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HomeMy WebLinkAbout2022/04/05 - Special �*1, . C,,Ia.TF Board of Mason County Commissioners Special Meeting Agenda Commission Chambers 411 N 5Ih St, Shelton,WA 98584 April 5,2022 6:00 p.m. 1. Call to Order—The Chairperson called the special meeting to order at 6:00 p.m. 2. Cmmr.Neatherlin led the Pledge of Allegiance. 3. Roll Call—Present:Present:Commissioner District 1 —Randy Neatherlin;Commissioner District 2— Kevin Shutty;Commissioner District 3—Sharon Trask. 4. Public Hearing continued from March 1,2022 to consider the proposed extension of the Belfair sewer. Staff.Mark Neary Mark shared that this meeting is to determine if the County will go out to bid for the sewer extension. The original loan documents backed by a revenue bond for ratepayers has been changed to a general obligation bond using revenue from.09 Sales Tax. The original scope of the project as defined by the legislature had the sewer line following the freight corridor extending past Lake Flora Road outside of the Belfair Urban Growth Area(UGA). A sewer study identified a path under the railroad tracks and to the north of Log Yard Road. The Department of Commerce approved both the scope of work change and administrative change. The scope of work states"acquire necessary property rights to design and construct a sewer lift station,gravity sewer and pressure main extending from the northernmost terminus of the existing sanitary sewer system to Log Yard Road just east of SR 3...". There is about$1 million left in this grant. The Public Works Board loan goes up to$8 million. The scope of work is the same on both contracts. The final document is a schedule and critical dates if the Board moves forward. Advertisement to potential construction companies would begin April 15 and run through June 1. The County has up to 60 days to award a contract. Responses would be expected by June 15. July 1 is when an agreement would be executed with the successful bidder and associated bonds that are required would be submitted. August 1 the material submittal would be completed and approved. The Navy easement is not secured;however, additional information on going underneath the railroad tracks was received. Specifications are being developed and should have a fairly quick turnaround. On April 9,2023 Commerce incentive options C and D(if the job is completed within 36 months of signing the original loan document)for the Public Works Board loan will expire to get an interest rate reduction from 0.79%to 0.29%. On April 9,2024 incentive options A and B (if the job is completed within 48 months of signing the original loan document) expire for getting an interest rate reduction from 0.79%to 0.54%. The project must be completed by April 9,2025 under the Public Works Board loan financing. Loretta Swanson added that there is a 5%loan forgiveness provision in the contract as well. Cmmr.Neatherlin asked,regarding the meeting Mark had with Mr.Overton previously,if Mr.Overton would be interested or willing to pay for part of the project that goes through his property or if he was willing to grant an easement through his property? Mark answered that Mr.Overton is not willing to pay for part of the project but would be willing to negotiate in terms of an easement. Cmmr. Shutty asked if other beneficiaries are being engaged with regarding easements and if there is the implication that potential customers within the UGA would be treated differently? Mark answered that the current focus was on one property owner. There may be other beneficiaries in the future depending on how far the extension goes. The original plan had the sewer extend to Lake Flora Road with the goal to provide services to development outside of Mason County. Discussions would be very specific to those individuals outside of the UGA. The meeting with Mr. Overton was spurred by both a letter received from the public asking if Mr.Overton was talked with and because a majority of the extension goes through his property. The discussion was about potential options for right-of-way(ROW)purchases. Loretta added that this proposed extension was designed to accommodate a service area much larger than the individuals adjacent to the line. It could accommodate properties to the west of State Route 3 (SR 3),the industrial commercial zone,and the area between the railroad tracks and SR 3. Cmmr.Neatherlin asked what Mark meant by a grant. Mark shared that a$2 million grant was received to do the sewer design. Cmmr.Trask shared that she was in the meeting with Mark,Loretta,and Mr.Overton and did not feel like communication was cut off as far as talking with the landowner and the conversations could continue. The hearing tonight is just to decide if the County will go out to bid. QUESTIONS Greg Sypnicki asked that since there are landowners west of SR 3 that would like sewer and the line going through Mr.Overton's property is oversized to accommodate future extensions,if the line goes under SR 3 will the County have to take out another loan for that or will landowners have to pay? Has the possibility of using easements on Roy Boad Road to go up River Hill to provide service to existing homes that have septic tanks and drain fields been examined? Could grants or American Rescue Plan Act(ARPA)funds be used for that? Communications have been seen from other property owners,for example Bob Dressel and Jack Johnson,that want sewer on their properties. If the sewer,using grant and ARPA funding,went up to River Hill it would be close to allowing those property owners to connect. Was there an easement granted going toward the railroad tracks that was obtained around World War II that could prevent having to go through a long permit process? Mark answered to serve the area on the west side,the commercial industrial area,it would require the sewer line to go under the railroad tracks or SR 3 at the Log Yard Road roundabout. There is quite a bit of land variation. In terms of topography and wanting to utilize gravity as much as possible,the long-term cost of operating is much cheaper using gravity versus pumping through a forced system. This is something that will be brought back before the Commissioners to discuss how to develop that sewer plan for the rest of the Urban Growth Area(UGA). For example,getting sewer to the development by Romance Hill. The County will continue to research opportunities and grants. Loretta added there are quite a few areas within the UGA that will eventually be served by the Belfair sewer. A grant for design was received and a favorable loan for the construction was offered. For future phases,the County would regroup and discuss the next area to serve. An easement for a road crossing does not equate to an easement for utility. Judy Scott clarified that the requirement to adopt a rate increase was removed and if so,for how long? Is there any kind of fees for once properties sell,will there be payback to help recoup some costs? Mark answered that the Commissioners will need to discuss rates. The specific rate increase that was referred to previously for$87 in the prior loan agreement has been removed. The stipulation was if the County did not have enough customers,it could then potentially impact customers for$87 a month. The loan now would be a general obligation bond. As far as rate increases,the cost of operating utilities continues to raise. A rate increase should be considered on an annual basis to evaluate the Consumer Price Index(CPI) for specific areas. As Belfair continues to develop and more customers connect,it will help the need to reply on.09 funds to help cover operation and maintenance costs. It also provides an opportunity to have a larger discussion on rates and how they are structured. Revenue comes in various sources. Revenue for Real Estate Excise Tax(BEET)comes from when real estate is sold. For revenue specifically associated with property sale associated with the cost of this extension process,that has not been discussed with the Board. COMMENTS David Overton gave his impression of the meeting with Cmmr.Trask,Loretta.,and Mark. In regards to easements,that conversation isn't had until the easement is appraised which has not been done. Mason Transit had a project in the same vicinity and had a requirement from the Washington State Department of Transportation(WSDOT)for additional land which was not in Mason Transit's budget. The easement was appraised and a right-of-way(ROW)donation was entered into with WSDOT. Standard practice is to not give away things until their value is known. When dealing with a public entity,the requirement is that everything needs to be appraised rather than just negotiated so there is transparency. David is willing to work with the County. In regards to connection fees,everyone should be treated equally. If you are a property owner that already has sewer in front of your property,you would pay a connection fee. For example,Judy Scott would not pay a connection fee until she has a project to connect. Regardless of the property owner,the policy should be neutral. David is happy to pay the connection fees that the County establishes just like anyone else has in the past. That is a fair policy and is neutral as to whose project is connecting. The Commission is encouraged to move forward with the decision tonight. Phil Wolff commented,along with Jack Johnson and Bob Dressel,he is on the other side of SR 3 and could be a desired hookup. Going up River Hill could be an opportunity to make more connections in an environmentally sensitive area. The sewer originally was to fix an environmental problem. Properties that are near rivers should be the priority for public funds. Developers should pay for development. The landowner needs,with the originally proposal,to pay a significant amount of the cost. The landowner has been paying taxes on forest land which is pennies on the dollar. When the land is developed they will pay highest and best use,but for years they have been paying forest land values and taxation. Kim Savage,owner of a civil engineering firm who does a variety of development work for both public and private entities,commented that Mason County is not the only jurisdiction within the area that does capital improvement projects both from a design and a construction standpoint. Other jurisdictions do this very process. Pierce County has four large sanitary sewer projects on their docket currently going through the construction process. The City of Tacoma,Kitsap County,and City of Fircrest also. It is a very standard and normal process for a County or jurisdiction to go through to install,design,and plan for infrastructure that they see to be able to serve the betterment of their community particularly within a UGA. Building those trunk lines and main lines for future development to be able to tie into is common practice. Future developers then design and build laterals that tie into side connections which is also common practice. Kim supports the County in this effort, it is a good step in the right direction. Jeff Carey commented on the strategic view. Jeff is okay with Belfair developing,extending,and paying for sewer. How it is financed is the concern. Since the last hearing,Jeff looked at twenty different sewer entities in western Washington from Port Orchard,Sequim,Port Townsend,Port Angeles,Olympia, Shelton,etc. It is clear how they finance these extensions—the developer pays. There is not a single one that the construction goes the approach that Mason County is doing. That is concerning because these Counties and other sewer entities have latecomers and different things that the developer can recoup as things happen but not initially. Jeff has mentioned to staff,Commissioners,and the County Administrator and does not feel his point is getting across that financing has been done differently throughout the years in Mason County and for other sewer entities. He would like to see the County go back to that approach otherwise it gives the appearance that there is something not on the up and up. If all the other Counties and agencies can process sewer one way and Mason County is doing it another way,why? After all the years of having North Bay or Belfair in general,the County still doesn't have a comprehensive sewer plan. Shelton does,if it is not agreed with. It is not proper the way the County is approaching it. Herb Gerhardt commented that David Overton urged the Commissioners to act today,but looking at the agenda this is a special meeting. The agenda does not say action will be taken,therefore it is not going to be legal. This is just a hearing conclusion as far as the sewer goes. The County is in serious financial trouble and any way to get more money going is what Herb supports. Kim Wilson commented that she is not against having the sewer there. It is the way it is being financed. In the developments that Kim has been involved in,the developer brings the utilities in,develops the lots, then they sell them to builders. Builders pay the sewer connection fee. The developer of the land is getting the sewer brought up for free and is reaping the benefits because it makes the property so much more developable. The developer will make millions of dollars. The County won't reap any benefits from it until the builder builds the house and pays the connection fee. It seems like the County is padding pockets at the expense of the people that live in Mason County. Kim wants to see development done fairly. Giving something to someone that you are not going to give to every other developer doesn't make sense. There should be a latecomer connection fee or something for that developer per lot before it is sold to the builder that has to pay for the connection of the sewer. Ken Martig's comment was read into record. "It is premature to initiate an expansion of the Belfair sanitary sewage as is presently being considered. Only when an expansion can be supported by a bonafide ULID should such an expansion be initiated. With this approach the benefiters will pay the total cost. General taxpayer's dollars should remain dedicated to conducting general County duties which benefit all taxpayers as a whole. I am Ken Martig Jr.MSCE PE,principal/owner of Martig Engineering,serving Mason,Thurston,Grays Harbor,Kitsap, and Benton Counties and their Cities since 1972. I have served as an Engineering Consultant to Mason County in my tenure. In addition to my Washington Professional Civil License,I hold a specialty Professional Hydraulics License. My engineering services include community facility planning;water,sewer,and drainage systems planning and design;ULID engineering and administration;environmental engineering;geotechnical report preparation;and watershed management;among other`water related' assignments." COMMISSIONER DELIBERATION Cmmr.Trask clarified that on the hearing item summary form,the recommended action is to either take no action authorizing ad to invite bids or authorize advertising the invitation to bid. Cmmr.Neatherlin agreed that it was advertised to take legal action and an action is expected even though he disagrees. If an action to advertise an invitation to bid was taken,is it expected that the Commission would fulfill that obligation if a bid comes in that is realistic and within the amount? Time,money,and effort is spent to put through those bids. Mark answered yes,if a bid is received within the scope of cost then the County should take it seriously. It is not required to move forward with the bid. Mark's expectation is,if the County receives bids in line with the engineers estimates,he would recommend to the board to award the bid and move it forward. Cmmr.Trask added that if the bids are extremely high,the County does not have to accept them. It is not mandatory to accept a high bid. Cmmr.Trask/Shutty moved and seconded to authorize advertising the invitation to bid. Motion carried. N-nay; S-aye;T-aye. Cmmr.Neatherlin shared that this is an inappropriate use of money and a very special privilege being given to one specific individual. A cost benefit analysis has not been done to see what kind of return on investment the County could receive and it is not expected with a high confidence that one will be received. This will be a burden for many years to come,not a benefit. Without an actual cost benefit analysis to show how many units it will take to pay it back or how it is possible within the framework;the County is throwing money in something inappropriate. Going out to bid is the same as saying the County will pay for it unless it comes back with a really high cost. If this does pass,the County sets a precedence. This has never been done before. The County brings sewer to a property,not run it all the way through a property for developments. This does change things. Developers have sent in emails wanting theirs paid for. The County pays for one individual while a gentleman in Lakeland Village spends$480k for a lift station for his new line. Jeff Carey had to pay for his,he is the only one who has had a latecomer process that has actually been done. There is always accountability when these things happen. His district has spoken to the Commission and is being ignored. The county has spoken to the Commission and is being ignored. 170 emails were received and a majority of them were against this. The$87 problem was fixed; however,that does not change the arguments put forward by constituents. People have said not to take on more debt and development should pay for development. By moving forward,the Commissioners are ignoring the largest amount of public participation that he has ever witnessed in his ten years as County Commissioner. Mark,an accountant by trade,cannot give the numbers on what is to be expected. To invest money without some type of high confidence that the money comes back makes no sense at all. He will be voting against this and wishes the County had public meetings for this. The Environmental Impact Statement(EIS)was the largest rezoning since growth management was put into place without a public hearing or workshop. The same is being done now. There was a workshop for parks expansion and a union workshop for culvert expansion. Cmmr.Neatherlin wishes there was another opportunity available that was fair for everybody. Cmmr.Trask is a member of the Public Works Board at the state level. It has been mentioned that financing like this doesn't happen anywhere but in Mason County,that is not true. The Public Works Board constantly gives out loans and grants. Loans are more common because that is money that gets paid back to the state with interest. These loans are for other Counties,Cities,and jurisdictions to expand their sewers and broadband. This is what government does. Government provides services to people,it is the obligation and responsibility of Elected Officials to help constituents and those that need sewer. It saves the environment too. Large septic systems seep into water tables. It was also said that all of Belfair has spoken and that there is no one supporting the extension. A lot of people have contacted her in support of the extension. The goal is to listen to everyone,not just a select few. Cmmr.Trask is trying to do the right thing for Mason County which is to go out for bid. The bid does not have to be accepted if it is excessive. This hearing is not about how to fund the sewer,it is to vote on whether or not to go out for bid. There are a lot of funding options,not just ARPA. Many have not been discussed. It was mentioned that the County did not have town halls. In March of last year an email was sent out regarding this. Many of the people in the meeting were included but did not respond until January of this year. It is unfortunate for Mason County and its residents that they were deceived. Cmmr. Trask will be voting to go out for bid. Cmmr. Shutty commented that he does not take the decision lightly to put a project out for bid. The record has been open on the sewer project when the project began in 2017 and more than 100 days for the public hearing. The engagement with members all across the community with thoughts,opinions,and ideas about the sewer is good. Everyone is better off when there is participation in the process. The world looks much different today than it did in 2017 and in December when the hearing was first announced. There are open houses held in the community now and is another opportunity for people to engage with the County on other important projects that are happening. When this hearing was set,we were in the throes of the Omicron variant and struggling with how to manage that. The County wanted to find a way to receive comment. Cmmr.Neatherlin's point about the volume of emails,which were predominately opposed based on some of the information that was put out and resolved,speaks to how well the County was able to engage even if the outcome is disagreed upon. Cmmr. Shutty thanked staff for working so diligently and is confident in the work they have done to refine some of the issues there were concerns with. Most notably the removal of the$87 rate increases related to the financing agreement. That is a big win for the community. That was never the intent for the Commission. Even though Cmmr.Neatherlin is not in support of the extension,when the loan agreement was accepted two years ago,he would concede that it was not the intent to have a rate increase. The legislature was helpful in revising the scope and staff worked closely with lobbyists and the legislative delegation to work with the majority party budget writers in the house and senate to get the scope change authorized. Cmmr. Trask did incredible work with the Public Works Board staff to see this through so that there was clarification on the cheaper alignment that was brought forward through the engineering process. Credit is also given to Congressman Kilmer and his Deputy District Director Katy Crabtree,they did fantastic work with figuring out where in the process our naval railroad easement was. Even though Congressman Kilmer is in a different party,he has always been accessible and willing to step up and help Mason County. That was on display while Katy looked into if this needed to be approved by the Pentagon in Washington D.C.or the local naval base in Kitsap. This is an example of government actually getting out of the way. Federal partners said this can be approved at the local level. This is truly a team effort. Cmmr. Shutty is happy to have people that are experts in engineering and design,in financing,and in regulations working on this project. There are issued that need to be worked out in terms of financing. Other alternatives are available including ARPA and other federal infrastructure dollars. There is an opportunity to refine financing on this project. The real work begins now with reviewing bids and working with public and private partners to continue to pursue economic development in Mason County so that family wage jobs and manufacturing jobs can be brought into this community. With those jobs comes housing and other sales tax revenue benefits,stabilizes utility rates,and is a big picture approach. There is demand in the community to do these types of projects. Unfortunately,there was a project abandoned in 2016 that would have provided sewer up Old Belfair Highway into the River Hill area that would have been able to provide service. The County walked away from that and that is how the County is now engaging in this project. It took five years to get to this point. The development community has to be wondering if Mason County is a good partner. What is the County doing to be a good partner to the private sector? There is a lot to learn. There are great staff at the Mason County Economic Development Council that can help. There is a demand in the UGA and the County has to do its part to deliver on. Cmmr. Shutty is confident that staff will work hard to ensure that a good project is delivered for the public and that it is managed appropriately. 5. Adjournment—the meeting adjourned at 7:04 p.m. ATTEST: BOARD OF COUNTY COMMISSIONERS MASON COUNTY,WASHINGTON McKenzie SmitlVClerk6f the Board Kevin Shutty,C it Sharon Trask,Vice-Chair Rand eathe i Commissioner