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HomeMy WebLinkAboutMinutes - 03/04/1985 - City Council (2)PUBLIC HEARING MONDAY, MARCH 4, 1985 6:38 P.M. Mayor Stanek called to order a Public Hearing before the City Council on Monday, March 4, 1985 for the purpose of receiving oral and written comments from any and all interested persons and organizations regarding the economic, social and environmental effects of the proposed wastewater collection system to serve the former Village of McHenry Shores area and the first phase of a south regional wastewater treatment plant for the City of McHenry as presented in the Step One Facilities Plan. The proposed improvements consist of approximately 28,380 lineal feet of 8" through 18" sanitary sewers plus manholes, lift stations, force mains and service stubs having an estimated project cost of $1,826,000; and an oxidation ditch type of wastewater treatment plant capable of serving a population of up to 5,000, having an estimated pro- ject cost of $2,347,000. At roll call the following ,Aldermen were present: Bolger, Busse, Datz, McClatchey, Nolan, Snell, Serritella. Smith arrived at 7:20 p.m. City staff in attendance were Supt. Halvensleben, City Attorney Narusis, City Clerk Gilpin. Members of the audience were Dr. Hal Sundin of Baxter & Woodman, Martin Koleno Sr., Donna Tobeck, Dorothy Bangle, Howard Lexow, Edwin Olbinski, Rose Lillegard, Gene Hester, Virginia & Daniel Gockman, Tony Oliver, Judy Szilak, Richard Panerelli, Represen- tative: Richard Klemm. Dr. Hal Sundin of Baxter & Woodman presented an historic review of the Step I Facilities Project. He stated "I think the best thing is to run down what has happened over the past few years so that we can see how we have arrived at the present situation from where we started out. It was almost exactly three years ago that there was a Public Hearing on the initial facility plan. That plan was started in the fall of 1981 Completed in the spring of 1982. The Public Hearing was held on March 6, 1982. This was just about the time than of the annexation. It was also the time at which the Illinois EPA re -scored the priorities of some of the communities in the area, particularily Mc Cullom Lake and McHenry Shores. What that did, that was a step backwards, because up until that time McHenry Shores had a priority number of 839 and Mc Cullom Lake had a priority number of 667. Both communities were re -scored and their prior- ity numbers went up over 1,100 so that put the project sort of on the back burner as far as getting any Federal Grant Funds for the project was concerned. However, there was an escape hatch hopefully and that was what was called innovative and alternative technology. These are sort of different types of treatment systems than the conventional, different types of sewer systems than the conventional that special funding was set aside for under the grant program. There was 4 percent of the grant fund that had to be allocated to innovative and alternative technology. The City Officials were interested in pursuing this avenue because it was a project that was innovative and alternative. I will use the term I/A instead of saying innovative and alternative. Any I/A pro- jects that qualify not for just 75 percent funding qualifies for 85 percent funding. This 75-85 doesn't sound like a great deal but when you look at the other side of the coin and at the local chair goes down the 25 percent to 15 percent, that is very attractive set of figures. The other thing that was intriguing about it was that I/A projects could be funded out of priority. That: meant that you would not have to wait until all of the preceding 1,100 some projects had gotten their funding before money could be made available for this project. We contacted the Illinois EPA and they were obligated, as I said, under the grant regulations to set aside 4 percent of the funds for I/A 'technology and at that particular time they were having difficulty finding places to put the money. If they didn't use it, it would go back into the pool and be re -allocated to other states and Illinois certainly didn't want that to happen to them. So the City and we were encouraged to proceed with the evaluation of an innovative and alternative tech- nology project. Council Mtgs, Special, Pub. Hrg. Facility Planning Area & Coun. Mtg. Attendance Monday, March 4, 1985 page 2 A modification or amendment to the facility plant was authorized by the City Council in October of 1982 and that report was completed in March of 1983, submitted to the Illinois EPA and they debated over it for some length of time. The innovative aspects of it were a little too innovative for them. They didn't have two or three of these sitting around the State that they felt that they were real comfortable with. We had researched it in other states where it applied and we felt that it was an excellent program because it could be retrofitted to a conven- tional system very easily if it didn't fully live up to its expectations, but they were dragging their feet on it. We finally, after pressing for some period of time, got a negative response from the Illinois EPA. At that point we, the City, contacted Senator Schaefer and asked him if he could intercede on our behalf to try to convince the EPA to at least set up a meeting with the EPA Officials and we asked for all the top people in the operation down there to see if we could convince them of the potential of this program for I/A Funding. There was a meeting in Springfield in September of 1983 at which Bill Bolger and the Mayor attended along with myself. Schaefer was represented at that Meeting and all the top brass of the Illinois EPA. They were very sympathetic and understanding. We came away with the initial glow of some feeling of optimism until the various "catch 22's" began to show up. One of those was that the grant program was being changed and the grant funds would no longer be available for a future population, that is for constructing a facility that would serve more that just the number of noses and heads that you can count today so if the population of the area was 1,100 people thats all that they would give you money for was to build a plant for 1,100 people. Anything above that you wanted to build for would have to be funded locally. It would not be eligible for grant participation. In addition, the grant funding level was dropped as of October 1984 and obviously in September of 1983 it was obvious that we were not going to be into construction by October of 1984 so we had to face that reality. At that time the grant funding level dropped from 75 percent to 55 percent. When you put those two effects together it had a marked impact on the financial feasibility of the project. I/A technology would still qualify under the new program for 75 percent funding, not the 85 percent from before but not the 55 percent after, with an intermediate point of 75 percent. So we were still interested in the I/A aspect of the pro- ject. The people at the Illinois EPA after we had our meeting with the top brass we, as I say, we got down to the "catch 22's" and met with some of their technical staff and these people wanted us to examine some other alternatives. They didn't want to go out on a limb on the alterna- tive that we had developed. They wanted us to look at some other technologies that they'd applied someplace else where they had plenty of them around the State. Those approaches were not viable. They were more suitable for larger facilities and the economics of them and applying them on a scale that we were talking about here 5,000 population design basis, it just did not stack up. They were more expensive than the basic approach that we originally tried, they were more expensive than the I/A techniques that we had suggested for treatment. They also turned thumbs down on the I/A Sewer System. We were talking about an I/A Sewer System that would be small diameter sewers which would receive pump effluent from septic tanks. The septic tank would stay in place, you would take the clear liquid that came out of the septic tank, and pump that into a series of small diameter sewers which could be constructed at fairly shallow depths thereby saving on the costs of the sewer system. However, you have to set up a mechanism for the maintenance and operation of the septic tanks because that would have to be institutionalized, it could not be left up to the individuals discretion. There has to be a management plan for that. By the time you factor all that into it there wasn't a tre- mendous amount of savings but if it would have been approved as a I/A technology it would have qualified for the 75 percent funding. However, they in-house had an unwritten policy that they lowered on us as we got into the thing that said that that type of system was only acceptable in their eyes for rural communities with no real potential for future growth or expansion and this area did not meet that criteria. Monday., March 4, 1985 page 3 We got a turn down finally then on August, 1984. They would not approve either Then they wanted the facility plan completed cost effective solutions so we are back to sewer system and a conventional type of waste the one that is described in the notice. the entire project as of of the I/A technologies. on the basis of the most the original conventional treatment plant. That is We ran out the cost based upon the rules and regulations that I eluded to, the fact that none of the cost of building either of the sewers or the treatment plant to serve more than the immediate present population would be eligible and that those facilities which were eligible would only be grant funded to the tune of 55 percent instead of 75 percent. For what that did, and I think we all have had an oppor- tunity to go over the big numbers and so forth, I don't want to go down through the derivation of all of this, but what it amounted to was that in order to fund this program at the local level there were going to have to be some significant cost incurred. These were predicated on the City of McHenry assuming the responsibility for those costs to build facili- ties larger than the immediate needs of the area. In other words if we were building a sewage treatment plant for 5,000 people and there were only 1,100 people in the area, the additional capacity for the additional 3,900 population would be paid for by the City. Now that was an assumption. There was no commitment on the part of the City to do so, but the City would be in a position to re -coup that money out of future connection fees so there was some logic to that approach. However, it is not a prorated difference. If you build a plant for 1,100, you have certain basic facili- ties like the pumping station and the operating building and the driveways and that sort of thing that are necessary regardless of whether it's 1000 people, 5,000 people or 10,000 people. When you go out and build a tank for 5,000 versus 1,100, it means the tank has to be a little bit bigger but you can build a tank bigger for a lot less than the pro- rata cost of comparing the populations. So what it amounted to was that there was still a significant amount. of money that the local share was going to have to be. And for the treatment plant a revenue bond issue to cover the cost of the treatment plant was going to cost $16 a month when it was related to a user charge spread over the 330 some users that are in the service area. The opera- tion and maintenance costs for that plant would run somewhere around $21 a month. These operation maintenance costs are costs which are mandated by the regulations you have to factor into the replacement of all of the equipment over the useful life of that equipment so that the plant becomes a self sustaining entity economically. On the sewer system, the sewer system would be financed by general obligation bonds and again if the over sizing in the sewer system which was not a very large cost, it was less than $100,000, we can assume that the City would pick up the cost of oversizing because they could re -coup those costs from future connections. The residual cost that would have -to be funded locally could be resolved through a general obligation bond issue on the area of service, and the tax rate that would have to be picked up to pay off those bonds would reduce back to about $25 per month. Over and above that there was another operative maintenance cost for the sewer system which was about $4.65 a month. What also had to be factored in was the cost that people would incur in abandoning their septic tank and connecting to the sewer system. That amortized out over a 20 year 'life worked out to about another $11.80 per month. That was a cost of somewhere around $800 per home to make that connection. But under the grant regulations that has to be taken into account as one of the costs and spread over the design period. When we got through adding all these things up it amounted to near $80 a month, which is obviously just out of the question. The financial feasibility is not there. There was a possibility that a State grant to pick up the slack between the 55 and 75 percent of the grant level was being considered and so we included in the analysis, the impact that that would have if such eventuality materialized. That would drop the c• arrge from about $80 a month down to about $65 a month, not enough to make the project attractive. Monday, March 4, 1985 page 4 So that is the situation in which find ourselves at this parti- cular junction. The cost of getting the sewer system and the: sewage treatment plant off the ground with the number of users that would be connected to that system at the present time is just to much for that group of users to support. It's going to require some other sources of funds. Other areas ready to develop, possibly apartment areas, possibly additional housing developments, possibly industrial development, in which there is sufficient interest in getting wastewater treatment into that area to have more people participate in the program thereby spread- ing the cost more thinly over each of them to the point where it would be financially feasible. There are some other grant programs which potentially might fit in the picture. There are DCCA grants which are being talked about or are actually being applied, and there is the Governor's "Build Illinois Program" and we don't know exactly how that is going to work out but as I understand it is going to be allocated to those projects with priorities below 800 which have an approved facility plan and which are ready to go into construction. That pretty well knocks us out of the box because our priority number is not under 800 and the project is not ready to go into construction. So I don't see that source of funds coming to our rescue. What there is in the future or what there is around the corner there is no way of telling. The best thing would be if someone got excited about developing the industrial property north of Bull Valley Road and west of Route 31. There is a sewer through it at the present time so the door has been opened. It is a relatively straight forward matter and if that area would start to develop this would be the: impetus that would put it over the top, but without some assistance of that nature the costs are just to high to be realistic." Following Dr. Sundin's presentation, Mayor Stanek as►c if there were any written or oral comments from those in attendance regarding this Public Hearing. There was no reply from the audience. He asked the City Clerk if any written comments had been submitted to her office. She replied that none had been received. Persons making oral comments during the hearing were Mayor Stanek, Aldermen Bolger, Nolan, Busse, Datz, McClatchey, Smith, Snell, Serritella, Representative Klemm. Members of the original McHenry Shores Public Advisory Committee who made comments at the hearing were Donna Tobeck, Rose Lillegard, Richard Panarelli, Dorothy Bangle and Howard Lexow. A complete tape of the Public Hearing is included with the file on the McHenry Shores Facilities Planning Study. Motion by Snell, seconded by Nolan, to conclude this Public Hearing on the Phase I Study Proposal. Voting Aye: Bolger, Busse, Datz, McClatchey, Nolan, Smith, Snell, Serritella. Voting Nay: None. Absent: None. Motion carried. Public Hearing adjourned at 8:17 P.M. RK O.