Will See Reduction in Rates
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GEORGETOWN -- Sussex County Council heard rates and plans for two sewer projects in the Ocean View area at its regular meeting on Tuesday, Aug. 21, 2001.
Council approved a $177,718 payment to take over the ownership, operation and maintenance of the Holts Landing Sanitary Sewer District, and heard the proposed new rates for the Ocean View expansion of the Bethany Beach Sanitary Sewer District.Holts Landing Sewer
Under the terms of the deal presented by County Assistant Engineer Russ Archut, homeowners and developers in the sewer district will contribute to the cost of purchasing the existing contract, debt and future earnings of the system's current operator, Utility Systems Inc.
Archut said homeowners in the district asked the county to take over the operation and maintenance of the system. The county already provides treatment services for the system to Utility Systems Inc.
During negotiations, USI originally valued the system at $725,000, but a consultant for the county valued the system at $177,718.
In the end, the parties agreed to a purchase price of $586,000, Archut said, with developers in the district agreeing to pay the additional $408,282 and homeowners accepting responsibility for outstanding accounts receivables. An escrow account will be established to cover the outstanding accounts receivables.
As a result, although front footage assessments will rise from $2.50 to $5.58, homeowners will see their sewer charges drop from an average of $1,007 per year to an average of $680 per year because they will no longer have to pay a $600 annual fee to Utility Systems Inc.
Archut also said that Utility Systems Inc. will be responsible for all liabilities incurred through Nov. 1, with the county's responsibilities beginning after Nov. 1.
Archut said the county must make major improvements to the system's pumping station and pipes and has budgeted $1.3 million for those improvements, a figure which may rise or fall depending on the system's final design and bids. Stickels said costs for the system upgrades will not come out of the county's general fund but from user fees.
In addition, because the USI system is different than the county's system, USI has agreed to help train county employees in the operation and maintenance of the system.
In response to concerns from Councilman George Cole regarding final inspections of the system before the county takes over, Archut and County Administrator Robert L. Stickels said any problems that arise before Nov. 1 will have to be paid for by Utility Systems Inc.
After council voted 4-0 to authorize the engineering department to exercise the agreements necessary for the purchase, homeowners in attendance applauded.
Council President Dale Dukes abstained from voting due to a business relationship with a developer in the district.Ocean View Sewer
Residents in Ocean View also received good news regarding their new sewer system.
Expected to be online by the end of August, David Baker, the county's finance director, told council that Ocean View sewer customers will see substantially lower rates than they approved in a 1996 referendum.
Baker said Ocean View residents, after a state grant and a lower interest rate than expected on the county's $6.2 million State Revolving Fund Loan, will now pay an annual service charge of $195.10 per year, which matches the service charges paid by customers in Bethany Beach and South Bethany.
In addition, Baker said Ocean View customers will only pay an annual assessment of $2.68 per front foot instead of the $5.63 assessment they approved in the 1996 referendum.
Baker said a $1.7 million state grant and a 20-year loan at 1.5 percent interest rather than an anticipated rate of 3.5 percent accounted for the reductions.
Council will hold a public hearing at its Sept. 18 meeting on the proposed rates.
Stickels congratulated the county's engineering department and utility construction department for keeping the project's price at $7.914 million given the delay in the system's construction caused by the bankruptcy of the contractor, L.A. Merrell, during construction, and the necessity of hiring Teal Construction to help Merrell complete the system.
The system will go online by Aug. 31, Stickels said, which puts it about 10 months behind its original target date.
"This project could have been a catastrophe," said Stickels. "But the engineering department and Mr. (Robert) Green (directory of utility construction) did a very good job in managing this project."Paramedic Pension Plan
Council unanimously approved a change in the pension plan formula for paramedics and dispatchers in a move to thwart the high turnover rate those departments have experienced in the past three years.
County Finance Director Dave Baker told council that the new formula increases pensions from 1.67 percent of an employee's annual salary multiplied by years of service to 2 percent of the average annual salary times years of service.
The result is that an employee with 25 years of experience with an average annual salary of $40,000 will see an increase in their pension from $16,700 to $20,000 per year.
New employees will be automatically enrolled under the new formula while existing employees will have the option of switching to the new formula or remaining under the current plan, Baker said.
Baker said the county has budgeted $328,812 in its current budget for a one-time contribution to the fund to cover all past years.
Baker added that the increase should stem the 30 percent turnover rate the county experienced in those departments from July 1998 to December 2000. He said that rate was double the rate of other counties and municipalities.
"And it's very expensive to train new paramedics and dispatchers," he said.Proposed Ordinances
Council heard the following proposed new ordinance requests:
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