FOR IMMEDIATE RELEASE
SUBJECT: PUBLIC SCOPING MEETING REGARDING PLANNED WASTEWATER MANAGEMENT FACILITY AND CORRESPONDING LOAN AND RATE ADJUSTMENTS
McKinleyville, CA – McKinleyville Community Services District will hold a Public Scoping Meeting on Tuesday, March 24, 2015 at Azalea Hall beginning at 6:00pm, regarding the planned Wastewater Management Facility (WWMF) and rate adjustments to facilitate financing.
The upgrade of the WWMF will allow the District to provide wastewater service for the next 20 years. The cost of the planned Wastewater Management Facility is $17 million. As a result of the District’s efforts with the California State Water Resource Control Board, a low interest loan has been secured to fund the facility. The loan is expected to have a fixed interest rate of only 2 percent. This interest rate is historically low, and the District is unlikely to secure borrowing at a rate lower than this.
In 2012, a financial plan was completed, utilizing the best information available at that time, in order to develop updated wastewater rates. It was anticipated then, that there would likely need to be an additional rate increase as the WWMF planning continued. This year, an updated financial study of the wastewater enterprise’s financial position was undertaken, based upon updated information, specifically more complete engineering cost estimates for the facility itself, as well as refined estimates of new operating costs.
This study was completed in order to ensure that the wastewater system will be able to responsibly support the loan, as well as the increased operating costs associated with the upgraded WWMF. The District retained an independent consultant to review the wastewater financials and rates. The consultant prepared a long-term financial plan that includes a series
of wastewater rate adjustments necessary to support the new facilities costs. While the District will need to raise rates to support its infrastructure needs, a comparison to surrounding communities’ rates revealed that McKinleyville will still have competitive wastewater rates, lower than many of the surrounding districts, even while proactively addressing a major infrastructure need.
In 2009, MCSD undertook a Wastewater Facilities Feasibility Study which ultimately identified the need for a Wastewater Management Facility Upgrade, in order to continue providing wastewater treatment service to customers, while remaining in compliance with the NPDES permit requirements.
Throughout the progression of the Feasibility Study, District Staff worked internally, with consulting engineers, and with the public to evaluate multiple alternatives, which resulted in the development of a list of four alternatives for further in-depth study. The 20 year Draft Facility Plan was presented for public comment in October 2011, and the updated Plan was presented to the Board in November 2011. In addition, the District conducted a public workshop to discuss options for funding the WWMF, and as a result has been working with the California State Water Resource Control Board to secure a low interest loan for the project.
The American Water Works Association, in their 2014 State of the Industry Report, concluded that the “State of Water and Sewer Infrastructure” is the number one issue facing the water and sewer industry. Infrastructure around the County is aging and in need of replacement; the American Society of Civil Engineers recently graded our County’s water and sewer infrastructure a “D” on the academic A to F scale.
When asked, General Manager Orsini stated, “I would give MCSD’s infrastructure grade a “B”. We have made the decision to be proactive and address our infrastructure needs, and our ratepayers have been supportive in our efforts”. Since 2006, MCSD has been considering options for needed facilities to ensure its ability to provide wastewater treatment services to current and future District customers. The issuance of an updated NPDES discharge permit in 2008, which would place more stringent requirements on the District related to its discharge of wastewater, accelerated planning and discussion toward a long-term solution.