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Town residents worry about wastewater hookup fees
The Town of Washington may soon find itself in the odd position of building a new wastewater collection and treatment system to which few can afford to connect .
The Rappahannock News has reviewed a proposed budget prepared by town treasurer Jerry Goebel for the new project which would require users – both residential and commercial – to pay a "sewer availability fee" in order to be connected to the system.
Initial fee estimates start at $7,500 for single user residences in Phase I and climb to $20,000 for Phase II users, those in rural residential-zoned areas. But that's just the beginning of the costs for hookups to residents and business owners.
The town council is aware of concerns about ability to pay, said Goebel, and that it is a valid question. However, he said, "Everybody needs to be on board. If you're in Phase I, we're going to ask you to connect."
Mayor Eugene Leggett said that “it would be up to the householders how to come up with the money. There may be grant money available for low income households but those people will have to pursue that themselves.”
According to town administrative assistant Laura Dodd, the initial connection fees would only include the installation of a grinder and collection tank and connection to street side. They would not include the cost of connecting the grinder and tank to the house, nor the electrical hook ups for the pump and grinder, nor the required decommissioning of septic fields and removal of plumbing from the house to septic tanks.
All of this would have to be paid for by the users independently which could mean an additional $1,000 to $2,000.
At one point during the nearly 20-year history of getting the wastewater project approved, a fund was proposed for those who could not afford the fee, recalled longtime town resident and regular at the town council meetings Mitzie Young.
"There are a lot of people who can't afford it," said Young, "but there are also people who will pretend they can't." That's a problem, she said. How can the town determine who exactly needs assistance, Young said, when they are legally prevented from surveying resident's income?
In several conversations with town officials, one way of dealing with the issue would be to simply levy the fee in the form of a lien on the property – the town would eventually collect the fee when the house was sold or transferred.
That doesn't help much, however, when you need the cash. Young also said that a lot of people would have a problem with that because it's still "an indebtedness" that they don't want.
Another suggestion floated by town officials was that since the new project would increase a home's value, that owners could get an equity loan. But in light of the current housing market, this option is appearing less feasible.
The Rappahannock News spoke to several town residents who said they were unaware of potential connection fees, and that most of what they had heard they had read in the paper. The general refrain was, "Where's the money going to come from?"
Several town residents are older and in retirement, and although they may own homes worth hundreds of thousands, their income is limited.
The fee is the minimum amount that would be required for the town to pay off the $4 million no interest loan from the Department of Environmental Quality (DEQ) over the 20 year loan period without additional sources of revenue, official documents reveal.
The fee allotment would also be contingent upon the sale of Avon Hall within the first year of the project which the town purchased in 2002 for $920,000. However, with the deteriorated state of the building, the fact the the new treatment plant will be located directly behind it, and the current state of the real estate market, the anticipated sale of the property might take longer than expected.
The $7,500 collection fee is based on one Environmental Discharge Unit (EDU) which is an estimated amount of monthly wastewater flow from each residence or establishment. For single residence users in Phase I of the project – which will encompass most of the town proper – a single EDU is currently set at 6,000 gallons of flow per month. Anything above that number would rate a higher number of EDUs and therefore a higher connection fee.
Phase I of the project would include 103 units, 42 of which are commercial establishments and 61 residential. Most residents would be assigned one EDU meaning homeowners would be charged the minimum $7,500 hook up fee. The commercial establishments would vary depending on the amount of assessed or estimated flow per month.
The fee for all Phase I users would have to be paid in full the year the project begins – currently slated January, 2009. for all Phase I users. However, the town's debt service is projected to rise from $200,000 per year to $240,000 in year six.
Phase II users (zoned rural residential) are not as fortunate, however. The rate assigned to Phase II is $20,000 payable by year five of the project.
Collection of the sewer hook up fees is assumed in years one through five, however debt service for the project is spread out over 20 years.
But the budget still assumes that all hook up fees will be collected. Any deviation in additional costs – some of which are already documented but not included in the project cost currently – would require additional revenue.
Declining revenue – either from taxes (which don't currently figure in the project) or less money from the sale of Avon Hall – or the inability of some residents to pay for the project will leave limited options to the town to pay for the project except, perhaps, to raise taxes and/or use money from the general fund.
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