Ocean View Town Council voted to move forward with a proposed central water system for unserved portions of town at its regular meeting on Tuesday, March 2, 2004.
Council based its decision on the results of a non-binding referendum on Saturday, Feb. 21, which resulted in a vote of 220 for centralized water and 139 against, or 61.3 percent for and 38.7 percent against.
The vote allows the town to move forward with applying for funding for the estimated $3.8 million project, soliciting bids for construction, and obtaining the Certificate of Public Convenience and Necessity that would allow the town to serve the proposed territory.
The proposed territory encompasses 986 lots, with 666 improved lots, in sections of town that don't currently have central water.
The territory largely covers the areas immediately north and south of Route 26 but does not include large developments such as Savannah's Landing, The Cottages, Bear Trap, Wedgefield/Avon Park, Hunter's Run, Briarcliffe and Fairway Village, which are already served by either Tidewater Utilities Inc. or the Town of Bethany Beach.
The proposed water system would be owned by the town but operated by Tidewater, which won the bid for water supply, operations and maintenance, and meter reading on Oct. 7, 2003, against Artesian Water Company and Sussex Shores.
Tidewater received a special bulk rate for the town of $2.73 per thousand gallons of water used in December 2003. The town has decided to charge its customers $2.90 per thousand gallons.
The system would cost owners of improved properties approximately $390 for 40,000 gallons of usage per year including debt service. Properties that used 80,000 gallons per year would pay approximately $510 per year total. Owners of unimproved properties would pay $244 per year for the debt service and operations and maintenance.
Council said those figures were based on using only United States Department of Agriculture financing and include all costs associated with the proposed system, such as debt service and operations and maintenance, except for costs associated with hiring a plumber to hook each home up to the system and disconnect an existing well.
Council said residents in the proposed service territory would be able to continue using their existing wells for outside irrigation provided the well is disconnected from the home.
Council has proposed to apply for USDA funding for the entire $3.8 million, but agreed at its March 2 meeting to again consider municipal bond financing at the request of those who do not want to be forced to hook up to the new system -- USDA regulations require that the town pass a mandatory hookup ordinance.
The town must have its application for funding to the USDA by March 31. Along with the application, council introduced an ordinance authorizing the council to borrow up to $3.8 million for the project at its March 2 meeting. The town has been told it does not qualify for grants from either the state or the USDA because the its median household income is too high.
The latest chapter in the saga of Ocean View's quest for public water began in May 2002, when the council met to discuss the options for providing such a service and the financing required.
During those discussions, the council decided a town-owned distribution system, with all services out-sourced to a third party, would be the most cost-effective option.
The project would take about two years to complete, according to estimates from Davis, Bowen & Friedel, the town's engineering consultant, which estimates the system could be in place by April 2006 with the first bills going out in September 2006. If council goes forward with USDA funding, the mandatory hookup ordinance would require owners of improved lots to be connected within one year, or April 2007.
More information on the proposed system and voter eligibility in the referendum are available on the town web site at http://www.oceanviewde.com.