Agenda - 03-03-1999 - 9c - Laserfiche WebLink

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_^.. _ _. _r-_. ... - --- Clarify with the University. and appropriate government entities the phrase "benefiting party" is the Sales and Purchase Agreements. Rationale The Sales and Purchase Agreements aze over twenty years old. Circumstances have changed and the climate is different from that which e.Yisted at the time of the agreements. We await the staff report before commenting on.whcther or not to recommend revision of the agreements. However, we believe the phrase "benefiting party" is used to both justify subsidies or• deny them, depending on how the teen is defined. We agree with OVtrASA's counsel Robert Epting, who has suggested that the pbuasc could be construed to include the community in general which benefits when thc• public water supply and the environment are protected (Sec Attachment C). Backgronad Infarmatian Retrofitting existing neighborhoods for sewers has always been expensive; historically homeowners in Chapel 1:~ill have been very reluctant. to~ petition for sewers until there was a crisis, because of prohibitive costs. From OWASA's inception in 1977 until 1993, only 6 retrofitting projects occurred, 5 of which received subsidies from either Clean Water Bond money or Community Development grants. In the 1980's, the General Assembly authorized two additional half percent local sales taxes with a requirement that municipalities use part of ~e revenue for water and scwer.ptuposcs. The . legislature also provided in the sales tax law that the NC Local Government Commission could exempt a city from that requirement if its water and sewer needs had beta met. The Town, by virtue of OWASA's ownczship and operation~of the water and sewer utilities, requested and received exemptions from the early 1980's through 2992-93. As a result of the Town s requcsi and . receipt of the exemption, about $5:3 million dollars was available for general fund purposes. In 1993 the Town did not receive as exemption and allocated about $350,000 of 1993-94 sales taxes to help pay for sewers in the Mount Bolus, Glen Heights, North Forest Hills, and Sherwood Forest neighborhoods. The ratio of this amount, i.e. 5350,000, to the total construction eosu for those neighborhoods became the basis of the Town's policy of contributing approximately 16% of sewer project costs to OwASA to~reduce assessments. Again in 1994-95 and 2995-96, the Town received a partial exemption from the Local Government Commission. Those funds were earmarked by the Council for sewer projects for Markham Drive, Morgan Creek/Mason Farm, and Patterson Place.. (The amount designated for Markham Drive was 16% of project costs; Morgan Crcck less than 16%, and Patterson Place more thaw 16%). The NC legislature allowed the 112 cent sales tax required allocation for water and sewer needs to expire in 3une,199fi. Concuaent with the Town's action to reduce sewer assessments in 1493, the OWASA Board of Directors adopted a policy of assessing property owners for construction costs at a-charge of S50