ENGINEERING REPORT

SOUTH WALDPORT SEWER IMPROVEMENTS
CITY OF WALDPORT
LINCOLN COUNTY, OREGON

PROJECT NO.  8505.11
JULY, 2002
(REVISED JANUARY, 2003)

TABLE OF CONTENTS

1.                  Introduction  
2.                  Purpose and Need of Project  
                Deficiencies of Ocean Hills Pump Station and Force Main System
                Hydraulic Capacity of the Sewer Conveyance System
3.                  Project Alternatives  
                Summary  
4.                  Proposed South Waldport Project  
                Ocean Hills Pump Station & Force Main
                Crestline Drive 15-Inch Sewer Main
                Crestline Bypass Sewer Improvements
5.                  Environmental Issues
6.                  Easements
7.                  Project Cost Summary
8.                  Financing
                Revenue Bonds
                Local Improvement District (Improvement Bonds)
                Financing Plan A
                Financing Plan B
                Financing Plan C
                Summary of Financing Plans
9.                  References 

LIST OF TABLES

Table 1 - Grade School Pump Station Capacity and Projected Design Flows
Table 2 - Summary of Proposed Mitigation Measures and Implementation
Table 3 - Project Cost Summary
Table 4 -Sewer User Costs with Financing Plan A
Table 5 -Proposed Local Financing for Financing Plan B
Table 6 -Sewer Costs for Revenue Bonds for Financing Plan B
Table 7 -LID Assessment Distribution – Financing Plan B
Table 8- LID Assessment Distribution-Financing Plan C

APPENDIX

Table A-1-Preliminary Cost Estimates
Figure A – Proposed Improvements *Note:  Not available in on-line version
Figure B – Crestline Bypass to WWPT *Note:  Not available in on-line version
Figure C – LID Map *Note:  Not available in on-line version

SOUTH WALDPORT SEWER LID – LEGAL DESCRIPTION W/ MAP *Note:  Map not available in on-line version

ENGINEERING REPORT
SOUTH WALDPORT SEWER IMPROVEMENTS

1.            Introduction 

The purpose of this Engineering Report is to define the proposed South Waldport Sewer Improvements including purpose and need of project, scope, cost estimates, environmental issues related to the project and proposed financing of the improvements.  

This Engineering Report is also intended to provide the documentation requirements contained in the City’s Municipal Code, Chapter 3.08.020 that is needed for the formation of a local improvement district (LID).  A summary of these documentation requirements is given below.

*    A full description of the project.
*    A description of each parcel of land specially benefited.
*    The record owner of each parcel.
*    The name and last address of the person currently assessed for each parcel as shown by the records of the Lincoln County assessor.
*    An estimate of the probable cost of the project, including legal, administrative and engineering costs attributable to such project.
*    A recommendation of a fair apportionment of the whole or any portion of the costs of the project to the property specifically benefited.
*    A recommendation of a method of assessment, together with an estimate of the cost per unit to the property specifically benefited.  
*    All easements necessary and estimates of the cost of obtaining the same (Ord. 370 § 2,1977)

2.            Purpose and Need of Project  

The proposed South Waldport Sewer Improvements are intended to correct existing deficiencies with the Ocean Hills Pump Station and associated force main, eliminate hydraulic overload of the Red River sewer main, reduce the hydraulic load to the City’s Grade School Pump Station, and eliminate the operation of the Township 13 Pump Station.    The net effect of the proposed improvements is to eliminate several of the existing deficiencies currently identified within the City’s existing wastewater collection system, removes a conveyance limitation at the Grade School Pump Station, and provides opportunity for conveying additional sewage to the City’s wastewater treatment plant.  

In addition to the above improvements, installation of a reclaimed water pipe for future conveyance of the treated effluent from the City’s wastewater treatment plant to the Crestview Hills Golf Course may be installed with the proposed sewer improvements. The purpose of the reclaimed water pipe installation is for future conveyance of treated effluent to the Crestview Hills Golf Course for turf irrigation.  The purpose of installing this pipe, as part of the South Waldport Sewer Improvements, is to take advantage of simultaneous installation of utilities within easement areas and existing right-of-ways.  Since the City or its customers will not finance the reclaimed water use pipe, the installation and financing of this improvement will not be discussed further in this report.  

A summary of the existing deficiencies within the City’s sewers, as related to the proposed improvements, is discussed below.  Alternatives to the proposed improvements are discussed below under Project Alternatives.   Additional information on the proposed project may be found in the following documents authored by The Dyer Partnership: City of Waldport Wastewater Collection System Master Plan (2000), Addendum No. 1 to the City of Waldport Wastewater Collection System Master Plan (2002), the Environmental Report, South Waldport Sewer Improvements (2001), and the Preliminary Engineering Report – Crestline Drive Bypass to Wastewater Treatment Facility (1998).

Deficiencies of Ocean Hills Pump Station and Force Main System

The Ocean Hills Pump Station and force main were constructed in the early 1990s without DEQ approval or review and did not comply with the department’s guidelines.  Since construction of the system, DEQ staff has reviewed the design and outlined various tests and modifications necessary for system acceptance (Mann 1995).  DEQ’s most critical concerns included the following.

The pump station did not meet Reliability Level 1 Criteria and DEQ’s wet well design guidelines, and lacked sulfide control measures, telemetry, wash water service, and standby power capability.  

The downstream gravity sewer system (i.e. Red River basin) cannot accommodate peak sewage flows from the pump station without surcharging manholes.  

Based on their review, DEQ recommended installation of a new pump station and wet well, and a  new 4-inch diameter pipe into the existing 6-inch diameter force main that is anchored in place with grout slurry.  To date, only the telemetry and water connection improvements have been installed in the pump station.  

From Ocean Hills Subdivision to Range Drive, the existing water mains and sewer force main are in such close proximity it is doubtful that the Health Division’s separation requirements (Oregon Administrative Rule, OAR 333-061-0050 (10)) for these two utilities are satisfied.  During previous subsurface explorations of the water and sewer mains near Seabrook Lane (The Dyer Partnership 1996), the sewer line was observed to be above the water main, which is not in compliance with the separation requirements.  PacWest (1998a) also noted that there was insufficient horizontal separation between the existing sewer force main and water main. 

The proposed project is needed to correct the above deficiencies within the existing pump station, force main, and hydraulic overload created by its discharge into the Red River sewer collection system.

Hydraulic Capacity of The Sewer Conveyance System

One objective of the South Waldport Sewer Improvements is to maintain and upgrade the hydraulic capacity of the City’s sewer conveyance system.  One limitation of the existing conveyance system is the capacity of the Grade School Pump Station., which is located next to City Hall.  This station currently receives all sewage generated within the collection system and conveys the incoming flow to the City’s wastewater treatment plant via 3,200 feet of 10-inch force main.  Discharge capacity of this station with all three pumps in operation is approximately 2.05 MGD.  Based on projected growth within the City, the station hydraulic capacity will be insufficient to handle the projected peak flows. The lack of available capacity within the Grade School Pump Station restricts the potential expansion of sewer service within the City limits, including developed areas in the north and east sections of town.

The proposed South Waldport Sewer Improvements would reduce the amount of sewage entering the Grade School Pump Station by creating a regional system to convey sewage generated from the South Waldport area directly to the wastewater treatment plant.  Specifically, the Ocean Hills Pump Station and Crestline Bypass improvements would convey sewage directly to the City’s wastewater treatment plant.  These improvements would also lay the groundwork for conveying sewage flow from other areas in South Waldport directly to the treatment plant, which would further reduce the hydraulic loading to the Grade School Pump Station.  The potential areas that may be served by the proposed improvements includes the basins currently served by the Forest Service and the Waziyata Pump Stations, and future service to UGB No. 3.

A comparison of the Grade School Pump Station discharge capacity with the projected design flows with the proposed South Waldport Sewer Improvements is provided in Table 1.

TABLE 1

GRADE SCHOOL PUMP STATION CAPACITY AND PROJECTED DESIGN FLOWS⁽¹⁾

              ⁽¹⁾ – Design flows refer to peak instantaneous flow (PIF).

Conveyance of the sewage originating from South Waldport to the wastewater treatment plant would provide conveyance capacity for future sewer service within the City and some of the proposed new UGB areas in the Year 2020 without increasing the capacity to the Grade School Pump Station and associated force main.  For ultimate build-out, the Grade School Pump Station and its force main will need to be modified with or without the proposed improvements. 

3.            Project Alternatives

A number of engineering studies have addressed potential solutions for Ocean Hills Pump Station and force main, and the proposed Crestline Bypass.  These studies include those by The Dyer Partnership Engineers and Planners, Inc. (1998, 2000), Hasan (1996), PacWest Engineering (1998a,b), and Westech Engineering (1997).  The following is a discussion of the findings from these studies.

Hasan (1996) proposed, in accordance with DEQ preferences, to 1) remove the existing Ocean Hills Pump Station, 2) install a new pump station that will meet DEQ standards, 3) install a new 4-inch diameter force main.  PacWest Engineering (May 1998) made a similar proposal except that a new 4-inch diameter main would be installed instead of sliplining the existing 6-inch diameter sewer main.  In addition, the proper horizontal and vertical separation required between sewer and water mains would be established as prescribed by the Oregon Health Division.  Total estimated cost for the proposed improvements outlined by PacWest Engineering was $422,240 (1998a).  While these proposed improvements provided a solution to correct the deficiencies of this pump station system, they do not allow for further development within the Ocean Hills Subdivision or South Waldport.

Westech (1997) compiled in a sewer local improvement district report on South Waldport for the City that was partially funded by the Lincoln County School District.  Two basic alternatives were explored: 1) single regional pump station and associated sewer improvements, and 2) multiple pump stations and associated trunk sewers.  The first alternative consisted of constructing a regional pump station near the Ocean Hills Subdivision and trunk lines to serve properties to the east, and upgrading the existing gravity sewer line along Crestline Drive.  With this alternative, it was proposed to use the existing 6-inch diameter force main from the Ocean Hills Pump Station to Range Drive and construct a new main along Range Drive to Crestline Drive.  For ultimate design flows, installation of a 8-inch diameter main along the 6-inch force main was recommended.  For the Crestline Drive improvements, two further alternatives were examined for conveyance to the wastewater treatment plant via a 1) force main or 2) gravity sewer.  Of these two alternatives for a Crestline Bypass, the gravity sewer was considered the more viable option.

The second alternative examined by Westech (1997) was construction of smaller pump stations to serve each property as it developed.  With this alternative, each pump station would be constructed by the developer and benefit only the intended property.  Once completed and in operation, the station would be turned over to the City.  Five public pump stations and one private pump station were anticipated.  Based on a review of the two above alternatives, Westech recommended the City construct a single regional pump station with associated improvements (1997).  However, after discussions between the City and the School District, it was agreed that sewage from the new elementary school located on Crestline Drive would be conveyed by a private pump station and 4-inch diameter force main.  The alignment of this force main would be along Crestline Drive north to a manhole located at the intersection of Crestline Drive and Salmon Street.  This 4-inch diameter force main was constructed and is now in operation.

PacWest Engineering (1998b) prepared a report on sewer improvements within the Patterson Creek drainage basin.  As part of this report, three alternatives were considered: 1) no improvements, 2) new Ocean Hills Pump Station and force main alignment northeast to Crestline Drive, 3) new Ocean Hills Pump Station and force main alignment to the north along Highway 101 to a manhole located near the Forest Service Ranger Station.  The no improvement alternative consisted of leaving the existing system in place and wait for a future developer to correct the pump station and force main deficiencies.  This alternative was dismissed because it prevents future development within the Ocean Hills development and potentially property to the east, and does not correct the current deficiencies.  A comparison of preliminary cost estimates compiled for the remaining two alternatives demonstrated that the proposed Crestline route was more cost effective than the Highway 101 route ($912,600 vs. $921,510).  The engineer’s recommended design for providing service to the Patterson Creek drainage, including the Ocean Hills development, was a new Ocean Hills Pump Station and force main to Crestline Drive (PacWest 1998b).

The Dyer Partnership Engineers and Planners, Inc. prepared two reports (1998, 2000) relating to the South Waldport Sewer Improvements.  In 1998, The Dyer Partnership proposed specific tasks and recommendations required to direct sewage flow from the Crestline Drive collection basin directly to the City’s wastewater treatment plant (i.e. Crestline Bypass).  Alternatives for introduction of sewage from Crestline Drive to the treatment plant’s headworks were examined.  Specifically, three alternatives were explored: 1) modify the existing treatment plant lift station, 2) install new submersible pumps at the lift station, and 3) construct a standpipe and in-line grinder near the headworks.  Based on preliminary cost estimates, Alternative No. 2 (install new submersible pumps) was considered the most cost-effective option for introduction of sewage from Crestline Drive to the treatment plant.

As part of the City’s Wastewater Collection System Master Plan (The Dyer Partnership 2000), several system improvement alternatives for sewer service expansion in the South Waldport area were examined.  One alternative examined was the possibility of reducing amount of I/I within the Red River collection system to enable the Ocean Hills Pump Station to operate as originally designed and allow future expansion of the sewer service.  The quantities of I/I measured in the Red River system line are high and the I/I flows, or physical problems causing the I/I may be the primary cause of surcharging on this line.  It is suspected that line damage or root penetration is reducing the capacity of this line.  If 50% of this I/I could be eliminated, the Red River trunk line should have sufficient capacity to handle current flows generated along this line as well as the 200 gpm from the Ocean Hills Pump Station.  With increased flows due to expansion, however, the Red River trunk line capacity will be insufficient to handle flows from the Ocean Hills Pump Station, even after completion of any I/I rehabilitation.  Consequently, I/I removal within the Red River system will not correct the current deficiencies created by the Ocean Hills Pump Station system.

The Dyer Partnership (2000) also examined two regional sewer system alternatives. Modifications to the Ocean Hills Pump Station were considered an essential part of both alternatives.  In the first alternative (i.e. Red River Upgrade), replacement of the Red River trunk line (from 8-inch to 18-inch diameter) and Grade School Pump Station system was considered.  The second alternative (i.e. Crestline Bypass) included construction of a new Ocean Hills force main, replacement of the Crestline gravity sewer, installation of the Crestline Bypass sewer, and modifications to the Treatment Plant Lift Station.  Based on preliminary cost estimates for construction of these alternatives, the Crestline Bypass alternative was considered the more economical alternative for modifying the existing system to handle future sewer expansion ($1,031,500 vs. $1,425,000).  The Dyer Partnership (2000) recommended the proposed Ocean Hills Pump Station system modifications and Crestline Bypass.

Summary

Several different engineers and engineering firms have investigated the sewer needs of the Ocean Hills and South Waldport area.  A number of alternatives have been identified and explored in detail.  Of the alternatives examined, the general consensus of the engineering reports is the 1) need to correct the deficiencies of the Ocean Hills Pump Station system, 2) selection of the Ocean Hills Pump Station site for a regional pump station, and 3) construction of the Crestline Bypass system.

4.            Proposed South Waldport Project

The proposed Project itself consists of four main elements: 1) modifications to the existing Ocean Hills Pump Station and installation of a new 8-inch diameter raw sewage force main, 2) installation of a 15-inch gravity sewer line on Crestline Drive, 3) installation of the Crestline Bypass Improvements and 4) installation of a 4-inch diameter reclaimed water force main to the Crestview Hills Golf Course.  A map of the proposed improvements is presented in Figures A and B (see attached).  Additional maps and photographs of selected areas of the proposed project are presented in the Environmental Report, South Waldport Sewer Improvements (Ibid 2001). 

Ocean Hills Pump Station & Force Main

The proposed improvements to the existing Ocean Hills Pump Station include reducing the wet well size and installing the following equipment: higher capacity pumps, a telemetry system, a force main air injection system, and a standby-generator. The existing vacuum-primed duplex pumps would be replaced with a triplex submersible pump system adjacent to the existing dry well.  The hydraulic capacity of the pump station will be sized to handle a peak instantaneous flow (PIF) of 480 gpm, which is the projected 20-year PIF for South Waldport excluding the proposed Urban Growth Boundary No. 3.  The existing wet well will be modified to reduce its size and adjust its geometry or a new wet well will be constructed. The best course for the pump station’s wet well will be investigated during design.  The pump station controls and auxiliary equipment (telemetry, air injection system, and standby generator) will be housed in a small building adjacent to the existing station.

A new 8-inch diameter force main (approximately 6,500 lineal feet) would be installed from the Ocean Hills Pump Station, located east of Highway 101 on Parmelee Drive, to Range Drive, then to Crestline Drive to the Salmon Street intersection.  The force main would terminate at the southern most manhole that begins the 15-inch diameter gravity sewer main on Crestline Drive (see below).  The proposed force main would be installed using open cut, or open trench, methods.  Well-graded, imported aggregate would be used for backfilling of trenches underneath asphalt concrete (AC) pavement.  A 1½-inch overlay of the AC pavement will be performed on Range Drive and Crestline Drive. For unpaved surfaces (e.g. dirt roads, paths, etc.), native material removed from the trench would be used to backfill over the pipe trench.

From the Ocean Hills Subdivision to Range Drive, the alignment of the new force main will follow the existing force main route, which is along a 10 to 20 feet wide utilities right-of-way consisting of a dirt lane.  Existing utilities along this route include the existing 6-inch diameter sewer force main, television cable line, the City’s 8-inch diameter water main (from Ocean Hills to approximately Seabrook Lane), and Southwest Lincoln Water District’s 8-inch diameter water main (from Seabrook Lane to Range Drive). From Range Drive to Crestline Drive, the new force main would be constructed within the existing AC roadway because the City’s water main is on the north side of the street and Southwest Lincoln Water District’s water main is on the south side of the street.  The anticipated alignment of the force main on Crestline Drive from Range Drive to Salmon Street is in the existing AC roadway or on the west shoulder of the road.  Actual location will depend on the amount and type of conflicts with existing utilities (i.e. water, sewer, power, telephone, etc).

Crestline Drive 15-Inch Sewer Main

To handle the sewage collected from South Waldport, a new 15-inch diameter gravity sewer main will be installed on Crestline Drive from Salmon Street to near the Cedar Street intersection.  The gravity sewer alignment along Crestline Drive would be within the asphalt roadway due to the lack of available space on the roadway shoulders and conflicts with existing utilities.  Installation of the new 15-inch diameter sewer main would include replacement of approximately 100 existing service connections and portions of the associated sewer laterals.  Open trench construction for the installation of the sewer mains is proposed for these improvements.  A 1½ -inch overlay of the AC pavement is also recommended for placement on the impacted sections of Crestline Drive.

Crestline Bypass Sewer Improvements

The proposed Crestline Bypass Sewer Improvements include installation of a new 15-inch diameter gravity sewer from Crestline Drive to near the Township 13 Pump Station and thence to the City’s Wastewater Treatment Plant, and a 8-inch diameter sewer main from the Township 13 Pump Station to the new 15-inch gravity line.  In addition, the proposed improvements include decommissioning of the Township 13 Pump Station, and modifications to the Treatment Plant Lift Station. 

From Crestline Drive to the Township 13 Pump Station, the gravity sewer would be installed in an infrequently used dirt road (10 to 15 feet wide). The proposed gravity sewer lines would be installed using open trench methods.  Well-graded, imported aggregate would be used for backfilling of trenches underneath AC pavement.  For unpaved surfaces (e.g. dirt roads, paths, etc.), native material removed from the trench would be used to backfill the pipe trench.

The sewer main alignment for the 8-inch and 15-inch diameter  mains from the Township 13 Pump Station to the City’s existing wastewater treatment plant would be within a combination of existing and newly constructed dirt paths/roads.  An easement would be required for the sewer alignment in this area.  From Township 13 Pump Station, an 8-inch diameter gravity main would be placed in an existing dirt lane and connect to the 15-inch diameter gravity line from Crestline Drive at a new manhole.  From this point to the City’s treatment plant, the new 15-inch diameter gravity line would be installed cross-country over a previously logged area that includes two upland drainage ways. Installation of a culvert and road fill is proposed for both upland drainage way crossings. 

The Treatment Plant Lift Station, located at the City’s wastewater treatment plant site, would be modified to increase hydraulic capacity with the addition of new non-clog submersible pumps.  These pumps would be sized to handle the projected flow originating from the Ocean Hills Pump Station and the Crestline Drive collection basin.

5.            Environmental Issues

Environmental issues related to the design, construction and operation of the proposed project were investigated and discussed in Environmental Report, South Waldport Sewer Improvements (2001), Addendum No. 1 to this report (2001), and Addendum No. 1 to the City of Waldport Collection System Master Plan (2002).   The proposed mitigation measure, implementation criteria, and measure enforcement are summarized in Table 2. 

The proposed South Waldport Sewer Improvements are consistent with the 20-year growth projections within the present UGB and the City’s long-range plan.  The proposed improvements identified and discussed in this Addendum are consistent with the Environmental Report, South Waldport Sewer Improvements (April 2001).

TABLE 2  
SUMMARY OF PROPOSED MITIGATION MEASURES AND IMPLEMENTATION  

6.            Easements

Several easements will be required for construction of the proposed improvements.  From the Ocean Hills Pump Station to Range Drive, it is anticipated that six temporary construction easements, and possibly six permanent easements, will be required for the new improvements.  Although there are existing wastewater infrastructure within the project area (i.e. existing pump station and force main), permanent easements may be required depending upon the language of the existing easements and final routing location.

No easements will be required on Range Drive and Crestline Drive as the proposed force main and gravity sewer would be within the public right-of-way.

From Crestline Drive to the City’s wastewater treatment plant, acquisition of six permanent and construction easements is anticipated.  There is an existing force main with an alignment between Township 13 Pump Station and Crestline Drive.  If the existing easement for this sewer line allows for the installation of the proposed 15-inch diameter gravity main then only five permanent easements would be required. 

The anticipated cost for acquiring the necessary easements is estimated to range from $5,000 to $10,000.  The cost for legal review of the easements is included within the Project costs.  Any compensation to private property owners would from the Project’s contingencies.  The actual number of easements and cost for acquisition would be determined prior to construction.

7.            Project Cost Summary

The cost estimates presented in this Addendum include four components: 1) construction, 2) contingency, 3) engineering, and 4) legal, administration, and financing.  Construction cost estimates are based on estimated quantities and construction costs from similar projects. The contingency for the proposed improvements was estimated to be from 11 to 15 percent.  Engineering costs were estimated to be from 17 to 20 percent depending upon the complexity of the improvement.  Legal, administrative, and financing costs were estimated to be from 7.4 to 7.7 percent of the construction cost.  The legal, administration and financing cost components in this report are related to the planning, design and construction of the proposed improvements.  This cost component does not include the associated cost for long-term administration of the financing mechanism utilized for the project (e.g. 20-year financing for a local improvement district, LID).  In addition to the above four cost components, a cost for right-of-way acquisition was added for the Crestline Bypass Improvements as much of the proposed sewer main alignment is within private property.

A summary of the estimated project costs for the recommended improvements are given in Table 3.  A copy of more detailed cost estimates is attached as Table A-1 (see Appendix).

TABLE 3  
PROJECT COST SUMMARY  

8.            Financing

Rural Development has obligated a combination of loan and grant funds to the City for financing the South Waldport Sewer Improvements.  This finance package is for $2,144,000 consisting of $1,274,000 in a loan at 4.75 percent interest and $870,000 in grant. 

Three financing mechanisms or plans have been proposed for local financing of the South Waldport Sewer Improvements.  For ease of identification, these three programs have been designated as Plans “A”, “B”, and “C”.   Plan A utilizes revenue bonds payable from the City’s sewer user fees for financing all of the proposed improvements.  Plan B incorporates a combination of revenue bonds and a Local Improvement District (LID) to finance the improvements.  In Plan C, the proposed improvements are financed solely with a LID.  A brief overview of revenue bonds and local improvement districts is given below followed by a discussion on the proposed financing plans.

Revenue Bonds

Revenue bonds are payable solely from charges made for the services provided.  These bonds cannot be paid from tax levies or special assessments; their only security is the borrower's promise to operate the system in a way that will provide sufficient net revenue to meet the debt service and other obligations of the bond issue.

Many communities prefer revenue bonding, as opposed to general obligation bonding, because its insures that no tax will be levied.  In addition, debt obligation will be limited to system users since repayment is derived from user fees.  Another advantage of revenue bonds is that they do not count against a municipality's direct debt, but instead are considered "overlapping debt.” This feature can be a crucial advantage for a municipality near its debt limit or for the rating agencies, which consider very closely the amount of direct debt when assigning credit ratings. Revenue bonds also may be used in financing projects extending beyond normal municipal boundaries.  These bonds may be supported by a pledge of revenues received in any legitimate and ongoing area of operation, within or without the geographical boundaries of the issuer.

Successful issuance of revenue bonds depends on the bond market evaluation of the revenue pledged.  Revenue bonds are most commonly retired with revenue from user fees.  Recent legislation has eliminated the requirement that the revenues pledged to bond payment have a direct relationship to the services financed by revenue bonds. Revenue bonds may be paid with all or any portion of revenues derived by a public body or any other legally available monies.  In addition, if additional security to finance revenue bonds was needed, a public body may mortgage grant security and interests in facilities, projects, utilities or systems owned or operated by a public body.

Normally, there are no legal limitations on the amount of revenue bonds to be issued, but excessive issue amounts are generally unattractive to bond buyers because they represent high investment risks.  In rating revenue bonds, buyers consider the economic justification for the project, reputation of the borrower, methods and effectiveness for billing and collecting, rate structures, provision for rate increases as needed to meet debt service requirements, and track record in obtaining rate increases historically.  In addition, other factors considered include adequacy of reserve funds provided in the bond documents, supporting covenants to protect projected revenues, and the degree to which forecasts of net revenues are considered sound and economical.

Municipalities may elect to issue revenue bonds for revenue producing facilities without a vote of the electorate (ORS 288.805-288.945).  In this case, certain notice and posting requirements must be met and a 60-day waiting period is mandatory.  A petition signed by five percent of the municipality's registered voters may cause the issue to be referred to an election.

Local Improvement District (Improvement Bonds)

Improvement bonds issued for local improvement districts (LIDs) are used to administer special assessments for financing local improvements in cities, counties, and some special districts.  Common improvements financed through a LID include storm and sanitary sewers, street paving, curbs, sidewalls, water mains, recreational facilities, street lighting, and off-street parking.  The basic principle of special assessment is that it is a charge imposed upon property owners who receive special benefits from an improvement beyond the general benefits received by all citizens in the community.  A public agency should consider three “principles of benefit” when deciding to use special assessment: 1) direct service, 2) obligation to others, and 3) equal sharing/basis.  Cities are limited to improvement bonds not exceeding three percent of true cash value.

The Oregon Legislature has provided cities with a procedure for special assessment financing (ORS 223.387-399), which applies when city charter or ordinance provisions do not specify otherwise. To establish a LID, an improvement district is formed, the boundaries are established, and the benefited properties and property owners are determined. An approximate assessment to each property is determined based on the above three principles of benefit and is documented in a written report.  Property owners are then given an opportunity to object to the project assessments.  The assessments against the properties are usually not levied until the actual cost of the project is determined.  Since this determination is normally not possible until the project is completed, funds are not available from assessments for the purpose of making monthly payments to the contractor. Therefore, some method of interim financing must be arranged based on the estimated total costs.

The primary disadvantage to this source of revenue is that the property to be assessed must have a true cash value at least equal to 50 percent of the total assessments to be levied.  As a result, owners of undeveloped property usually require a substantial cash payment.  In addition, the development of an assessment district is very cumbersome and expensive.

Two maps of the proposed LID are provided in this report.  A overview map (8½ “ X 11”) of the proposed LID is presented in Figure C.  A larger map (24” X 48”) of the LID, with individual tax lots, is also included in a separate folder at the end of the report (Figure D).  In addition, a copy of a legal description is provided at the end of the report.

Financing Plan A

With Financing Plan A, local financing of the proposed improvements would be accomplished through revenue bonds.  Total project cost for the proposed improvements is estimated to be $2,144,000.  The amount of loan and grant is $1,274,000 and $870,000, respectively.  The debt service resulting from a loan of $1,274,000 at 4.75 percent interest for 40 years is as follows.  The projected monthly debt service was calculated based on an equivalent residential unit (ERU) and average unit of water-consumed basis.  The average monthly water consumed by an ERU was calculated to be 3,837 gallons per month or 5.12 units per month where one unit equals 750 gallons (City of Waldport 2001).

New Annual Debt Service                         = Loan Amount X Capital Recovery Factor  
                                                            = $1,274,000 x 0.05630 
                                                            =  $71,726.20 per year

No. of Wastewater ERUs in the City     =  1,171

New Monthly Debt Service Per ERU            = Annual Debt Service/ (ERUs) X (12 months/year) 
                                                            =  $71,726.20 / (1,171 ERUs X 12 months/year) 
                                                            =   $5.10 per ERU-month.

New Debt Service Per Average 
Unit Water Consumed                             = Monthly Debt Service Per ERU/Ave.Units Consumed 
                                                            = $5.10 per ERU-month / 5.12 units/ERU-month) 
                                                            = $1.00 per unit of water consumed.

A summary of the annual and monthly sewer user costs with the proposed revenue bond is presented in Table 4.  These costs include operation and maintenance, new debt service, and debt reserve that will be required by Rural Development.

TABLE 4  
SEWER USER COSTS WITH FINANCING PLAN A  

                        ⁽¹⁾ – Based on 1,171 ERUs or 5.12 units of water per month.

Financing Plan B

As mentioned above, proposed Financing Plan B uses of a combination of a revenue bonds and a LID to finance the South Waldport Sewer Improvements.  The rationale for Plan B is summarized below.

Revenue Bonds.  This financing mechanism would be utilized to finance the following improvements including the 1) Force Main Along Range Drive, 2) Crestline 15-Inch Diameter Sewer Main, and the 3) Crestline Bypass Sewer Improvements.  With these improvements, sewage generated within the South Waldport area will be conveyed directly to the City’s WWTP, which relieves capacity limitations at the City’s Grade School Pump Station and associated force main.  All sewer users within the City will benefit from these improvements.

Local Improvement District (LID).  A LID would be used to assess the properties in South Waldport that would directly benefit from the increase in wastewater conveyance capacity for this area.  The proposed LID would finance the Ocean Hills Pump Station and Force Main to Range Drive as these improvements will specifically benefit property owners located in the southern part of the City.  The addition of new sewer service to both developed and undeveloped lots in South Waldport is limited by the ability to convey sewage from this area to the City’s Wastewater Treatment Plant (WWTP).  Construction of the proposed improvements to the Ocean Hills Pump Station and Force Main to Range Drive will provide sufficient capacity to convey sewage from the South Waldport area for the next 20 years.

Relative Project Costs.  Relative project costs for the improvements to be borne by the LID and via revenue bonds is 30.74 percent and 69.26 percent, respectively.  The proposed loan and grant amounts were calculated based on the above relative percent costs.  A breakdown of the proposed local financing is shown in Table 5. 

TABLE 5  
PROPOSED LOCAL FINANCING FOR FINANCING PLAN B  

A detailed discussion of these proposed local financing mechanisms is discussed in detail below.

Revenue Bond Financing.  With the proposed revenue bonds, all users of the City’s sewer system would make repayment of these bonds.  Total project cost for the revenue bond financed improvements is estimated to be $1,485,000.  The amount of loan and grant allocated to the revenue bond financed portion of the improvements is $882,440 and $391,560, respectively.  The debt service resulting from a loan of $882,440 at 4.75 percent interest for 40 years is as follows.  The monthly debt service was calculated in a manner similar to the procedures discussed in Financing Plan A.

New Annual Debt Service                         = Loan Amount X Capital Recovery Factor  
                                                            = $882,440 x 0.05630 
                                                            =  $49,681.37 per year

No. of Wastewater ERUs in the City     =  1,171  

New Monthly Debt Service Per ERU            = Annual Debt Service/ (ERUs) X (12 months/year) 
                                                            =  $49,681.37 / (1,171 ERUs X 12 months/year) 
                                                            =   $3.54 per ERU-month.

New Debt Service Per Average  
Unit Water Consumed                             = Monthly Debt Service Per ERU/Ave.Units Consumed 
                                                            = $3.54 per ERU-month / 5.12 units/ERU-month) 
                                                            = $0.69 per unit of water consumed.

A summary of the annual and monthly sewer user costs with the proposed revenue bond is presented in Table 6.  These costs include operation and maintenance, new debt service, and debt reserve that will be required by Rural Development.

TABLE 6  
SEWER USER COSTS FOR REVENUE BONDS FOR FINANCING PLAN B  

                        ⁽¹⁾ – Based on 1,171 ERUs or 5.12 units of water per month.

LID Financing.  A LID is proposed to assess individual properties in South Waldport for the financing of the 1) Ocean Hills Pump Station and 2) Force Main to Range Drive Improvements.  Each property owner in the LID would be assessed for the loan portion ($391,560) of the above improvements and will have the option of paying its assessment up front, finance the assessment or having it applied as lien on the property.

The proposed properties within the LID are shown in Figure C.  Each property within the LID was given a property number to assist in identification.  A description, assessed value and property owner of each lot, parcel of land or portion, to be specially benefited is presented in the Appendix.  In addition, a legal description of the LID boundaries is also found in the Appendix.

The proposed assessment for each of the LID properties was based on the number of equivalent residential units (ERUs) that would be served by the project.  City staff estimated the number of ERUs within the LID based on a number of variables including land use (i.e. residential, commercial, and industrial), parcel size, historical trends in property development, water consumption, and natural features (e.g. wetlands, lakes).  The number of ERUs for large residentially zoned parcels was estimated based on a minimum lot size of 6,000 square feet and assuming that 20 to 25 percent of the land would be either unbuildable (e.g. wetlands) or dedicated to public facilities (e.g. streets, parks).  The anticipated use and usable area for development served as the basis for commercial parcels.  The number of ERUs for Patterson State Park was determined from historical water consumption.

The total number of ERUs calculated for the proposed LID is 789.  The assessment per ERU is as follows.

LID Assessment Per ERU                     = Loan Amount / Number of ERUs 
                                                            = $391,560 / 789 ERUs 
                                                            = $496.27 per ERU (approx.)

The estimated assessment for each property is given in Table 7 (see end of Report).

Financing Plan C

With Financing Plan C, local financing of all the South Waldport Sewer Improvements would be accomplished solely through a LID.  Total project cost for the proposed improvements is estimated to be $2,144,000.  The amount of loan and grant is $1,274,000 and $870,000, respectively.  Each property owner in the LID would be assessed for the loan portion ($1,274,000) of the above improvements and will have the option of paying its assessment up front, finance the assessment or having it applied as lien on the property.  The LID boundaries, participants and number of ERUs (i.e. 789) would be the same those described for Financing Plan B.  The assessment per ERU is as follows.

LID Assessment Per ERU                     = Loan Amount / Number of ERUs 
                                                            = $1,274,000 / 789 ERUs 
                                                            = $1,614.70 per ERU (approx.)

The estimated assessment for each property is given in Table 8 (see end of Report).

SUMMARY OF FINANCING PLANS

All of the Financing Plans provide a means of financing the proposed South Waldport Sewer Improvements.  Financing Plan A distributes the improvement cost over all sewer users via repayment of debt service and reserve in the monthly sewer rates.  Total estimated increase in monthly sewer user rates is $5.10 per ERU or average of $1.00 per unit of water consumed.  The advantage of Financing Plan A is ease in implementation and administration.  However, this financing plan does not recover the project costs resulting from new development until new service is provided and repayment of the debt service and reserve is made in the monthly sewer rates.  Additional costs attributed to new development could be recovered by implementing either improvement or reimbursement system development charges (SDCs) for the proposed improvements.  The methodology for derivation of SDCs will need to be established, documented and available to the public for review and comment.

Financing Plan B distributes a portion of the project cost to all sewer users via monthly sewer rates and the remaining to a LID located in South Waldport.  Total estimated increase in monthly sewer user rates for financing revenue bond portion is $3.54 per ERU or average of $0.69 per unit of water consumed. The estimated LID assessment per EDU is $496.27 per ERU.  The advantage of Financing Plan B is the collection of payment from both developed and undeveloped properties at the beginning of the project in South Waldport. The disadvantages of this Plan include 1) no recovery of project costs from new development outside South Waldport except through monthly user fees for debt service and reserve, and 2) implementation and administration of both a revenue bond and LID.  As with Financing Plan A, a SDC could be developed as part of Plan B for recovery of the costs attributed to new development.  However with the implementation of a SDC, the City would be required to implement and administer three financing programs for the proposed improvements: revenue bond, LID, and SDC.

With Financing Plan C, the project costs are distributed over a LID located in South Waldport.  The estimated LID assessment per ERU is $1,614.70 per ERU.  The advantage of Financing Plan C is the collection of payment from both developed and undeveloped properties in South Waldport, and there is only one financing program to implement and administer.  The primary disadvantage of Plan C is no recovery of project costs from new development outside South Waldport that would benefit from the project.

A strong case can be made to finance the South Waldport Sewer Improvements with either Financing Plan A or B.  If the property owners of South Waldport are willing to be part of a LID, then Financing Plan B is the recommended approach as it distributes a portion of the cost for new development to undeveloped properties.  If an LID cannot be formed in South Waldport, then Financing Plan A is recommended for implementation of the proposed improvements.  Financing Plan C is considered the least favored plan because 1) all the project costs would be borne by a LID, and 2) new development in other parts of the City benefits from portions of the proposed project.

9.            References

Dyer Partnership Engineers & Planners, Inc., The, Drawing R501, Site Plan and Details for Seabrook Pump Station, Water System Improvements for Southwest Lincoln County Water District, Coos Bay, September 1996.

Dyer Partnership Engineers & Planners, Inc, The, Preliminary Engineering Report – Crestline Drive Bypass to Wastewater Treatment Facility, Coos Bay, December 1998.

Dyer Partnership Engineers & Planners, Inc, The, Wastewater Collection System Master Plan, Coos Bay, May 2000.

Dyer Partnership Engineers & Planners, Inc., The, Environmental Report, South Waldport Improvements, Coos Bay, April 2001.

Dyer Partnership Engineers & Planners, Inc., Addendum No. 1 to the Environmental Report, South Waldport Improvements, Coos Bay, June 2001.

Dyer Partnership Engineers & Planners, Inc, The, Addendum No. 1 to Wastewater Collection System Master Plan, Coos Bay, March 2002.

Hasan, S.M., P.E. Consulting Engineer, Ocean Hills Waldport, Oregon – Preliminary Engineering Report for Wastewater Transmission Facilities, Ocala, Florida, 1996.

PacWest Engineering, Engineer’s Report – Ocean Hills Local Improvement District, Albany, May 1998a.

PacWest Engineering, Engineer’s Report – Patterson Creek Drainage Sanitary Sewer Study, Albany, September 1998b.

Waldport, City of, Application for Federal Assistance – Summary of Project Users, April 5, 2001.

Westech Engineering, Engineer’s Report – South Waldport Sanitary Sewer Local Improvement District, Salem, May 1997.