TO THE CONCERNED TAXPAYERS OF CHATHAM --

1. Barnstable County has made a dramatic turnabout on how to solve the problem of excess nitrogen in Cape Cod coastal embayments. Centralized sewering is out, it's simply "unaffordable." Other approaches are part of the answer, such as decentralized or cluster systems, which cost far less and are preferred by the federal Environmental Protection Agency for less densely populated areas such as Cape Cod towns.
2. The county has requested funds in the FY12 state budget to develop a Capewide plan utilizing centralized, satellite, cluster and onsite treatment to attack the nutrient problem troubling the Cape's embayments. .
3, Falmouth, a town of 30,000, has just voted $2.7 million to examine a very wide range of American, Canadian and European technologies from cluster systems to permeable reactive barriers to composting toilets. Town meeting feared the cost of a centralized sewer would drive families and long-time residents out of town. As one town meeting member said, "We don't want to become a gated community like Chatham."
4. Mashpee, more than twice the population of Chatham, is designing its wastewater treatment and disposal system around eight decentralized/cluster systems. It hopes it can save more than $100-$200 million by not doing a centralized system.
5. Orleans town meeting has also voted money to examine such alternatives. In fact, there will be a public forum on alternative and innovative technologies in Orleans this Saturday at the Old Jailhouse Tavern from 9 to noon. (See notice attached.) Experts from the West Coast and the East Coast will make presentations and field questions on why these alternatives make sense on Cape Cod.
6. What does all this mean for Chatham? A great deal. As county executive Paul Niedzwiecki told the Chatham Board of Selectmen, integrating alternative and innovative technologies into Chatham's wastewater plan could save property tax dollars. We believe savings could be as much as much as 25-40%.
7. What caused the county to drop its insistence that centralized sewering was the wastewater solution for Cape towns? We believe we know of one contributing factor. A knowledgeable and experienced consultant was brought on to analyze potential costs for the towns. The consultant had had significant involvement in the financial aspects of the Boston Harbor clean-up. The project cost billions and created a fierce and bitter fight in all the affected communities that was only resolved when the state legislature agreed to chip in. Even so, the per capita costs on the Cape would be five to six times what
they were for the Greater Boston communities. To get a sense of what numbers might be for Cape towns, the county made the consultant available to Chatham (and to other Cape towns) free of charge.

What the consultant found was that Chatham town officials had vastly understated likely costs. For a 20-year project like this, the consultant said the interest rate assumed was unrealistically low. In making any appraisal of costs, inflation is a factor to be taken into account. Also, the former town manager had not satisfactorily provided for operational and maintenance expenses during the 20 years of construction (estimated by Stearns & Wheler to be $30 million (before any allowance for inflation or borrowing costs).

The estimates produced by Chatham Concerned Taxpayers in 2009 and 2010 because town officials had failed to provide a realistic one took all these factors into account (even using an interest rate lower than the “optimistic” one suggested by the consultant) and derived a projected minimum cost to all property owners of more than $400 million in debt service charges on the property tax.

Not included is the estimated collective cost to those property owners forced to connect to the system, about $29 million. The total cost to taxpayers of about $430 million was almost triple the "full cost" estimate shown in the Warrant for Article 14 of the May 11, 2009 town meeting and about $160 million more than the costs presented by the former town manager at the selectmen's meeting of February 23, 2010.

An updated CCT estimate using the consultant's "optimistic" 3% interest rate and a 3.18% inflation factor derived from an EPA suggested approach for wastewater projects and borrowing construction period O&M along with borrowings for labor and materials costs produced a estimate of total debt service of approximately $460 million. As mentioned individual property owners will have additional costs to connect to the system. Approximately 2/3rds of Chatham's properties will be required to connect because they are in watersheds whose drainage has said to deposit nutrients in potentially vulnerable waters.

Both the consultant and Chatham Concerned Taxpayers used the same 2007 cost estimates prepared by Stearns &Wheler as the starting point. CCT calculated the inflation effect and the cost of construction period O&M as well as the estimated interest cost. The consultant only added his interest factor to the S&W starting costs and derived a cost incluidng interest but not inflation or O&M of $330 million, up 24% from the town official's estimate of $266 million in February, 2010. Although the town official did include a slide in his presentation showing 3% as an inflation factor, he did not take inflation into account in developing his estimate of taxpayer cost in debt service charges over the 50 year financing period.

8. With other Cape towns and the county now looking to cost-saving and environmentally preferable alternatives, Chatham taxpayers no doubt will also be interested in finding out how much can be saved on their property taxes. Clearly, the county has concluded that decentralized/cluster systems can do just as good a job of nitrogen removal as the best centralized systems (as has the EPA). Their new approach includes some centralized sewering and some cluster systems and some onsite systems.

Use of other innovative technologies can increase savings and even do a superior job of nitrogen removal with far less community disruption in a much shorter time period. And more good news is that Stearns & Wheler (now a unit of Australian-based conglomerate GHD) has just recently confirmed that it supports the position expressed by Director of Health and Environment Duncanson and the former town manager that there will be no adverse operational or financial effects if the expansion of the centralized sewer is limited to that which was authorized by the May 11, 2009 vote on Article 14. This means that in reworking the wastewater plan pursuant to the engineering principle of adaptive management the town has complete flexibility to redesign for a less costly and environmentally better result.

The recent forum in Orleans detailed why savings can be achieved in a more environmentally friendly manner. It was open to all residents of the Cape. Links to the presentations will be posted.

ORLEANS DECENTRALIZED SMALL PIPE WORKSHOP ORLEANS.pdf