New Method Advanced For Sharing Orleans' Sewer Costs

By: Ed Maroney

Topics: Wastewater treatment , Municipal Finance

Wastewater planning

ORLEANS Another way to apportion the cost of the planned town sewer system is gaining ground. The current phased approach would burden those in the early stages with more of the cost for the treatment plant and disposal site that will eventually be used by all sewer customers. Putting the plant and disposal costs on the tax rate, rather than paying for those facilities in part with individual betterments, could create greater equity.

The new approach came up at last week's selectmen's meeting, held jointly with the finance committee and the Orleans Water Quality Advisory Panel. Finance Director Cathy Doane presented an amended financial model of the capital costs the average taxpayer would bear based on best-case (24 percent of the town sewered and successful use of non-traditional technologies such as nitrogen uptake by shellfish) and worst-case (52 percent sewered, without non-traditionals) scenarios. Options included putting 100 percent of costs on the tax rate, and either 20 or 50 percent on the tax rate with the remainder coming from betterments.

In one of the best-case scenarios, in which capital costs would be split evenly between the tax rate and individual betterments, a non-residential sewer customer in the initial downtown phase would be charged a betterment of $48,140, whereas a downtown second-phase non-residential customer would pay $14,167. A downtown first-phase residential customer would be charged a betterment of $33,735, while a second-phase customer would pay $8,004.

“It is disproportionate,” Doane said of the model intended only as an illustration.

Selectman Mark Mathison followed the logic, citing another model in which costs would be split 20 percent on the tax rate and 80 percent in betterments. “For downtown phase 1, the non-resident betterment is $77,024,” he said. “That's assuming phase 1 is the only phase built. The total cost of the facility and disposal area are included in that. If after a couple of years phase 2 is built, what happens to the amount of money charged for betterments connected in phase 1? Are they still on the hook for $77,000.”

“They are still on the hook for that,” Doane said. “This disproportionately puts the burden on sewer users in phase 1.”

“So would it make sense,” Mathison asked, “to look at instead of doing phase 1 and then later down the line doing phase 2, that it all be done at once so those costs are proportional to everyone in downtown instead of sticking one group with a huge amount?”

“That's one way of doing it,” Doane said.

“You want to front-end load this,” Selectman Alan McClennen said. “Get as many people in so that the cost of capital for the treatment facility is borne by as many people on the front end as possible. We talked about phases, but we didn't have this information. I think you're hitting a really important point here.”

Town Administrator John Kelly said Doane “spent a lot of time reconciling all the assumptions. It was very clear to us that phasing and betterments do not work together for the purposes of the statutes, which say that 100 percent of construction has to be part of betterment costs at the time when completed.” If the selectmen agreed, he said, scenarios could be run that would “pull the treatment plant and disposal out of the equation for betterments. If it's closer to what you think reasonable, the board could decide to put 100 percent of the remaining costs as betterments.” Those remaining costs would include the sewer collection system; customers would also have to pay for connecting their property to the sewer. That later cost is likely to be in the $5,000 to $15,000 range depending on the particulars of each property.

The selectmen agreed to submit requests for alternative scenarios to Kelly by Jan. 26 in hopes that the numbers would be available for discussion at the board's Feb. 14 meeting.