User Agreement discussion turns to concerns over costs

SEELEY LAKE – Residents attending the Seeley Lake Sewer District Board’s special meeting to discuss the draft User Agreements (UA) June 6 had a lot of concerns and asked many questions. Most circled back to the landowners’ pocketbook and the million-dollar question: How many million dollars is this project going to cost?

District Manager Jean Curtiss explained that the UA were sent to just landowners in Subdistrict/Phase 1 and it was mistakenly sent without the word “draft” across it.

Curtiss said that the UA references the Rules and Regulations (RR) in several spots and landowners will not be asked to sign the UA until the RR are done.

Curtiss also passed out a handout at the meeting showing the estimated O&M for the first year at $233,563. Subsidies from the District reserve and Missoula County totaling $100,000 would leave $133,563 to be split among the landowners who choose to connect to the system.

If every lot were connected, the subsidized monthly O&M would run approximately $50 per month but if only 150 connect that number climbs to about $75 per month. These figures would be added to the $54.74 per month for debt service to cover the cost of constructing the system.

The board has not finalized this method of spreading the O&M cost equally amongst the users. Another method based on usage or equivalent dwelling units and a base fee will be considered.

Questions and answers from the meeting:

Will some of the properties in Phase 1 require grinder pumps and who is responsible for maintaining those? Curtiss said that approximately 25 lots in Phase 1 would need grinder pumps. The initial cost of purchasing and installing the grinder pumps will be paid by the District if the landowner signs the UA by a specific date that will be listed in the final version of the UA.

Curtiss said it has not been determined who will be responsible for the grinder pumps but she suggested that people would take better care to not flush bad things down their toilet if the landowners are responsible. Curtiss said it would probably be discussed at the June 20 regular board meeting.

Do landowners have to return the UA signed with the yes (connect to sewer) or no (decline connection) box checked and how will UAs not returned be counted? Curtiss said the District wants to know one way or the other but that unreturned UAs would most likely be counted as checking the decline box.

If landowners decline to connect, will they still have to pay? They will be required to pay the debt service that cannot exceed $54.74 per month and will be required to pay towards some parts of the Operations and Maintenance (O&M) budget. Those lots cannot be charged for the costs associated with the actual sewer service such as the operator’s wages, electricity and hauling away the sludge.

Curtiss said it has not been discussed if those who decline will have to pay toward the administrative budget that is proposed to double this year.

Are there a minimum number of people who must sign the UAs for the project to move forward? Yes, Rural Development put in the Letter of Conditions for funding that the District must have 148 signed UAs before allowing the project to go to bid.

Will the project still continue if fewer people sign up? Curtiss said it would be a board decision as to how many is too few. Board Director Walt Hill said he has talked with Rural Development and doesn’t think the 148 number is rigid.

How many vacant lots are in Phase 1? Curtiss couldn’t recall exactly but approximately 30 are vacant, 150 have houses or businesses and she was uncertain what the remaining lots were.

Why would landowners be forced to pay more for connecting later when there is money in the budget for it? Curtiss said that in order to bid the project the contractors need to know how many are hooking up. It is cheaper to do them as the project is being built versus coming back years later. There is money available now but the District cannot keep it after the project is completed.

Curtiss said landowners who decline the connection could also be charged a connection fee if the connect later but that has not been set at this time.

Why is this project still going after it was voted down? Curtiss explained that the District has followed all the laws and that the protest came up short of the 50 percent threshold so the District is moving forward.

Do all the legal owners of the property have to sign? Curtiss said yes, everyone would need to sign it if there are multiple owners. The District will put all the names that must sign for each property on the final UA sent to each property owner.

What is the unsubsidized O&M for Phase 1 by itself? Curtiss explained that the subsidies come from two places, the District reserve and Missoula County. The County committed $100,000 that will be spread over the first three years and the District could extend several years further if needed. The idea is that Phase 2 can be constructed so more users would share the cost before the subsidies run out.

How will the District pay for major repairs? There is a line in the O&M budget called Short Lived Assets that reserves $26,700 each year for those repairs.

What about pipes freezing? Curtiss said the engineers have designed the system to be buried deep enough to protect it from freezing. Some areas even have insulation planned where there might be a concern of frost penetrating deeper.

It has been proposed that the current District administrative tax will be eliminated from each Phase as their collection systems are constructed. How will the District’s administrative costs be funded? Curtiss said some of the current expenses would be going away such as the work she does for the District and the reserve fund that is being used for matching construction grants. Other costs can be absorbed into the O&M budget but Curtiss said she would look into it further.

What ways can the monthly cost be reduced? Curtiss said Seeley Lake should reconsider the Resort Tax as one way to reduce the residents’ cost. Another idea is to form a fund to help low or fixed income families so people from outside the District could help.

Community Block Grants could also be applied for but there is an issue in that they are usually to help pay for the connection but the connection is already funded in this case.

What is the total cost of constructing the system? Currently Phase 1 of the collection system and the treatment plant is estimated around $16 million. Phase 2 is estimated under $7 million.

Curtiss said the District has just received estimates for Phase 3 and 4. Curtiss said Phase 4 is about the same as Phase 1 while Phase 3 is about twice as much as Phase 1.

Based on that, the total cost of the system would be approximately $42 million. When divided by the total lots it works out to more than $80,000 per lot.

Curtiss said all the grants bring down the cost to landowners significantly and the board has already started securing grants for Phase 2.

Why has the board not looked at more affordable alternatives? Curtiss said alternatives were considered. The board also has it on their next board agenda to at least hear about some alternatives. Curtiss is concerned that alternatives involving individual systems won’t fix the groundwater problem. She also reminded people that the current grants are for the system as designed. Grants would be lost if it is not built.

The next meeting is at 5:15 p.m., June 20 at the Seeley Lake Community Hall. Visit the District’s new website at seeleysewer.org for the agenda and further information.