HomeMy WebLinkAbout2022/07/04 - Briefing BOARD OF MASON COUNTY COMMISSIONERS' BRIEFING MINUTES
Mason County Commission Chambers,411 North 5th Street,Shelton,WA
Week of July 4,2022
Wednesday,July 6,2022
9:00 A.M. Belfair Sewer Bid Review
Public Works—Loretta Swanson
Utilities&Waste Management
Commissioners Neatherlin, Shutty,and Trask were in attendance via Zoom.
• Mark Neary discussed the proposed extension to the Belfair sewer. Bids have been received
and additional information is ready to be presented. The recommendation is to move forward
and accept a bid at the July 19,2022 Regular Commission meeting. Included in the packet
are assumptions regarding rates and capital facilities charges(CFCs)for illustration purposes.
It is not expected that the Board decides regarding rates at this time. CFCs are the rates that
individuals pay when they connect to the system. The cost of infrastructure will increase as
the utility expands,therefore the CFC charges should increase.
• Loretta shared an overview of expected project costs including land estimates,construction,
and construction services that would be contracted out for construction and inspection. This
cost will range from$5,027,500 to$5,174,500. The land is approximately 80,000 square feet
and includes an easement to construct the trunk line and a fee acquisition to construct the lift
station on. The County is working with two property owners that control the easements—the
Navy for the railroad crossing and David Overton who is willing to donate property. For the
Navy,the survey and legal description is being recorded and transfer fees for the acquisition
are underway. A contract is needed for an engineering firm to manage overall construction
and provide inspection services. The existing Commerce grant has a remaining balance of—
$1.1 million and these activities will be paid for under this grant. The Commerce loan has
interest incentives if the project is completed prior to April 9,2025. Bids are good for 60
days after opening,the last day to award would be July 26,2022. The estimated overall
project cost is$5 million. It is assumed that the Commerce loan has 5%loan forgiveness.
For revenue assumption,the CFCs are from existing permitted projects and there are no CFC
assumptions beyond 2029. It is also assumed that CFCs are reserved and used for future
capital. There are three different utility rate scenarios for comparison purposes—do nothing,
max tolerable,and gradual rate increase. Operating expenses are assumed to increase 3%
annually and existing debt to be paid off in 2027 with REET reserves. New debt service
would begin in 2024 if this project moves forward. Capital expenditures are itemized.
• Richard Dickinson shared the residential,multi-family,and commercial ERU numbers. 422
at the beginning of the year and 549 at the end. The remaining multi-family will be brought
on in 2023. In 2024 Olympic Ridge will build 20 new homes,30 in 2025,20 in 2026,and
this continues until 2030. In 2030 there will be 794 ERUs. The max tolerable rate is$114.73
which is equivalent to the$96 a month determined in 2012 inflated to today's rate. It is 2.2%
of the median income for Mason County. The estimated revenue at max tolerable is nearly
$600k,currently it is—$509k. Operations and maintenance(O&M)budget is$725,970. At
the time there is not enough revenue to cover O&M. The max tolerable rate goes up 3%per
year indefinitely. If increased by 4%, it is possible to catch up in 2040. $641,300 was
collected from multi-family last year. This year$510k has been collected so far. Revenue
will be collected until the Olympic Ridge project is built out for an additional 144 homes.
The numbers for debt service option B were shared.
• Mark added that legislature gave the County money to retire the Department of Ecology
loans. $800k per year through 2027 is coming into the Belfair sewer fund to pay for debt.
$200k to$450k is coming out of the .09 fund to help with debt and any amount not able to
cover general operational costs. The Board has secured$400k per year so that by the end of
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2027,the County will have reserved enough money to pay off all existing remaining general
obligation bonds. All that would remain would be debt associated with this project.
• Richard discussed debt service B and the debt service capital expenditures that are expected.
The total debt for 2022 will require$800k in REET,—$194k in.09 funds,and$330k in
American Rescue Plan Act(ARPA)funds for a total of$1,834,321.46. The estimated
revenue from rates in 2024 ranges from$658,391.04 to$834,764.79 and estimated total debt
is—$2.527 million for debt service B and—$2.511 million for debt service A plus—$580k of
capital expenses. This would require—$618k of CFCs,$800k of REET,and$450k of.09
funds. Capital expenditures are listed in the general sewer plan. 2027 is the last year to pay
off the existing debt. In 2026 there will be—$2.85 million deficit due to a$3.38 million
spray field expansion project that is estimated to be needed. The spray field project is
connected to growth. Last year,due to the weather and seepage,the spray field was not used
at all.
• Mark shared that as projects come up,new funding opportunities may arise through grants,
the legislature,or through the federal government. The County will also work with the
Department of Ecology to determine the extent of what the spray field will require. The 5%
loan forgiveness is given upfront. When Olympic View and Olympic Ridge is completed,
that is an additional 358 ERUs.
Respectfully submitted,
McKenzie Smith,Clerk of the Board
BOARD OF MASON COUNTY COMMISSIONERS
/,
Kevin Shutty S aron Tras Ran eatherlin
Chair Vice-Chair Co ission
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