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HomeMy WebLinkAboutPetition for Remission of Administrative and Legal Costs to the Orange County BOCC and OWASA July 27, 1995 Petition for Remission of Administrative and Legal Costs To the Orange County Board of Commissioners and the Board of Directors of OWASA from Piney Mountain Homeowners Association Piney Mountain subdivision off of Mount Sinai Road in the Rural Buffer of Orange County It has been two and one-half years since we, as Piney Mountain property owners, first learned that there were serious problems in renewing the operating permit for the low pressure pipe system("LPP System") in our community operated by North State Utility Corporation("North State"). Since then we have undertaken extensive efforts to resolve our wastewater system crisis. We have engaged engineers and soil scientists. We have coordinated complex negotiations and agreements with Chapel Hill, Durham, Carrboro, Orange County and OWASA to investigate the nature of the problems with the LPP System and to arrange for an alternate way of disposing of wastewater from our subdivision. We made appearances before the N.C. Utilities Commission and in fact filed the petition that led to the appointment of emergency operators for all North State LPP Systems throughout the State. We were the first group to go through the maze of cost-consuming requirements to seek and receive a grant from the Environmental Management Commission("EMC"). We filed a two lawsuits: one against the State of N.C., and a second against the subdivision's developer, engineer and North State. We are proud of our leadership role in helping our state and other communities to address the crisis in North State LPP systems. We are proud of our success as a community in solving our own wastewater crisis by marshaling human and financial resources, and in remaining united despite many disunifying factors. We are proud of the first-class wastewater system which we are contributing to OWASA, the value of which exceeds $500,000,including both new construction and repair of the existing collector system. We are proud that our specifications for the new system went far beyond statutory and regulatory requirements in including an odor control system which resulted in a total of$45,600 in extra construction costs (for the odor control system, road widening and an additional well). We are proud to contribute to the beauty of the Rural Buffer by obtaining a transfer from North State of the land previously used for nitrification fields and dedicating this land to open space, greatly exceeding the open space requirements of the Rural Buffer. We are proud of the good working relationships we have established with the staff of both Orange County and OWASA, and we thank them for their cooperation and good will in helping us through this process. Piney Mountain Petition -2- July 27, 1995 e Now that we are at the end of this process, as we compare our situation with that of other neighborhoods whose North State LPP Systems also failed, we observe some striking contrasts. In Wake County, for example, the county government has assigned a project manager to work with county attorneys to establish six sewer districts for obtaining grant money from the Environmental Management Commission("EMC"). Wake County is absorbing, and the Wake County customers are not being billed for, all administrative and legal time required by the county project manager and attorneys for the grant application process,the selection of design engineers,the preparation of bid documents, the selection of contractors, and the supervision of the construction. In addition, Wake County has succeeded in making available to residents in all 6 sewer districts a low interest revolving loan program which provides loans to former North State customers at the rate of 3.04%per year over amortization periods as long as 20 years,to pay for the construction assessment not covered by the grant from the EMC. In contrast with the experience of the Wake County North State Customers, the attached Expense Statement for Piney Mountain shows that Piney Mountain has spent $176,000 to hire attorneys, soil scientists and engineers to do what Wake County has done at no charge for its North State customers. It shows that Piney Mountain has incurred substantial attorneys fees to obtain grant money and settlement funds from responsible parties, and yet each lot still shows a financial loss of$4,030. Moreover, it does not show the staggering investment of time and energy and personal funds expended by so many Piney Mountain residents in two and one-half years of daily meetings, telephone conversations, late night paperwork, travel time, and physical inspections and labor. Also in contrast with the Wake County approach , is the agreement dated October 12, 1994("the Agreement")among Piney Mountain, Orange County and OWASA. Unlike Wake County, which is underwriting all administrative and legal costs of creating the sewer districts, applying for state grants, and overseeing the design and construction process for the new municipal systems, Orange County and OWASA are requiring Piney Mountain to pay "(1) all costs and expenses, including the value of administrative and professional time expended by each, in the application for, administration of and the closeout of the State Grant; and(2), all costs and expenses not covered by(1)expended by each in the design,bidding and contract award, construction, regulatory approval and permitting of the Subdivision wastewater system." Finally, we note that since 1994 the policy of OWASA has been not to charge any administrative or legal costs associated with assessment projects, and to cap assessments at $50 per linear foot. Even prior to 1994, OWASA did not charge for administrative or legal costs unless they exceeded 15%of construction costs. Can Piney Mountain be distinguished from other OWASA assessment projects? It cannot. We look forward to being OWASA customers,just as does any other homeowner whose septic tank has failed. Y ` Piney Mountain Petition -3 - July 27, 1995 The Piney Mountain Appeal It is in light of these contrasts, and our extraordinary cost in human labor, money, and emotional fortitude that we appeal to you to offer a small acknowledgment of our efforts by remitting the administrative and legal fees incurred by OWASA and Orange County in the preparation of legal documents associated with the Piney Mountain project, and in contributing engineering and other staff time to oversee the project. The total amount to be remitted does not exceed $25,000 for each of OWASA and Orange County. This is a small sum when compared to the annual budgets of Orange County and OWASA. It is a small sum when compared to the value of the system which will be conveyed to OWASA(in excess of$500,000 which includes $350,000 in new construction and$150,000 as a conservative estimate of the collector system which has been extensively repaired). It is not a small sum to the Piney Mountain residents, whose loss per lot will be cut from $4,030 to $3,127 if the administrative and legal costs are remitted. We thank you for the opportunity to present this appeal to you and answer your questions at the OWASA Board meeting of July 27, and the Orange County Board of Commissioners meeting of August 3. By August 15, we hope to have approval of completion of our project from OWASA and recommendation from the Orange County staff of final disbursements of all amounts remaining in our account with Orange County to Piney Mountain assessed members. Thank you for your consideration of our petition and for your service to our community. We pledge our continued support for your work and the preservation of our environment and neighborhoods. r Piney Mountain Petition -4- July 27, 1995 Piney Mountain Expense Report PREPARATORY COSTS Project investigation and analysis (soil testing,attorney's fees, engineering) ($146,000) Grant application costs (30,000) Subtotal preparatory costs ($176,000) PROJECT COSTS Paid To be Billed Force Main ($216,522) Hook Up Fee (25, 901) Engineering (35,220) Piedmont EMC (3,852) North State Land Survey (712) Step/Collector Engineering (25,253) ($6,000) Collector Replacement (28,711) (3,289) Collector Testing/Repair (30,089) (3,000) Well (11,000) STEPS(estimated) (36,000) Subtotal Project Costs (425,549) ADMINISTRATIVE/LEGAL GOV. COST OWASA (22,312) Orange County (24,633) Subtotal Administrative/Legal Gov. (46,945) GRAND TOTAL EXPENSES (648,494) LESS SETTLEMENT AND GRANT FUNDS Developer assessment and settlement 222,552 Engineer settlement 75,000 State of N.C. settlement 120,000 Grant 88,500 Less litigation costs (67,079) Subtotal Settlement and Grant Funds 438,943 NET LOSS (209,551) NET LOSS PER LOT(Average) (4,030) NET LOSS PER LOT WITH GOV ADMIN/LEGAL FEES REMITTED (3,127) Note: Not included: Cost of abandonment of Phase 2 nitrification field(est. $2500-$10,000)