Freeland Water and Sewer District

Sewer and Water Reuse Project

Public Meeting #3April 5, 2011

and associated firms

MEETING AGENDA AND PURPOSE

Agenda

• 6:00 pm – Open House Welcome• 6:15 pm – Introductory Comments by District• 6:30 pm – Project Status• 7:00 pm – Project Costs and Funding• 7:30 pm – Q&A• 8:00 pm - Adjourn

Purpose

• For Community Members to get answers to questions regarding:– Project Status– Why the project is needed– Project Cost and Financing– Next Steps

PROJECT REVIEW: Where are we on this project and how did we get here?

Project Review

• What water quality issues? • Why does the Freeland Sub-Area Plan require

sewers?• What is the status of the sewer project?

DOE Water Quality Assessment

DOE Water Quality Assessment

Holmes Harbor SPD

DOH Shellfish Safety Closures

Media

• NRDC Report• 20% Samples

Contaminated

Project Review

• Why does the Freeland Sub-Area Plan require sewers?

Project Review

• What is the status of the sewer project?

Project ComplexitiesFreeland Sewer and Water Reuse Project:Activities Related to Pre-design, Design, Construction, and Operation Pre-Design Phase • Complete easement acquisition to 80 acres • Pre-Design Studies:• Complete hydrogeology study of 80 acres and drainage basin (HWA)• Survey for right-of-way, treatment plant site and reuse site.• Develop and acquire STEP system access, pipeline, and side sewer

easements• Treatment plant and reuse site geotechnical investigation and report.• Suitability (incl. locating/documenting) of existing on-site systems for

STEP conversion • Secure potable water supply to treatment plant site• Electrical supply coordination with PSE for STEP systems• High voltage 3-phase electrical supply coordination with PSE for

treatment plant site and reclaimed water site Detailed Design for Construction • Design & bid phase contract amendment; assume scope & budget

negotiations.• Design and bid for membrane system equipment procurement. • Detailed design of plans, specifications & estimate for construction • Construction Management and Quality Control Plan required for

Ecology Approval.

Permits, SEPA, Review & Approval of Construction Documents• Project action SEPA review (by District)• Right of way plans & permits to construct in WSDOT & Island Co. right

of way • Washington State Department of Ecology plan review and approval as

lead agency• Washington State Department of Health (WDOH) review and

approval• Washington State Department of Archaeology and Historic

Preservation • Island County permits

Bid Phase • Call For Bids with 30 day bid period• Open and evaluate Bids, recommend for award• Notice to proceed with construction. Construction and Startup Phase • Construction (potentially multiple contracts)• Reclaimed water treatment plant• STEP collection & conveyance system• On-site system modifications/replacements converting to STEP• Effluent reuse system• Conveyance pipeline• Effluent reuse site construction.• Startup and testing• Project on line and operational • Project completion approvals—WDOE & WDOHOperation Phase Planning and Policies• Operations and Maintenance Plan drafted during design/construction

phase• Administrative and maintenance policies • STEP system access and maintenance policies• Reclaimed water use policy• Connection and developer extension policies• Cross Connection policy• Sewer System Rate Structure and Policy• LID Assessment and Collection • Debt Service• Rates & billing• Low income, deferred assessment policy/program• On-site site STEP system maintenance program• Emergency callout • Testing reporting and compliance monitoring to WDOE per NPDES permit• Hire & train administrative, operations & maintenance staff. Complete

before system startup.

Ecology Water Quality DraftFund Offer

• #5 Ranked Project on Draft Offer List

• $3.5 M Request for Design

Continued Conversations

• Public information & outreach• With our funding partners• Value Engineering process

– Review current plan and determine most cost effective approach– Refine/re-examine some program decisions– District hires independent engineering team of experts– Engage key representatives of community in process

• Costs involved, need Agency buy-in• Possible plan revision and approvals• No guaranteed outcome• Will impact schedule • Will require more planning costs

FUNDING

The Funding Dance – Government/Community Partnership

• Government investment – Appropriations from federal and state elected officials– Grants and low-interest loans from funding programs– Require project to be approved, designed, constructed & maintained– Grant/loan programs are not willing to contribute further without LID

formation (the dance)

• Community investment– Local Improvement District (LID) formation

• mechanism for repayment of debt• allows FWSD to attract further grants to bring the sewer cost down• is one step in a long process• construction requires a separate discrete series of decisions

– Connection charges • not a reliable source of payment/repayment for a new system

– Monthly rates

O&M / Admin /Short-Lived Assets

Monthly Rates

Capital FundingState/Federal AppropriationsState/Federal Grants & Loans

Interim: Bank Line of Credit

Debt Repayment / User Recovery

LID Assessments, Island County Rural Sales Tax, $100k/yr

Goal: Most Advantageous

$$ for Ratepayers

Sewer Funding Plan

Project Cost

• Please refer to project cost sheet available on FWSD website

Sample: How LID payment works - over 15 years

Caution: This is a sample comparison and is not intended to indicate what an actual assessment or interest rate may be. This is for discussion and amounts and terms will be determined at final financing.

SAMPLE LID ASSESSMENT REPAYMENT SCHEDULE    ASSUMPTIONS:   USDA-RD rate 3.25% as of Jul 1, 2010  ANNUAL PAYMENTS 15  INTEREST RATE 3.75% includes 0.5% for administration    Without Grant With Add'l $10M Grant  

  No Existing

Home With Existing

Home No Existing

Home With Existing

Home Pre-

payment

LID ASSESSMENT: $19,100 $29,600 $11,300 $21,800 $0 YEAR 1 1,990 3,083 1,177 2,271 - YEAR 2 1,942 3,009 1,149 2,216 - YEAR 3 1,894 2,935 1,121 2,162 - YEAR 4 1,846 2,861 1,092 2,107 - YEAR 5 1,799 2,787 1,064 2,053 - YEAR 6 1,751 2,713 1,036 1,998 - YEAR 7 1,703 2,639 1,008 1,944 - YEAR 8 1,655 2,565 979 1,889 - YEAR 9 1,608 2,491 951 1,835 - YEAR 10 1,560 2,417 923 1,780 - YEAR 11 1,512 2,343 895 1,726 - YEAR 12 1,464 2,269 866 1,671 - YEAR 13 1,417 2,195 838 1,617 - YEAR 14 1,369 2,121 810 1,562 - YEAR 15 1,321 2,047 782 1,508 -

TOTAL PAYMENTS $24,830 $38,480 $14,690 $28,340 $0

Low-Income Assistance

• CDBG grant for low-income property owner assistance for sewer capital cost– FWSD/Island County to apply

• State program senior/disabled low-income property owners can defer assessment– administered by Island County

• USDA-RD Housing Program for income qualified assistance for on-site connection– apply as individuals

Federal/State Funding Assistance• Each program has its own process• Funding outlook may change every year• Success improves by staying in touch and involving

funding program administrators• An organized Funding Program Tech Team

established to assist the project in funding• Met in Wenatchee Oct.‘10, in Freeland Mar.‘11• State/Federal Funders are interested in this project

Target Appropriations for Funding

• Federal appropriations – earmarks not allowed this year, better next year– pursuing Water Smart Program under Bureau of

Reclamation• Federal State and Tribal Assistance Grant

– applications not accepted this year • State appropriations

– remain hopeful for potential this year

Targeted Funding Sources

• DOE water quality programs – grant/loan application due October 2012– draft offer for design loan (not grant-eligible)– potential $5M grant for severe hardship– potential $1.75M grant for Green Project Reserve

• USDA-Rural Development– grant/loan application planned October 2012– potential $1.5M grant with $3.5M loan

More Targeted Funding Sources• Community Development Block Grant

– Grant for qualified low-income assessment relief– $1M would provide 45 homes at $21,800– Island County would be applicant

• Community Economic Revitalization Board– Design/construction assistance for service to

manufacturing sector

• WA State Public Works Trust Fund– Low-interest loans, maximum $10M per biennium – 5-year deferral for new systems

Funding – Where We Are Now

• Remain hopeful for potential appropriation to fund design process– Can delay LID formation– Avoid borrowing funds until construction

• Continue to work with funding program administrators– LID formation will be required for additional

grants/loans– Meet with Funding Tech Team in October

• Seek to reduce costs through design process

Next Steps

• Website: www.freelandwsd.com• FAQs• Water Lines newsletter• Upcoming public meeting topics:

– Finance, Project Cost Overview and LID– Sub-Area Planning & Population Growth– Water Quality Issues & Water Supply– Project Plan Alternatives & On-site STEP System– Design & Cost Control

What Questions Do You Have?

Freeland Water & Sewer District

New Sewage Collection and

Treatment SystemPublic Meeting #3

April 5, 2011

and associated firms