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Council unveils sewer costs
By Bryan Dreilich, Sooke News Mirror July 4, 2001
The owner of a single-family dwelling on a lot valued at $64,000 with total land and improvements assessed at $192,000 will pay between $572 and $779 annually for a sewer system, depending upon which of three options for capital cost recovery Sooke council chooses. The tax range includes an estimated annual operating, maintenance and user fee of between $170 to $250. It does not include an estimated $3,300 one-time hook up fee.
Property owners in the districtís proposed sewer specified area had an opportunity to see how much they would be taxed should a $25-million sewer system be built.
At a June 26 open house, the Sooke sewer study steering committee unveiled three repayment options for 20-year $8.24-million loan, its portion of the project. The District is hoping it will receive a federal/provincial infrastructure grant this summer to make up the difference.
The first option for property owners is based purely on the B.C. Assessment land value of each property.
"You put it all in a pool, and if you own one per cent of the pool, you owe one per cent of the costs," municipal engineer Gary Smirfitt said.
The second option is similar but is based on both the B.C. Assessments Land and Improvement values.
The third option is a parcel tax modified to reflect current development on the property. For instance, explained Smirfitt, a single-family dwelling and a duplex on properties of the same size would pay different taxes. The duplex, which would generate two sewer units, would pay twice as much as the single family dwelling, he said.
All three options separately would result in $744,000 of tax revenue annually, the amount the district needs to collect over 20 years to pay down its $8.24-million loan.
Councillor John Farmer, who also chairs the sewer study steering committee, used a single family dwelling on Felderhof as an example of the three options.
The property has a B.C. Assessment Land value of $64,000, and in option one the owner would pay $429 annually.
With the combination of land and improvement value, the property is assessed at $192,000, so under option two the owner would pay $590 annually.
In option three, because the house is a single family dwelling, the annual payment would be $402. Farmer said nearly all residential units have an estimate of $402 under the third option.
"For a residential home with a suite, your costs towards the capital costs are going to go up under option three," he said.
The figures provided to property owners in the specified area were slightly misleading because they are based on present day borrowing cost estimates, which carry an interest rate of six per cent.
Additional notes supplied by the sewer study steering committee estimates that the interest rate for borrowing in the fall of 2002 to be 6.75 per cent, according to the municipal financing authority.
"We looked at every individual property, and came up with the best estimate to date," Smirfitt said. "Weíre trying to give you the facts, but until you borrow the money, you donít know."
Farmer used his own commercial building that houses Wave Music and Country Craft furniture on Sooke Road as an example of how much a commercial property would pay.
Under option one, the B.C. Assessment Land value is $165,000, and Farmer would pay $1,107 annually. Under option two, when improvements are tacked on , the property is assessed at $268,000, and Farmer would pay $823 annually. Under option three, because the building has several different spaces for lease, Farmer would pay $2,012.
As for a time frame, Farmer said if the grant is awarded to the district, property owners within the specified area will be notified by mail in September, and if more than 50 per cent of the 1,530 property owners possessing over 50 per cent of the assessed land values donít object to the council initiative, the design phase will take place in the spring of 2002, with construction beginning in the spring of 2003. The major construction would be finished by the end of 2004.
"It will all be phased in, so you wonít get a full tax bill until 2004," district administrator Tom Day said.
All specified area property owners would begin to face taxation by March 2003 if the money is borrowed in the fall of 2002, according to Sooke director of finance Laurie Wells.
The capital cost recovery is only a portion of the costs that specified area property owners would face. The operating maintenance and user fee would run between $170 and $250 annually, and hooking up from a deactivated septic tank to a septic pipe is estimated at $3,300 for up to a 100 foot connecting pipe.
Occasional concerns regarding the cost burden to money-strapped seniors came from some of the 90 people who attended the June 26 meeting. Farmer addressed the concerns by saying home owners grants and seniors grants can be used for the capital cost recovery, but not the operating charge, which is a separate charge, like a water bill.
"With respect to the real concerns of seniors, in September we as a council and staff will have a full day for them to come forward and sit with staff and council and tell us about their own properties," he said.
Day said property owners have the option of paying the entire price up front. He said those who are thinking of developing their land in a few years may wish to consider exercising the buy-out option because their bills will rise if they decide to develop.
Several questions were asked and feelings were conveyed at the meeting.
Rojean Road resident Justin Baker told the committee he was upset because he already has an on-site sewage plant on his property.
Justin Baker, who lives in the proposed sewer specified area, was told by the sewer study steering committee that if the sewer system is built, he must hook up with the sewer despite the fact he already has an on-site sewage plant on his property
Farmer told him that residents will have two years to get hooked up to the sewer once it runs up their street.
Smirfitt also commented that in his experience working in Colwood, he has noticed that it has been five years since the sewer system was built, and some people still arenít being forced to hook up.
Baker said he was also concerned because a connection to the pipe would destroy concrete and a garden in his front yard.
Worried Residents Against Tax Hikes resident Gail Hall inquired why the total estimated operating costs are $482,500 when they were $900,000 on the B.C./Canada infrastructure grant.
"We checked with other municipalities, and the first few years of operating costs seem quite low," Stantec consultant Anne Poole said.
WRATH member John Arnett told the committee he believed the sewer proposal was nothing but a dream.
"I suggest that the sewer proposal is a pie in the sky," he said, adding that several other municipalities are vying for the $800 million of grants available over a three year infrastructure program.
"Youíve hired high price consultants, and have almost reached $100,000 right now. Iíd like to ask if you donít receive the grant, who foots the bill for the study and the cost of the consultants?" he said.
Farmer said that the reason the money was spent was because people need an opportunity to make an educated opinion to accept or disagree with the sewer system proposal.
Copies of the estimated personal property values are available at town hall along with questionnaires regarding the three options.
"Think it over and give us what option you believe the steering committee should recommend to council," Farmer said.
The next sewer study committee meeting will be July 24 at 9:30 a.m. at town hall, at which time the Stantec final report on phase two on capital costs and costs recovery will be received. Also one of the three options for capital cost recovery will be chosen to recommend to council.