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Conflict over $73 million sewer project rising to the surface

No deal on the horizon for Auburn
By: Sara Seyydin Journal Staff Writer
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AUBURN CA -- Confusion and an adversarial tone seemed to dominate discussions about a proposed $73 million regional sewer plan that could greatly impact rates at a Placer County Board of Supervisors meeting last week. Yet board members approved another step forward despite unanswered questions. If the Mid-Placer Western Regional Sewer Project moves forward as currently proposed by the City of Lincoln, Placer County sewer customers in unincorporated North Auburn, Lincoln and the City of Auburn would have their sewage treated at a regional sewer plant off of Fiddeyment Road in Lincoln. The plant is currently being used to treat water for the City of Lincoln and will need capacity upgrades to serve North Auburn and possibly Auburn residents. Among the sticking points with the three entities involved are the cost to ratepayers, governance and viability of other options. The City of Auburn’s wastewater treatment plant is in compliance with current state standards, which makes raising rates on Auburn residents to go regional undesirable, according to Bernie Schroeder, public works director for Auburn and Auburn Mayor Kevin Hanley. However, due to ever-changing wastewater regulations from the state, it could eventually be cheaper for Auburn to go regional or could be mandated. Cost The total projected cost of the regional sewer project is about $73 million as of Tuesday, according to Lincoln Mayor Spencer Short. The project, which was originally proposed a decade ago, has changed due to changes in federal funding and a previously proposed larger area of service up to Colfax. It was originally projected to cost $293 million, he said. The City of Auburn’s share of the currently proposed project, if it signs on, would be about $27 million, however what portion of that the city would be responsible for paying for is also still up for negotiation. The City Council has decided in the past to move forward with evaluating becoming a part of the regional project if there is no increase to ratepayers in Auburn. Sewer rates without any subsidies are projected to rise from $60.50 per month to $76.14 per month for City of Auburn residents, if the city moves forward with the partnership and pays the $27 million. Rates for North Auburn residents in Sewer Maintenance District 1, which is run by the county, are projected to rise from $82 a month to $91.62 under the proposed project. Residents in Lincoln currently pay $32.08 a month, which Short said would stay the same or possibly lower if the project moves forward. He said the lower rate is because of Lincoln’s closer proximity to the plant and prevalence of more flat, downhill topography, which causes them to use less pump stations to move sewage. He said Lincoln made $12 million in upgrades eight years ago to increase capacity on its sewer lines in preparation for a possible regional project at the request of the county. He said Lincoln will not contribute to the $73 million price tag of the project because most of the work being done will be to build the pipelines from North Auburn, and possibly Auburn, and to increase the plant’s capacity to handle additional users. There will be a $7 million savings to the county if Auburn partners with the County and Lincoln, said Supervisor Robert Weygandt. The savings will occur because the costs of building, maintenance and future updates will be distributed amongst more ratepayers, according to Short. Hanley proposed a solution to benefit Auburn ratepayers. He said that future monies generated from the sale of electricity generated by the Middle Fork Hydroelectric plant that the county and Placer County Water Agency will take over from PG&E, after the project is relicensed by the Federal Electricity Regulatory Commission in 2013, could be spent on subsidizing Auburn ratepayers, since Auburn ratepayers voted for the hydroelectric plant and helped pay the bonds on the project in the 1960s. Supervisor Jennifer Montgomery said she agreed it could be possible for some of the funds to be used to subsidize ratepayers in Auburn, but it was unrealistic to expect there to be no cost to the city to become a partner in the project. “Is it really no fee increase and is it really the county pays for everything in infrastructure?” Montgomery asked. “I am just trying to get us closer to even having a discussion.” Weygandt suggested an ad-hoc committee of council members and supervisors assemble to discuss funding expectations further. Montgomery agreed that forming a committee would be a good next step to take, but no formal action was taken on the matter. Subhead: County approves $6M to Lincoln Eventually, the Board of Supervisors did move forward Tuesday and authorized staff to sign the Design and Environmental Review Agreement with the City of Lincoln for $6,067,000 and directed staff to negotiate the Construction and Initial Operating Agreement. Lincoln will complete the Design and Environmental Review through Stantec, a consulting firm headquartered in Edmonton, Alberta, Canada, with offices in Sacramento and Rancho Cordova. The county will reimburse Lincoln for work as it is completed, according to Bruce Burnworth, city engineer for the City of Lincoln. The monies being used for the review are from reserves in the county’s sewer funds, which have been collected from ratepayers’ monthly fees and connection costs. Included in the report will be surveys of land along the 20 miles of proposed pipeline and pump stations to evaluate the impact the project could have on plants, wildlife and creeks. Burnworth said preliminary surveys of the land indicate there are no plant species of special concern and while some archaeological items were found, they are not significant enough to be of concern. He added the most significant concern that will be addressed in the report will be what potential impact no longer putting water in the creek from the North Auburn Wastewater Treatment Plant will have on the environment in the creek. Burnworth said while the water from the plant does not derive from the creek and is a relatively small amount in comparison to water volumes throughout the year, how much the ecosystem will be impacted by its removal is still to be determined. A rough draft of the report is scheduled to be completed in November and the final draft is expected to be completed by March 2013. Construction on the project must begin in May 2013, or 120 days after providing there are valid reasons for a delay. If the construction deadline is not met, Placer County will no longer qualify for a $6 million principal forgiveness on the construction costs through the state. In the event that after completion of the environmental review process Lincoln elects not to pursue the regional sewer project, the county will receive ownership of the design documents and may elect to move forward as a county led project, according to a report prepared for the board of supervisors by county staff. Supervisor Kirk Uhler said he was concerned that the county would invest in the design and environmental review only to have a turnover of some members in city councils in Auburn or Lincoln change the terms of the deal the parties have been working toward. “Where is the county financing if a future council decides we are done, we are out?” Uhler said. “I can sit with Auburn and Lincoln all day long with the councils that exist today. What if we are not dealing with the same people?” What is a COIA? The Construction and Initial Operation Agreement will be based upon the deal proposed by Lincoln, but will formalize the agreement between Lincoln, Placer County and possibly the City of Auburn in more detail. It will establish the terms of the agreement, including governance, beginning with the start of construction on the regional sewer project and going through the first five years of operation, Burnworth said. There are no additional costs associated with creating it and it will be written by county staff and attorneys and city staff and attorneys. Where does Auburn stand? No formal proposal to take to the City of Auburn was decided upon during the board of supervisors meeting, despite a request for one from Schroeder. Schroeder said if the county came forward with a proposal, the city would expedite the process to have council take about 30 days to evaluate if it is the best option for Auburn ratepayers. “I think that was part of the action that they contemplated today, but it was deferred,” Schroeder said “I didn’t get any partial offer on their side other than to get some level of interest quantified by the council.” Hanley said any plans to go regional will include a careful cost-benefit analysis and input from the public. He added that past raises to sewer fees have been especially hard on some residents, such as seniors on fixed incomes. “I would have to see a lot of persuasive arguments and information, especially about who would pay for cost overruns, in order to convince me to go the regional direction,” Hanley said. “It’s kind of a ‘show-me’ attitude. Make a real case; otherwise the default to me is to continue updating our plant. It’s in good shape.” Control Another point of contention brought up at the meeting was who would be liable for litigation brought against the project and how the governance would work. The current language regarding liability describes a partnership between the City of Lincoln and the county, but supervisors said it is not specific enough and could put the county at risk. Supervisor Jennifer Montgomery said the daily operations of the plant would be carried out by Lincoln, but she would like to see specific language that protects the county during the construction process. “Mayor Short characterized it as not a contract, but a partnership, but from my perspective it is a contract,” Montgomery said. “That is why we enter into contracts because they have binding clauses.” When it comes to the facilities’ governance she said each partner in the joint powers agreement, which has not been created yet, would have equal power. A joint powers agreement is an agreement between two or more public agencies to jointly exercise governmental powers common to both of them. Uhler said the issue of governance has been one of his largest concerns when it comes to the project. He added that he still supports a stand-alone option, in which Placer County would contract with a private company to provide wastewater treatment, rather than going regional. “My guiding principal in this has been getting the county out of the operation and maintenance of wastewater plants,” Uhler said. He said one proposal offered by Perc Water Corporation would lower sewer rates by $20 to $25 for residents. Under that proposal, he said rates would have been locked in for 10 years and were renegotiable after that. He said the company’s technology allows for a lower cost of treatment and they are able to pay their employees less, which contributes to the lower sewer rates. Uhler said one individual accused him via email of accepting campaign funding from Perc. He said he was written a campaign contribution check of $250 after a March 13 meeting in which he voted for the Perc plan, but had his staff send the check back. “I did get a contribution from somebody with the project of $250 and I directed my staff to return it,” Uhler said. He added that no contributions have ever been a factor in his decision-making on policies. Uhler expressed frustration at the meeting that in the past, Auburn city officials have urged the county to move forward with considering them as a partner, but now aren’t willing to have the city contribute to the project. During this time he directed heated and pointed comments toward Schroeder. In response, Schroeder calmly answered questions, reiterating she was there as a liaison for the city and wanted to bring back a proposal to the council. He said he is not opposed to using Middle Fork monies for infrastructure improvements, if there are no other viable options, but believes the money could be better spent in many other ways. “The City of Auburn seems more than happy to partner if somebody else is going to pay for them to get in,” Uhler said. However, he added that he isn’t sure it makes sense for Auburn to join, either. “I don’t think they are going to incur the rate hit,” Uhler said. “I don’t think it makes sense for the City of Auburn to pay to be a partner in a regional solution at this point.” City of Auburn has another option In another potential option for the city, Schroeder said county staff projects Auburn could pay $2.6 million to have the pipes built in such a way that Auburn could add on to the project later. She said the estimate was very rough and it wasn’t a critical item at this time. Hanley said if the city were to partner in the project, it would need to be a well-specified contract, especially when it comes to who would pay the cost of unanticipated construction costs that might arise. Moving forward, he said the council is seeking input from Auburn residents on the idea. “We haven’t had that kind of debate yet because it has always been in flux and now it is sort of coming to decision time, big decision time,” Hanley said. Reach Sara Seyydin at saras@goldcountrymedia.com, or follow her on Twitter @AJ_News. ______________________________________________________ What happens to the old plants? If the regional sewer pipeline is built to send waste from North Auburn and the City of Auburn to a plant in Lincoln, Supervisor Kirk Uhler said the county’s current facility in North Auburn will only be used as storage in the event of unusually heavy water flows. Bernie Schroeder, director of public works for the City of Auburn, said if Auburn were to consider partnering in the project, under the current proposal the Auburn plant would be used for at least five years for the initial treatment of water before flowing to Lincoln for tertiary treatment. After that, she said it has not been determined what would happen to the plant. ~Sara Seyydin ______________________________________________________ Lincoln asks county for $129,000 due to “delays” As Placer County and Lincoln move forward on a proposed $73 million regional sewer project, the issue of financially labiality for delays is already at stake for more than $100,000 to Placer County ratepayers. The City of Lincoln is also asking the county to pay $129,000 for a delay in the design process. Bruce Burnworth, city engineer for the City of Lincoln, said in its original deal, the City of Lincoln proposed completing design and environmental review simultaneously. However, the county did not approve design to move forward after the board of supervisors approved the project on March 13. He said the additional costs come as a result of meetings with consultants, Lincoln, Auburn and the county where only environmental aspects could be discussed. As a result, additional meetings will be needed to address design. James Durgee, director of facilities services for Placer County, said during a board of supervisors meeting this week that county staff was currently evaluating the $129,000. Lincoln Mayor Spencer Short said the money will be paid to the consultants because of duplicative work they will have to complete. Supervisors Jim Holmes, Jack Duran and Jennifer Montgomery all expressed concerns over the money being requested by Lincoln. “If we are going to share the cost of delays, then who is going to determine who is responsible for the delay?” asked Holmes. “That is a potential challenge.” ~Sara Seyydin ______________________________________________________ How will monthly sewer rates change under the proposed regional sewer project? City Current Rate Proposed Rate Lincoln $32.08 $32.08 or less SMD-1- includes North Auburn unincorporated residents $60.50 $76.14 Auburn $82 $91.62 Yearly Difference Yearly Current Rate Yearly Proposed Rate $384.96 $384.96 $726 $913.68 $984 $1,099.44