Bid Opening: November 21, 2017 @ 2:00 PMView Bid Opening Sheet
Where is Warren’s Wastewater Treatment Facility?
Warren’s Wastewater Treatment Facility is located on Water Street, in the area south of Wheaton Street and north of Longwharf Drive. Wastewater is pumped to the site through 10 pump stations located around Town. An average of between 2.53 and 3.43 million gallons per day of wastewater is received and processed by the plant. Treated water is discharged to the Warren River. Sludge, the byproduct of treatment, is processed and stored on site, with final disposal occurring at an off site location.
What are we proposing?
The Town of Warren is proposing a comprehensive upgrade to the existing Wastewater Treatment Facility. With the support of the Town Council, funding for this project is being presented for voter approval as part of the November 8, 2016 ballot. The total funding request totals $20 million. For the owner of a home at the median value of $216,100, this would add $23.04 per month or around $0.76 per day to the tax bill. The tax rate impact, including financing costs, is expected to total $1.28 per thousand. The Town is continuing to pursue any additional funding sources that could lessen the impact on the tax rate.
Why are we doing this?
To keep up with environmental regulations that protect water quality, the Town of Warren must upgrade its wastewater treatment facility, both the process by which sewage is treated and the equipment needed for that purpose. The facility was originally built in 1940 and last underwent major renovations in 1981. The mechanical and electrical equipment has passed its expected useful life and is not able to meet environmental standards established by a state discharge permit.
In 2011, Warren negotiated and entered into a Consent Agreement with the state, which described the steps the Town will take to meet the state’s environmental standards, and gave the Town time to come into compliance with its new permit. The treatment facility upgrades are, in other words, legally required by federal and state law and regulations, and by a binding Consent Agreement. Failure to comply with this Agreement would result in costly fines, penalties and legal fees.
Who has designed the upgrades?
The Town of Warren has engaged the engineering firm of Woodard & Curran, which has acted as the Town’s consulting engineers for all things sewer related for many years. Woodard & Curran is a leader in the field of wastewater treatment, and has designed the project based on the most current regulations and technology. As an added protection to the taxpayer, the Town Council authorized a third-party “peer review” by the engineering firm Wright-Pierce. Wright-Pierce thoroughly reviewed the design at the 30% stage and made recommendations to further increase efficiency and cost effectiveness. This process, often called “value engineering”, has resulted in several adjustments that will help make the project as efficient, cost effective and long-lasting as possible. In addition, because the site of the facility is vulnerable to flooding, the Town has made a special effort in recent months, working with its consultants and with regulatory agency staff, to make sure we are using the best and most recent scientific data and modeling of storm and flooding scenarios, so that the design will provide the best possible protection for the facility and for this big investment.
How can you make sure that this project is completed?
Funding for this project requires the approval of the Warren taxpayers. On November 8, 2016, please vote to approve the bond request for the Wastewater Treatment Plan upgrade, in the amount of $20 million.
Cost, Financing and Impact on Taxes
The proposed $20 million bond issue is based on the cost estimate developed by the consultants last year. It was approved as part of the capital budget by the Town Council and approved by voters on November 8, 2016. Although additional research and design work had to be done this year, beyond what was originally expected, we have managed to keep the overall cost within this limit. The Town was able to arrange for financing at a below-market rate through the RI Infrastructure Bank. The Town continues to look for ways to reduce the amount it has to borrow and, thereby, reduce the cost of financing or “debt service.” The difference that can make is shown in the document “Annual Debt Service Comparison” included in the document library below, which compares a $20 million with an $18 million scenario. For more details on the financing in the two scenarios, please see the RI Infrastructure Bank’s preliminary “Calculation of Borrower Rate” for the two scenarios in the document library.
The total impact on the tax rate from borrowing $20 million (if not offset by savings) is estimated to be $1.28 per thousand. For the owner of a home at the median value of $216,100, this would add approximately $276 per year. In addition to capital cost, however, the cost of operating the upgraded facility is also expected to rise, which is expected to add another $0.37 to the tax rate, for a total of $1.65 per thousand. Lowering the borrowed amount to $18 million results in a lower increase in the tax rate, of $1.52 per thousand.
Such a reduction may be possible if the Town prevails or settles in the lawsuit about education funding, and can apply the funds now held in escrow to the cost of the upgrade. In addition, such an outcome would also result in a significant reduction in the annual Town budget for years to come, since the Town’s payments to the school district would be significant less. Current calculations show that these savings could be sufficient to pay for the cost of the upgrade (or to pay off the loan early and save the remaining cost of financing).
The Town is also looking into its options to pay for this treatment facility upgrade, and perhaps all sewer-related expenses. The key options are to continue the current “ad valorem” taxation method that is applied town-wide; or to switch to one of several user-fee methods (fixed, volumetric or district fees). This evaluation is not yet complete, but it is clear that switching to user fees not only can reduce cost for property owners in non-sewered areas, but will significantly increase cost for the majority of property owners. Apart from the financial calculations, there is a complex policy challenge, since the cost of expensive upgrades (of the treatment plant but also of the sewer system) would be imposed on a smaller number of residents, even though such improvements arguably benefit the entire Town, and even though the Town also spends resources on dealing with waste water and related issues in the non-sewered areas.
Major Issues Addressed by Upgrades
- Reduces the amount of nitrogen discharged which will improve water quality in the Warren River
- Makes the treatment facility more energy efficient and reliable
- Replaces old warn-out equipment
- Improves safety for treatment facility operators
- Makes the facility more resilient to storms and flooding
- Bid and award the construction work in Summer 2017
- Complete construction and be in compliance with water quality standards and permit requirements by 2019
Key Documents (links)
Response to Draft Permit
Facility Design Basis Report
Value Engineering Report
Engineers Comments on Value Engineering Report
Annual Debt Service Comparison
Calculation of Borrower Rate $18M
Calculation of Borrower Rate $20M
Design Flow Report
Presentations to Town Council
2013-10-15 Town Council Workshop Presentation
2014-09-10 Public Hearing on Facility Plan
2015-06-30 Town Council Meeting
2016-02-16 Town Council Meeting
2016-04-25 Town Council Presentation on Value Engineering
2016-09-27 Public Workshop Presentation
2017-07-11 Town Council Update