Letter to All residents:
December 9th, 2005
Dear Marco Island Property Owner:
In 2003 Florida Water Services Corporation, a private utility, decided to sell its Marco Island water and wastewater system. After protracted negotiations your City acquired the utility system so that citizens would have control of this vital public service. Your City Council initiated an extensive master planning process and developed the Marco Island Utilities Business Plan. Adopted in January of this year, the Plan affirmed City Council’s previous decision to pursue completion of the citywide wastewater collection system to replace the current (and future) septic tanks on Marco Island. Currently, seventy percent (70%) of sewage is collected by the central sewer system. The remaining sewage goes into individual septic systems. Because of our high density coastal development,
extensive waterways, and a high water table, septic systems are not desirable for Marco Island. In coastal areas, individual septic systems cannot adequately treat human waste, including removal of viruses, fecal matter, pharmaceuticals, and nutrients such as nitrogen and phosphates, all of which present health risks and degradation of our waterways.
The first phase of the expansion of the sewer collection system began this year in two areas. Expansion will continue over the next seven years. The purpose of this letter is to offer an overview of the multi-year project and the implication upon a property owner who does not have central sewer service available.
The total estimated cost to construct a new sewer collection system, upgrade the existing collection system to handle the additional flow capacity, and expand the wastewater treatment plan is $105.6 million. Marco Island Utilities must borrow the money through the issuance of tax exempt bonds to finance the project. The revenue required to repay the bonds will be derived from a special assessment upon only those property owners who will receive this new sewer service.
The special assessment process involves establishing an assessment district to encompass only those properties that will benefit from the improvements. Fourteen assessment districts will be established over the next seven years. To establish an assessment district, City Council will adopt an initial assessment resolution that describes the proposed improvements and the estimated cost. In the year in which the assessment district is formed, property owners will be notified by mail as to the estimated project cost for that district and the estimated maximum annual assessment imposed upon each property within the assessment district.
As each assessment district is established over the next seven years, property owners have the following options to pay:
· Assessment may be prepaid when actual costs for the new central sewer line are available. There will be a 6% discount for those who elect to prepay their assessment.
· Assessments may be deferred for a period of up to 20 years. Thereafter, payment of the assessment plus accrued interest will be due (unless a financial hardship deferment is granted). Payment is due upon transfer of property ownership.
· Assessments plus interest may be paid with the annual property tax bill in equal installments over a 20-year period. With this option, one may elect to prepay a portion of the assessment, and one may elect to pay the balance at any time. Payment of the unpaid balance is due upon transfer of property ownership.
The assessment will be based on the cost of two components. These are the “capacity cost” and “collection cost.” The first component, capacity cost, is the cost to upgrade the existing wastewater collection system and expand capacity at the wastewater treatment plant. The total cost to upgrade and expand capacity is estimated to be $38.6 million. By dividing the capacity cost by the number of equivalent residential connections (ERC) that will be served by the new system, the capacity cost is determined to be $6,298 per ERC (each existing home served by the new system). This component will be the same for all assessment districts. Grant funds received will be used to lower this cost.
The second component, collection cost, is the capital cost to provide new sewer lines and ancillary facilities to the unsewered areas of the City. This component will vary from one district to another as some districts may have more or less lift stations, more lineal feet of sewer lines, more or less gravity flow lines versus force mains, and in the seventh year, construction costs may be higher than construction costs in the first year. In other words, each geographic area is unique, and construction costs may vary from one district to another.
During the year in which a sewer assessment district is created for your neighborhood, you will be notified by mail of the maximum assessment cost. The cost will be based on engineering estimates at the time. The actual cost will not be determined until competitive construction bids are received and a contract awarded. The actual assessment cost may be lower than the “maximum” assessment cost provided to you. You will be notified of the final assessment after competitive bids for construction have been received.
While not a component of the assessment, there is a cost incurred for work on your property to take the septic tank out of service and to connect the home to the sewer main. This cost is paid by the homeowner to a plumbing contractor who is licensed to take the septic tank out of service and install a sewer line from your home to the property line. It is recognized that connecting to the sewer main adds a burden to the property owner. Multiple state and city permits must be received to take the septic tank out of service. The tank must be pumped clean and then either removed or broken in place and filled with suitable soil. A contract must be negotiated with a licensed plumbing contractor. To ease the burden on the homeowner, Marco Island Utilities has a turnkey alternative available.
Enclosed is a list of “Frequently Asked Questions” about the assessment program and a response to these questions. These include a summary of public health and scientific reports that explain why coastal communities are converting from on-site septic systems to centralized sewer systems. Also enclosed is a map depicting the future sewer districts and the anticipated year that construction will begin. We hope this letter and the attachments answer most of the questions that you may have regarding the program. If not, please feel free to contact the City’s Finance Director, 50 Bald Eagle Drive, Marco Island, Florida 34145 (e-mail: bharrison@cityofmarcoisland.com.
Sincerely,
A. William Moss
City Manager
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