Understanding the cost of the sewer plant is important. Especially if you’re responsible for paying the bill. The truth is that no one knows what the final cost will be. Questa Engineering has estimated the cost of the sewer system and sewer plant based on several ‘guestimates’ and some of the other basic facts that they know today. Please allow SGVSewerFacts to run through their projections and point out some of the issues you should be concerned about.
The overall cost of the project has been estimated at $14.3 million dollars. This includes the construction of sewer lines, the construction of the sewer plant and the cost of creating storage ponds on the San Geronimo Valley Golf Course for reclaimed water. It does not include annual operation costs. That’s separate. Using the $14.3 million figure, Questa Engineering estimates that the each property owner would be responsible for $39,788 to get the system built. There’s only one thing wrong with that estimate. It is based on 360 properties agreeing to pay for the construction costs of the sewer system. Remember, only certain houses in the Woodacre and San Geronimo flats are allowed to participate and it is not mandatory to participate. As properties whose systems are functioning properly opt out of the large cost to be a part of the system, the per property cost will go up. How far up will it go? No one knows. It depends on how many properties end up participating. Break out your calculator and you’ll see that if only 180 properties participate the per property cost goes up to $79,444. Maybe 250 properties will participate. That’s $57,200 per property. Do you know what it would cost to fix your septic system? Do you even know if it has a problem at all? Would you agree to pay $40,000, $57,000 or $79,000 before finding out what it would cost to fix your own septic system? Some systems can be fixed for just a few thousand dollars. Some might even be able to be fixed for a few hundred dollars.
What about cost overruns? Most large projects like these have them. Those are not accounted for in the Questa Engineering estimates. The $14.3 million price tag could easily go up. Furthermore, the cost estimates are based on today’s dollars. The sewer system won’t actually be built for several years (estimates for your first ‘flush’ of the new system would be in three to five years or 2020 – 2022). Will the cost of construction increase between now and then? It’s hard to say but history and experience tells us that as time goes by the cost of living increases.
There are additional costs that the Questa Engineering estimate omits. One is the cost to prepare a Sanitary Sewer Management Plan (SSMP). In 2014, a Marin County civil grand jury estimated the cost of an SSMP at $30,000 – $50,000. Another cost for homeowners that is not included in Questa Engineering’s estimate is the cost to decommission an existing septic system, reroute existing plumbing and connect to the new sewer lateral. How much will this cost? That depends on your unique situation but it could easily run between $3,000 and $5,000 (or more) per property.
There are also annual operating costs. Questa Engineering estimated a cost of $1,000 per property per year. Again, that’s based on 360 properties participating. If only 180 properties participate, the cost doubles. Assume that this number, like the cost of living, will increase over time. Questa Engineering also has not properly accounted for potential costs like that of unionized employee benefits, employee taxes or insurance. In fact, Questa Engineering lumps financial administration, legal fees and insurance together with a cost of just $18,000 a year. In 2014, the Marin County civil grand jury, charged with investigating the county’s sanitary districts, estimated the cost of insurance alone at between $25,000 and $250,000 a year.
The bottom line is that no one knows what the bottom line is. At least not yet. What is known is that the estimated per property cost to connect to the sewer system will be somewhere between $43,000 and $83,000 (including property owner costs). The small group of concerned citizens in Woodacre who want to build the sewer plant are telling property owners that state grants will cover a portion of the cost. Grants could be identified but there is no promise that grants will cover any of the cost of this project. Property owners are also being told that a new sanitary district will be formed and a bond will be sold so that property owners can pay off their costs (whatever those may be) over a period of 20 years. It is certainly a good way to defer the cost of the project over time. The only question is how much more will you be paying on your property tax bill to cover the cost of the bond? Again, no one can answer that question because no one knows. What you can see is that a $50,000 liability spread over 20 years is $2,500 a year and that does not account for interest payments required under a bond sale.