Agenda - 02-15-2005-7b - Laserfiche WebLink

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Memorandum "7 Reimbursement Policy June 3, 2004 Page .3 3) Upfront payment by OWASA to the applicant -Under this option OWASA would enter into an agreement with the applicant to pay a portion of the oversized water and/or sewer main cost upon completion of the extension and dedication to OWASA. As with the previous alternative our existing availability fee structure would need to be modified to insure full recovery of costs associated with this program. PROS: - Easy to administer., - Applicant receives payment for the oversized mains upon completion of the extension,. - Excess water and/or sewer main extension cost is not added to the land or sales price to others CONS: - Potential impact on OWASA budget depending on the rate of development - Current OWASA customer base pays for a portion of growth - May result in "leap-frogging" of development - Requires tracking by OWASA staff - Can result in high connection fees for small lots with minimal system demand. Staff has reviewed the current long range plans to determine areas within the current service boundary where oversized water and sewer mains will be required. Based upon this review, OWASA's exposure for potential future reimbursement to provide over sizing of water and sewer infrastructure would be in the range of $750,000 to $1,000,000. With the changes made to the availability fees in 1999 there is currently no process or arrangement in place to provide for funding reimbursement payments. Staff' has also reviewed the water and sewer main extensions being required of the Town in the development of their new Public Works Facility. Currently the Town is to extend approximately 3,700 feet of 16-inch water main along Eubanks Road from NC 86 (Airport Road) to Millhouse Road,. Under the previous reimbursement policy the Town could have received 50% of the estimated $555,000 construction cost for the 16-inch water main extension along Eubanks Road (assuming an 8" water service was needed for their purposes). There would have been no reimbursement for any sewer main extension because current development plans indicate that all sewer mains to serve the Town's new facility are to be 8-inches in diameter. Based on the undeveloped properties that could benefit or receive service from the 16-inch water main extension and using the previous front footage and acreage fees from 1998 adjusted to 200.3, the Town could receive approximately $185,000 in reimbursement if all of the undeveloped property was fully developed within the next 10 years. OWASA's experience is that most developers never recover the full construction cost differential through reimbursements.. Since 1980 there have been 20 reimbursement agreements totaling approximately $928,000 of which only $191,034 has been dispersed. At present, of the 20 reimbursement agreements since 1980 all but four (4) agreements have expired their 10 year term. Under Alternative 3 (upfront payment) the Town could receive reimbursement for a percentage of the approximate $185,000 cost differential between the 16-inch and 8-inch water main construction cost (estimated $555,000 for 16-inch main construction and $370,000 for 8-inch main consuuction) upon completion of construction and dedication of the system to OWASA.. If the Board chose to implement this alternative a decision would have to be reached on what percentage (0-100%) of the construction cost differential was reimbursable. This information is provided to the Board for review and discussion. Prior to the development of a