new development for the cost of the new facilities required to serve that development. SDCs can be used only to cover the capital costs required to serve new growth. They cannot be used to make up for the lack of adequate facilities to meet current needs. The determination of the precise amount of the facility cost is fairly complex and is beyond the scope of this effort. This review offers only a preliminary assessment of a reasonable cost allocation.

Because SDCs cannot be charged retroactively, only new sewer connections from 1998 onward can be charged for the new facility. The cost for the new capacity to serve sewer connections added between 1995 and 1997 must be shared by the existing community. ... this can be roughly translated to a sewage capacity requirement of ... about 3% of the capacity of the new treatment plant. This amount cannot be included in the SDC. If the new facility does not result in any service improvement for existing customers, it is possible to argue that the remaining 97% of the new facility cost should be recovered by SDCs. ... Possible service improvements generated by the new facility include: a new outfall in the Siuslaw River, a new operations building, an ultra-violet disinfection system.” Fodor Report.

ALLOCATION OF COSTS

“The cost allocation begins with a sewage treatment demand forecast. This forecast is based on the same population projection used by Brown and Caldwell ... Assuming a per capita demand of 106 gallons per day, 41% of the capacity of the new facility will be utilized by the existing population when the new facility begins operation in the year 2000. The remaining 59% is excess capacity to serve anticipated growth to the year 2020.

Normally, the cost of 41% (current user capacity) is paid for by existing users and the excess capacity is paid for entirely with SDCs. The cost of financing the excess capacity can also be included in the SDC. However, in this case, there is already an existing plant that serves the current population. The capacity of the plant was adequate for serving the population until 1995. The plant is not outdated and does not need to be replaced. It has recently had substantial improvements (1994) and it could continue to serve the pre-1995 population for 20 more years with scheduled maintenance and planned upgrades. The planned new facility essentially replaces the existing facility. The need for the new facility is to serve growth from 1995 to 2020. Since residents will be required to replace their existing capacity, some or all of this cost should be attributed to growth. ... The resulting sewer SDC associated with the new facility would be in the neighborhood of $5,000 for each new house (not including substantial financing costs). This is about $2,880 more than the current sewer SDC rate of $2,120 per new dwelling.” Fodor Report

“One third of these (sewage treatment plant improvements) benefit existing customers while two-thirds are needed to support new development.” 2/26/96 Report from KCM Engineers to Ken Lanfear, Florence Public Works Director.

COST OF DELAY IN IMPLEMENTING NEW SDCs

“If the city delays implementation of a new SDC (and continues to allow new sewer connections) until the required treatment capacity is available in 2000, the cost burden for existing residents will be increased. ... At a net cost of $2,880 per residential connection (the difference between the actual cost and the current SDC), this delay will have a cost of more than $639,000 to current residents.” Fodor Report.

THERE ARE CHEAPER - AND BETTER - ALTERNATIVES

We have contacted a few cities about their sewage treatment solutions. The following information is a summary of the solutions developed by some of those cities. Through investigation, and the support of their citizens, they were able to reduce their costs. We believe that with a little effort, our city can find a cheaper alternative, too. Wetlands treatment is one option available to Florence. There are others. We will be furnishing the City Council with information on other cities as well, and encouraging them to consider more economical, modern alternatives to the planned $20 million plant. The Council needs to hear from you, too.

OTHER COMMUNITIES and THEIR SOLUTIONS

Orlando, Florida - The City of Orlando solved its sewage disposal problems by constructing a wetlands treatment system. They bought a farm and returned it to its natural state - wetlands. According to city officials, the system is working far beyond expectations. The wetlands now serve not only the citizens of Orlando, but also 145 species of birds (including 10 on the Endangered Species list). There are even plans to open up the area for camping.

Burlington, Vermont - A city with a population of 130,000 dealt with its sewage problems by constructing a $18 million sewage treatment system that includes an indoor “botanical garden” wetlands system. The indoor system processes 80,000 gallons per day of sewage, enough to serve about 400 homes. The wetland design, which EPA has called a “living machine”, empties into Lake Champlain.

Carthage, Mississippi - Carthage decided their small town of 500 could not afford the recommended $1.8 million conventional sewage treatment system. They elected instead to install a wetlands system similar to the system used in Arcata, and saved the city $650,000. We have provided the City Council with a videotape about their system, including an interview with the Mayor of Carthage who praised the system. According to Jerry Millsaps, Supervisor at Arcata’s public works, the only maintenance required is “a bit of chlorine and mowing the grass between the ponds”. He says the water coming out the end of the wetlands system is “clean enough to drink”. Maintenance of the system costs less than $10,000 per year. The system, installed in 1966, did not need revamping until 1991, when six new holding cells were constructed and the existing lagoons were dredged. The system is projected to meet the city’s needs for 20 more years, calculated on an expected 27% growth rate.

Martinez, California - The objective of the Mt. View Sanitary District wetlands pilot project was to demonstrate the feasibility of using sewage treatment plant effluent to create a wetlands environment for wildlife and migratory waterfowl habitat. The restoration area is 20.3 acres,with 15.2 acres in wetlands. The wetlands process about 1.6 million gallons per day (MGD) of effluent from the plant. All of the treatment plant effluent passes through the ponds into Peyton Slough, which then discharges into tidal waters of Suisun Bay. The unique aspect of this project was the use of reclaimed wastewater as the sole water source for the side. The wetlands are a popular site for the local Audubon Society and provide an educational environment for local high schools and colleges. Improvement of water quality from the treatment plant effluent has been moderately successful.

Dawson Creek, Canada - In Canada, there are now at least 67 constructed wetlands for wastewater treatment, eleven in British Columbia. Dawson Creek, B.C. (population 11,000), built a completely new sewage system, a 32-acre wetlands system next to the airport. The wetland site is “superb,” according to Martin Keeley of Friends of Boundary Bay. The average daily discharge from the wetlands to Dawson Creek is 4,500 to 6,500 cubic meters, and the water is almost completely without major pollutants or sediments. A few days at the end of winter, there is usually a problem with excessive amounts of ammonia. Winter temperatures often drop below zero, but the lagoons rarely freeze. Since its construction in 1983, there has been no need to dredge either the holding cells or the lagoon. Martin Keeley advises, “Given the political will to explore and utilize this technology, large amounts of urban waste can be treated.”

Florence, OR - According to the City’s consultants, Brown and Caldwell, the current Florence treatment plant is designed for between .75 million gallons per day (MGD) and 1.5 MGD of raw sewage, with a capacity to handle 2.5 MGD for short periods of time. The consultants have recommended building a $20 million sewage treatment plant designed to handle an average of about 2.2 MGD, with an extra storm capacity of 6.9 MGD per day, and would require 150 acres of land for sludge disposal.