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Division of Water and Waste Management
1560 Kanawha Boulevard East
Charleston, WV 25311
Telephone (304) 558-0641
Fax Number (304) 558-3778
Bob
Wise Stephanie
R. Timmermeyer
Governor Cabinet
Secretary
TO: Mike
Johnson, P.E., Assistant Director, DWWM
FROM: Ed
Burdette, PE., DWWM
DATE: December
12, 2003
SUBJECT: Jefferson Co. PSD — Flowing Springs/Cattail
Run Preliminary Engineering Report and Facility Plan
IJDC
Preliminary Application 2003S-774
Technical
Review
RECOMMENDATION
The
Pre-application, Preliminary Engineering Report and Facilities Planning Report
for the Jefferson Co. PSD [Public Service District] — Flowing Springs/Cattail
Run Facility Plan has been reviewed. I recommend that the project not be
certified to the finding committee at this time.
The
project consists of the construction of approximately 200,300 linear feet of 6,
8, 10, 12, 21 and 24-inch gravity sewers and necessary manholes, 51,600 linear
feet of 1½, 4, 6 and 12-inch force mains, 6 duplex grinder pump stations, 5
main pump stations and one 1.0 million gallon/day sequencing batch reactor
[SBR] sewage treatment plant [STP] with tertiary filtration. The project is
designed to initially serve 2,180 equivalent dwelling units.
Customers
in the project area are currently served by on site septic tank/soil absorption
fields and 11 small package treatment plants. It is documented in the facility
plan that septic tank/soil absorption fields are not a viable method of sewage
treatment due to unsuitable soil conditions in Jefferson County. As a result of
the soil conditions both surface and groundwater are being polluted by
improperly treated sewage.
The
Jefferson Co. PSD provides adequate operation and maintenance of their sewage
collection and treatment system.
Several deficiencies were noted in the Preliminary Engineering Report and the Facilities Planning Report. These deficiencies in the project prohibit the plan being recommended to the funding committee at this time.
1. Why
were two separate documents submitted to the IJDC for review, a Facility Plan
and Preliminary Engineering Report [PER]? The Facilities Planning document is
not the same as the PER. Both contain information that is pertinent to the
project. These documents need to be combined into one document for clarity.
2. The
selected alternative is set up to divert the flow of approximately 1,254
customers from the Charles Town STP and providing treatment for them at the new
Jefferson Co. PSD STP on Cattail Run. To date no revised or amended agreement
has been provided revising the current agreement requirements for distributions
of flows and relieving Jefferson Co. PSD from sending all their flow to Charles
Town up to .4 mgd. The current agreement would not allow any flows to be
diverted away from Charles Town. This is a concern for Charles Town and has
been restated in a letter to the PSD as recently as November 7, 2003.
3. The
report provides no evaluation of use of existing facilities (i.e. Charles Town
WWTP [waste water treatment plant]). The report must evaluate expansion of this
STP in order to treat at least part of the expected flows and the capacity
available in the collection system to transport sewage to the STP. Mapping and
schematic diagrams are needed.
4. The
mapping provided in Section 2 shows the planning area overlapping the Ranson
expansion area and Section 3 seems to indicate that this expansion area would
be served eventually at the Cattail Run STP. Is there an agreement with Ranson
to this effect? Our current information seems to indicate differently.
5. The
section discussing the current situation does not include a discussion on the
existing package STP’s in the study area. These facilities need to be discussed
as far as their condition and the acceptability of their current effluent
discharges (violations). Also, provide some discussion on the condition of each
collection system ([inflow/infiltration] I/I, etc). Indicate the number of customers
on each system. Also, which of these package plants will be eliminated by the
project.
6. Table
2 lists Harpers Ferry PS 2 [pump station number 2] area customers to be
connected to the proposed system. Are these existing Harpers Ferry customers?
If so an agreement with Harpers Ferry to remove these customers from their
system is needed. Also, Willow Springs is listed as having 266 users; the
facility plan for this area does not indicate that this number of customers is
present.
7. Provide
water usage records for residential customers. Based on these records
recalculate the users/EDU’s [flow equivalent to flow from one dwelling unit]
shown and all rate calculations.
8. Include
the current population to be served by the project. Indicate the number of
metered/unmetered and residential/nonresidential customers.
9. Include
a list of the PSD’s operators and their certifications and a list of existing
Permits.
10. Provide
location mapping of all developers listed in section.,.
11. The
tables included in Section 3 do not seem to include the proposed users “Along
Route 27 near Drive Inn” shown on Table 2. Include these users in the
appropriate table.
12. Include
a column in the tables in Section 3 indicating which of these users will
initially be served at the proposed system.
13. The
tables in Section 3 list existing and planned EDU’s for the project include
residential, commercial and industrial users in this table.
14. Initial
flows at the Cattail Run STP do not support an initial plant design of 1.0 mgd.
Especially if the 1,254 users currently served at Charles Town are not
connected. A more appropriate design may be .3-.5 mgd.
15. Provide
the anticipated peak flow for the STP.
16. The
report states that the PSD would start with a 1.0 mgd STP and then expand the
plant in 1.0 mgd increments. The wasteload allocation was issued for a plant
sized at 1.68 mgd why is this? Additional wasteloads must be obtained for 1.0,
2.0 and 3.0 mgd plants.
17. Additional public participation is needed when the plan is finalized.
18. The
STP site and line routings chosen were not located in the previous planning
documents prepared for the PSD. Due to this fact all environmental clearances
must be obtained for the new plan. This includes the WV Division Of Culture and
History, Natural Heritage Program, U.S Army Corps of Engineers and the Fish and
Wildlife Service. Also, the USDA-NRCS [natural resources conservation service]
and the Jefferson Co. Commission needs to be contacted and/or re-contacted with
regards to areas of prime farmland and state wide important soil in the project
area.
19. A
SBR with tertiary filtration was the chosen STP for Alternative 6S wo/EB
[without Elk Branch]. During the selection of the treatment plant the need for
tertiary filtration was not discussed. Provide adiscussion on the reasons for
selecting advanced treatment.
20. Based
on the MHI [median household income] for the area the project would not be
eligible for a 1/2% loan for 40 yrs from the SRF fund. A 1/2% loan for 30 yrs
looks feasible. It should be noted that at this time no SRF [state revolving
fund] funds would be available for this project for at least two years.
21. Provide
a statement on the availability of lands for the STP, P.S.’s [pump stations]
and lines.
22. The
report does not appear to contain current data in some instances as noted by
the City Of Charles Towns letter of Nov. 7, 2003.
23. Include
the calculations used for the 4,000-gal/mo. rate calculation.
24. This office feels that one of the main obstructions for this project to proceed is the $62.24 rate for 4,500 gal/mo or $55.32 for 4,000 gal/mo. All options available need to evaluated to try to lower this rate. One possible option would be to obtain private developer financing for a larger portion of the project costs. Another option may be to participate in the expansion of the Charles Town STP.
Once
these comments are addressed and in particular the PER and FP combined into one
document additional comments may be forthcoming.
DATE: December 8, 2003
PROJECT SPONSOR: JEFFERSON COUNTY PUBLIC SERVICE
DISTRICT
PROJECT SUMMARY: Construction
of a wastewater treatment plant and collection system.
PROPOSED FUNDING:
Aid In Construction from Developers $ 1,600,000
Special Appropriations Pool 1,000,000
Infrastructure Council Grant 1,000,000
Loan (0.5%, 30 yrs.) 14,000,000
Loan (0.5%, 40 yrs.) 7,578,604
Other Sources 558,140
Total $25,736,744
PROPOSED RATES: Current rates are $48.55 per month for
4500 gallons; proposed rates would be an increase of 28.18% to $62.24 per
month.
Application Number: 2003 S-774
FINANCIAL: Donald P. Cook
1. The current tariff rate ($48.55 per month for residential customers) is higher than the average rates attributable to 1.0% of the Median Household Income (MIII) of $35.85 per 4500 gallons. The current tariff rates are lower than the average rates attributable to 1.5% of the MHI of $53.78 per 4500 gallons. The current tariff rate ($43.16 per month for residential customers) is higher than the average rates attributable to 1.0% of the MHI of $35.85 per 4000 gallons. The current rates are lower than the average rates attributable to 1.5% of the MHI of $53.78 per 4000 gallons.
2.
The
Annual Report of the Jefferson County PSD reflects the following outstanding
debt:
2003
Series A $1,445,000 2025 Current
2003 Series B $85,000
2025 Current
2000
Series A $1,097,139 2031 Current
l999SeriesA $337,371 2030 Current
1998
Series A $2,250,000 2028 Current
1998
Series B $479,265 2019 Current
1998
Series C $662,039 2038 Current
1993
Series A $509,756 2013 Current
1988
Series A $1,703,069 2028 Current
1988
Series B $283,846 2028 Current
WVHDF
Note $722,759 2008 Current
WDA
Note $145,000 2000 Current
3. The attached cash flow analysis reflects the
District’s position at fiscal year ended June 30, 2003.
4. The current rate is sufficient to support the current
operations, per the annual report. The proposed rate is not sufficient to
support the additional debt.
ENGINEERING: David
W. Dove, P.E.
1. This project will require a Certificate of
Convenience and Necessity from the Public Service Commission. Please reference
this preliminary .application number on the PSC’s Form No. 4.
2. Customer Density/ Cost Per Customer:
The estimated cost of the project is 525,736,744. The estimated miles of pipe is 47.5 miles. The estimated number of new EDU customers is 1081. Therefore,
1081 new EDU customers / 47.5 miles = 22.8 customers
/ mile very low
$25,736,744 / 1081 new EDU customers =
$23,808 / customer extremely high
However, 1081 is the estimated number of new EDU
customers. The District states that there are 2.54 people per occupied housing
unit which equals 2.54 users/EDU. This translates into 1081 EDU customers/(2.54
users/EDU) or 426 housing units or billable customers the District is
actually estimated to acquire. The customer density and cost per customer then
becomes:
426 housing units!47.5 miles of pipe = 9.0
customers/mile Unacceptable
$25,736,744! 426 housing units = $60,414 / customer Unacceptable
Both the Customer Density and the Cost Per Customer
is unacceptable under this analysis.
It should be noted that the 1254 existing District
customers were not used in these calculations in light of the fact that the
District is currently under a binding 1988 agreement with Charles Town for
sewage treatment for its existing customers. In Section J of the Flowing
Springs! Cattail Run Facility Plan prepared by the District and included in
this application, the agreement states in part that, “In the event that the
plant capacity is reached prior to the full payment of the bonds, the parties
hereby agree to enter into a new agreement for expansion of the plant to the
mutual benefit of all parties.”
The District also owes a substantial amount of debt
service for previous upgrades to the Charles Town plant and ongoing treatment
expenses as part of the sewer service agreement (pg. 14 of preliminary
application) with Charles Town. As an additional note, Charles Town has stated
in this application that they currently are developing plans to upgrade their
facilities. Therefore, sewage treatment for the exiting District customers is
apparently contractually obligated to the Charles Town plant for some time to
come.
Customer density and customer count will be definite
issues in a certificate of convenience and necessity application required by
the PSC. The certificate case would evaluate the actual number of customers
ready to take service immediately upon completion of construction. Given the
uncertainty of the District’s flows that would be diverted from Charles Town,
the actual customer count in the certificate case would likely be closely
evaluated.
3. Project
Feasibility:
While this project (SBR plant on Cattail Run)
appears to be technically feasible, the design has been based on an anticipated
accelerated growth rate. However, given the low customer density and high cost
per customer, the project does not appear feasible. The project is
designed based on an approximate 34% growth rate which has reportedly occurred
in the last few years. Historic trends for Jefferson County have documented a
growth rate of 1.67 percent increase per year based on the 1980, 1990, and 2000
censuses.
All lines have been sized based on projected growth
and proposed developments. There is no indication if the proposed developments
are built on speculation or under a contract basis only. In areas where housing
developments are proposed, the higher of either the proposed number of new
EDU’s from development or an applied 34% growth factor has been utilized. As
such, the lines may be oversized for some time to come, especially if the
growth rate does not sustain at least a 34% growth rate for 20 years. Staff is
unaware of any areas in West Virginia that has grown at that rate for 20 years.
The proposed initial 1.0 million gallon per day treatment plant is a SBR plant that has been sized for 2180 initial users at 178 (gal./EDU) which equals 388,040 gallons per day. An additional allowance for infiltration of 200 gallons per inch diameter per mile per day has been used which equates to 71,409 gallons per day. This equates to a total of 459,449 gallons per day for an initial flow going to a 1.0 mgd plant. Therefore, the initial SBR plant will have approximately 540,551 gallons per day of excess capacity.
The treatment plant will be designed and constructed
for expansion in 1.0 million gallon per day increments, which will allow the
District to expand the plant as required. Allowances for property acquisition
and pre-blasting for treatment basins to handle flows up to 3.0 million gallons
per day have been included within this initial phase. The central location of
the Cattail Run treatment plant may allow development of collection systems to
serve the mountain communities and Elk Branch in the future.
This design assumes 2180 initial users. However,
page one of the application states that only 1081 new EDU’s are estimated.
Staff would assume as such that the District is proposing to divert a
substantial amount of flow (more than 50% of the District’s current customers)
from the Charles Town plant to the District’s proposed SBR plant immediately
after construction.
Staff again points out that there is no written
documentation in this application that Charles Town has agreed to allow that
amount of flow to be diverted from its plant. In fact, in section G., Item 5 of
the included Facility Plan, a letter dated November 7, 2003, from the City
Manager of Charles Town (Jane Arnett) states, that since 1997, the City has
provided comments and raised concerns through both correspondence and meetings
regarding the District’s Facility Plans. The City once again believes that the
concerns brought forth by the Town, to both the District and Pentree, Inc.,
since 1997, have not been addressed in the current Facility Plan.
She further states that the fiscal impact of
removing more than 50% of the District’s current customers was not evaluated in
the Plan and that Charles Town will continue to raise concerns regarding
the redirection of flows of this magnitude in the context of the 1988 Sewer
Service Agreement and its EPA 201 study map. Staff would recommend that all
the concerns raised by Charles Town be addressed before this project proceeds.
It is readily apparent that the issue of diverting
the District’s flow from the Charles Town plant to the District’s proposed SBR
plant is critical to the feasibility of the District’s proposal at this time.
No analysis was presented as to how many of the District’s customers would be
required to stay at the Charles Town plant to cover the debt service to Charles
Town. As such, the District’s proposed plant and facilities appear to be
drastically over designed especially if the District’s flow to Charles Town is
not diverted to the District’s proposed new plant.
Staff would recommend that the utilities involved
renegotiate the agreement for sewer service, to the satisfaction of all the
parties and include the revised agreement in this application. The revised
agreement would require prior Public Service Commission approval. Unless
the District is able to divert its flows from Charles Town, Staff believes the
District’s proposed facilities are too large and not feasible due in large part
to an inadequate customer base and what will likely be inadequate flows.
The District, under the Sewer Service Agreement, has
an allowed 400,000 gallon per day capacity at the Charles Town plant. The Town
of Ranson has expressed an interest in increasing its allotted sewage flow
capacity to the Charles Town plant or possibly building its own treatment
plant. The Charles Town plant is at or near its capacity now and will likely
need to be upgraded in the very near future if it is to continue to treat
sewage from the District, Ranson and itself.
The District should explore negotiations with Ranson
and Charles Town to possibly sell the District’s capacity at the Charles Town
plant. The negotiations should include compensation to the District for any
investment in the Charles Town plant from previous upgrades the District has
helped to fund. This would appear to be advantageous to all the utilities
involved and could assist the District in the plans to build its own treatment
plant. If the utilities are unable to negotiate an agreement, the PSC may be
petitioned by the utilities, to revise the agreement in the best interest of
the public. Without cooperation from all the utilities involved, no
projects may be feasible for any of the utilities at this time.
4. Alternatives
to Project:
The District’s Facility Plan considers 21
alternatives for providing sewage service for specific areas of the Flowing
Springs, Cattail Run and Elk Branch drainage areas of Jefferson County. Most of
the alternatives consisted of some variation of a centralized wastewater
treatment plant located at different locations within the District’s
boundaries, with different collection piping arrangements to accommodate that
particular design. The problems with these types of systems are high costs
($20,000 - $30,000 per customer), expensive network of collection pipes and
failures that can result in large volumes of raw sewage discharged at one point
source. These type systems are usually designed for heavily populated areas
with high densities and limited space available.
At the present time in the District’s boundaries,
there is plenty of space available for alternative systems and only clusters of
areas with moderate densities. This is evidenced by the nearly 50 miles of
collection piping and the low customer density proposed by this application. Of
the alternatives considered by the District, a SBR plant may be the better
option. At this time, Staff would not agree with the chosen alternative of a
SBR sewage treatment plant located on Cattail Run. Without sufficient and
substantiated customer base, the proposed SBR plant would likely be cost
prohibitive and risky business for the District at this time. Especially, if
the accelerated population growth (from 1.67% to 34%) is not sustained for 20
years and given that the District already has one of the highest rates for
sewage treatment in the state. Even if the District was to realize half of its
34% projected customer growth for the first few years, the effects could be
devastating to the District and an average sewer bill could escalate
drastically in order to pay for an oversized sewage treatment plant and collection
system.
Additionally, Staff found no estimated effluent
quality was given for the different types of alternatives considered. Staff
would surmise that, before choosing a particular type of treatment plant, the
quality of the effluent to be expected from the plant once it is operational
should be known, especially since the discharges would be into the Shenandoah
River and the area is known for its parks and tourism.
Failed septic tanks are often used as a
justification for a centralized treatment facility. However, in numerous
letters from the Jefferson County Health Department in section J of the
Facility Plan, the Health Department states that it is undisputed that
Jefferson County has the least percentage of failing systems in West Virginia
(less than 2%) and that properly constructed and located septic systems are not
a factor in well contamination. This apparent contradiction with the
District’s position would be an issue in the certificate case.
Additionally, the District should have evaluated in their alternatives:
1. The Charles Town treatment plant being upgraded
to handle all flows from the District and Ranson, with no plant being
constructed by the District or Ranson.
2. An alternative for Charles Town and/or Ranson to
buy the District’s allotted capacity and the District constructing a treatment
plant and/or operating decentralized wastewater treatment systems until
substantial growth occurs.
These alternatives, as well as those issues raised
by Charles Town, should be addressed in order to select the best alternative.
5. Consolidation:
No consolidation will occur as a result of this
application. In fact, if this application is approved without mutual agreement
from all involved utilities, an unreasonable duplication of facilities could
occur, particularly if an accelerated growth of 34% for 20 years is not
achieved. The District and Charles Town could have treatment plants with an
insufficient number of customers and inadequate flows. In essence, the District
could be paying in part for two treatment plants, i.e., Charles Town’s and
their own.
6. Inconsistencies:
Page 2 of the application states that the total
amount requested is $25,736,744. Attachment to Attachment 3 of the application
lists the total estimated project cost at $25,731,744.
7. Operation
and Maintenance Costs:
Operation and maintenance cost estimates were
provided; however, no supporting calculations were provided. Two O&M
figures seem to be provided, one for $370,495 and another of $539,987. Based
upon the District’s current leak adjustment rate of $2.76 per thousand gallons,
Staff would estimate at least an additional $350,000 per year for O&M
expenses at initial start up of the plant. This figure would be over and above
the District’s current O&M expenses. It would appear that the District used
the lesser of the two figures to estimate rates. If the O&M costs are
underestimated, rates would be increased even further. Operation and
maintenance cost estimates would at best be a guess without a detailed
breakdown and supporting calculations. Accurate O&M cost estimates would be
crucial in this case especially since the District already has one of the
highest rates in the state for sewage treatment.
8. Engineering
Agreement:
The District is rated as a class A utility based on
annual revenue. As such, the District is no longer required to seek PSC
approval of the agreement. The District states however that the engineering
agreement has been previously approved by the PSC. Staff does note that the
total engineering fees for this project are approximately 20% of the
construction costs, which Staff considers high. High engineering fees could be
an issue in the certificate of convenience and necessity case or subsequent
rate cases that would require PSC approval. As such, the District should not
proceed with design until funding is acquired.
Jefferson County Public
Service District Statement of Cash Flow Year Ended June 30, 2003
|
|
Per Annual Report YE 6/30/2003 |
As Proposed Based on 4500 |
As Proposed Based on 4000 |
|
Available Cash:
Operating Revenues Other
Income
Total |
1,196,172 29,379 1,225,551 |
2,003,484 44,339 2,047,823 |
2,003,484 44,339 2,047,823 |
|
Cash Requirements: Operation
and Maintenance Expenses Other
Taxes
Total Cash Required Before Debt Service Cash Available for Debt Service |
831,775 18,811 850,586 374,965 |
1,202,270 18,811 1.221.081 826,742 |
1,202,270 18,811 1.221.081 826,742 |
|
Debt Service Requirements: Existing
Debt:
Principal & Interest
Reserves Proposed
Debt:
Principal
Interest
Total Requirements
Revenue (Deficiency) Excess |
353,255 353,255 21,710 |
353,255 656,132 55,589 1,064,975 (238,233) |
353,255 656,132 55.589 1,064,975 (238,233) |
|
% Debt
Service Coverage |
106.15% |
77.63% |
77.63% |