Wastewater assessments may decreaseBy Steve Estes
Chances are good that the first year assessment for sewer hookups on properties located in the Cudjoe Regional outer islands collection system will be lower than first anticipated.
The overall principle assessment amount won’t change. That will remain at $4,500 per equivalent dwelling unit.
But the yearly assessment, originally estimated at $402 yearly on a 20-year amortization schedule, will be lower than that, says Kevin Wilson, county engineer.
“We won’t know how much lower until we find out the actual cost of the money we’re going to have to borrow,” he said.
The $145 million Cudjoe Regional project, which will serve about 8,800 EDUs between Lower Sugarloaf Key and Big Pine Key, is being paid for from three primary sources.
The county is using $20 million in previously unspent infrastructure sales tax money and $30 million in state grant monies. The hook up assessments will account for about $39 million and the rest of the money will come from a recently approved extension of the one-cent infrastructure sales tax, or about $55 million.
But to get the system to the finish line even close to the state mandated deadline of Dec. 31, 2015, the county will have to borrow money from somewhere to be paid back as all the funds from the sales tax and assessments come in.
It is the cost of that borrowed money that looks favorable for the county right now, said Wilson.
Original estimates that were built into the amortized assessment payment schedule called for borrowing at about five percent interest.
But the county is slated to grab about $40 million over the next two years, $20 million by itself as the financier and $20 million through the Florida Keys Aqueduct Authority as the project manager, from the state Revolving Loan Fund.
That money right now, says Wilson, is about 2.4 percent.
“We won’t know what affect that has on the yearly assessment until we run all the numbers,” said Wilson.
He says that run will probably finish sometime in August and then they’ll be able to announce the new yearly assessment.
Property owners in the inner island collection system, Upper Sugarloaf through Summerland Key, will see some downward adjustment in their yearly assessment for the coming year as a result of the lower cost of borrowing the money.
Wilson said that staff will work up a new assessment based on the financing numbers and stretch that out over the remaining 19 years of the assessments for the inner island system.
“People will get credit going forward for the overage they paid this year,” said Wilson.
Following the initial $40 million borrow, the county will have to borrow again to cover the remaining $20 million or so to complete the system
“We will make amortization adjustments at that time again, yearly if we have to, so that people aren’t being charged more than the county is paying for the money,” said Wilson.
About 18 percent of the affected property owners in the inner island collection system have already pre-paid the assessments, resulting in less money the county will have to borrow to finish the system on time.
As property owners begin to pay off the full assessments, as some will do over the 20-year life of the program, that will also affect the final amortization rate, which is why Wilson says that adjustments might come yearly.
There is also hope on the horizon, though less, that the state will continue to issue $50 million in state money up to the full promise of $200 million for the system.
That grant money, says County Administrator Roman Gastesi, can be applied directly to principle in the future and bring the amortization schedule down even lower.
Also built into the financing program is a mandatory over-collection for SRF loans. Any of that excess money can be put back against principle.
That could mean that the yearly assessment fees could disappear in the last three to four years, said Wilson.