Sewer fund doors keep closing

The open doors to procure financing for Monroe County’s remaining central wastewater systems, the largest of which is the Cudjoe Regional system, seem to be closing or swinging shut on county officials.

County officials say that about $230 million is required to build the Cudjoe Regional system and the smaller remaining systems at Duck Key and Long Key.

All of Monroe County is under a state mandate to upgrade wastewater treatment to AWT (Advanced Wastewater Treatment) standards for plants and/or BAT (Best Available Technology) for on-site septic systems, or those that will treat single-family homes.

That upgrade, states the mandate, must be completed by July 1, 2010, a mere 14 months away. And county officials admit that it won’t be done.

Last year, the state Legislature authorized $200 million in bond funding, at $50 million per year over four years, to help Monroe County pay for the construction. That authorization was a parting gift to Rep. Stan Mayfield, who died later that same year. The money was not allocated this year, and chances are, according to State Rep. Ron Saunders, it won’t be because the state is facing a fiscal crisis that dwarfs the county’s crisis at this point.

The US Congress authorized, and allocated, $100 million to the Keys through the Army Corps of Engineers several years ago. About $7 million of that money made its way to the Keys until this week when $25 million was released. However, none of that funding comes to Monroe County. Instead it goes to Key Largo Wastewater Treatment District, Marathon, Islamorada and Key West. Should additional money be released under that program, Monroe County won’t be in line either.

County staff has developed a financial proposal for building the systems that is three-tiered in its approach.

The first tier is a combination of special assessments (hook up fees) and an additional one-cent sales tax. Though county officials have long been talking of an additional one penny sales tax to fund sewers, the request has yet to be made.

And Saunders has said he wouldn’t support it at the state level. He said he doesn’t feel as though those municipalities that made significant progress should be burdened paying for infrastructure for those that didn’t, and also doesn’t like it that sales tax are regressive tax and take far more percentage of income from those in lower economic levels than from those in higher brackets. He also said he doesn’t believe the Legislature would support allowing the county to collect another penny in sales taxes.

The hook-up assessments, which the county expects to begin levying later this year, if they’re held at the current level of $4,500 per equivalent dwelling unit, should raise about $175 million toward the total, according to the financing report.

The second tier is the exploration of a public-private financing partnership. That partnership could take several forms, the two most conducive to the county’s needs being a private loan for construction completion with a payback from operational revenues either as a percentage of income or interest on the principal; or having a company come in and build and operate the system from its own pockets.

The third tier is a proposal to have the Florida Keys Aqueduct Authority bond the remaining money needed from the assessments and the eventual operational revenues.

That scenario is the least desirable one for county officials, however, because it does ask the property to fund the entire cost of construction for the remaining systems, a bill of about $23,000 per EDU.

Several county commissioners have already said that the final proposal is not one they can live with. They have said they feel asking every property owner to pay $23,000 for the construction of the system, in addition to the high monthly sewer bill that will arise after the years of delay in getting the projects started, will simply be a siren song for many residents here. They will be unable, or unwilling, to pay the assessment and will instead move out of the county.

FKAA officials have also voiced their displeasure with the final proposal.

To date, with the mandate deadline 14 months away, the Board of County Commissioners has yet to settle on a financing proposal and staff is still researching options.

County Mayor George Neugent said that he expects the state will give the county a break on the deadline because state officials know that Monroe County can’t meet the deadline. In the annual work program conference, now scheduled for early June, the state Department of Community Affairs and Administration Commission are expected to agree to a timeline for wastewater system completion of 2014.

That agreement would allow the state Department of Health, which oversees on-site systems, and the state Department of Environmental Protection, which oversees package plants, to hold off on enforcing the mandate against all those slated to be hooked into a county-supplied central system. That suspension would require a solid timetable from the county, however, as to project phase implementation and completion, an unknown at this point with financing of the system still very much up in the air.

That timetable, says FKAA Executive Director Jim Reynolds, would be hard for his agency to agree to because it allows for no “bumps in the road.”

All the financing would have to be in place, and construction could not be delayed for any reason, said Reynolds.

Design of the Cudjoe Regional wastewater plant is nearly complete and the county is currently talking with firms about setting up the assessment program for the approximately 10,000 EDUs remaining. FKAA has said they can be ready to put shovels in the ground for the treatment plant by September or October this year if construction money is forthcoming.

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