Sewer yearly assessments dropBy Steve Estes
Monroe County has secured financing for the initial stages of the construction of the Cudjoe Regional Wastewater System that could save county taxpayers as much as $20 million over the life of the loan, it was announced last Thursday.
The most immediate savings, says County Administrator Roman Gastesi, is for the property owners who elected to amortize hook up fees for 20 years rather than pay the full amount up front.
The county is charging residential property owners $4,500 in system development fees. Property owners had the choice to pay the full amount up front or have it amortized over 20 years on the yearly tax bill.
Those properties in the Cudjoe inner island collection system, Upper Sugarloaf Key, Cudjoe Key and Summerland Key, were assessed this year so the county could establish a revenue stream to begin the project. About 20 percent of the affected properties paid the total up front the rest opted for yearly payments.
Using estimated financing numbers, the county charged $402 dollars this year, and had planned to charge $401 next year to outer island collection system users in Lower Sugarloaf Key and Ramrod through Big Pine Key.
The interest costs were assumed at five percent, said County Engineer Kevin Wilson. The actual financing secured last week came in at 3.5 percent, lowering the yearly fee to $310 or about $26 per month.
Those who paid the higher total last year will receive credits against future payments, said Wilson.
Reportedly the county set up financing for $80 million which it believes will cover the bulk of the project.
If further borrowing is needed to complete the project, yearly assessments will be reset at that time to reflect the cost of borrowing the money.
The Cudjoe Regional received $30 million in state grants that will be paid back by state bonds. There was $20 million in unspent monies from the existing infrastructure sales tax. The final price tag of the Cudjoe system is estimated at just over $145 million.
To secure the low-interest loans through the State Revolving Loan Fund, the county pledged proceeds from the assessments and future proceeds from the extension of the one-cent infrastructure sales tax.
Bond consultants called the sales tax a strong indicator of ability to repay and issued the county an AA+ rating, aiding in the interest rate reduction.
Gastesi said it has always been the intention to offer the lowest cost financing possible.
The cost of financing the system will not affect the bottom line on system development fees, which will remain at $4,500 per equivalent dwelling unit.
Officials estimate that the final properties will be ready to hook into the inner island collection system by late next year. The final outer island properties won’t be ready for hook up until late 2015.
The state has mandated that the county have upgraded wastewater systems in place by December 2015.
Wilson and Gastesi both admit that not everyone will be hooked into the system by the deadline because there simply aren’t enough plumbers or inspectors to go around for the estimated 8,500 EDUs that will be on the Cudjoe Regional system.
“But I believe the state will say we’re done if we have all the pipes in the ground,” said Gastesi.
Once a pipe goes in the street in front of a property, the property owner has 30 days to hook in. After 30 days, the Florida Keys Aqueduct Authority begins billing the base facility charge of about $26 per month whether the pipe is hooked to the house or not.
If the property isn’t hooked in at the end of a year, it can be eligible for code enforcement proceedings.
The lower yearly assessment cost doesn’t include costs to the property owner to run the lateral pipes form the house drain to the street pipe in the case of those properties on a gravity system. That cost is estimated to be $3,000 to $6,000 depending on the length of the run and difficulty of connection.
Right now, the county is charging homeowners $70 for a lateral connection permit that includes all the reviews and inspections needed for poop to flow.
But the Cudjoe Regional is a hybrid system using gravity and low-pressure grinder pumps. Building officials haven’t yet decided whether to hold the line on the $70 for low-pressure lateral permits as those systems require both a plumbing and an electrical permit. Residents must install a 30-amp dedicated 220 volt circuit to the breaker panel outside that will run the low-pressure pump. Thus the need for the additional permit.
Regardless of the system type, residents will also need a permit for the abandonment of the existing on-site wastewater plant that will come from the Department of Health.