Centralized Sewer - White Elephant: 2011 Archives

The Cape Cod Times reported today (August 8, 2011) that new money for sewer work on the Cape may not be forthcoming from Washington. Indeed, there may be even less money for low cost wastewater loans because halting the funding of those programs is on the table.

Congressman Keating will try to get money added and to prevent cuts in wastewater loan funding.

At the press conference Eastham administrator Sheila Vanderhoef reminded those assembled that before money from whatever source is spent on tackling the so-called excess nitrogen problem citizens must be satisfied that the science dictating what they should do is sound."It's not delay for delay's sake," she said.

Citizens across the Cape are trying to obtain $650,000 in funding for the National Academy of Sciences to conduct an independent peer review and analysis of the science and methodology behind the recommendations for curtailing septic nitrogen flows. Whie Barnstable County has offered to conduct such a review, its personnel has been so involved in the development of the program that its independence is seen as compromised by some. There is so many billions of dollars at stake nothing less than an impartial review is needed.

To put the $650,000 in perspective, that investment could save billions.

For the Cape Cod Times report, click here.

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

The folly of chasing federal money may catch up with Chatham big time. Despite warnings from Chatham Concerned Taxpayers (CCT) about launching a massive sewer project in the middle of a deep recession, town officials roared ahead anyway, claiming federal stimulus money made it worth doing.

Now the Cape Cod Times reports there is no more federal stimulus money and even cheap loan money from the state may be in short supply.

Chatham Concerned Taxpayers also had urged Chatham town officials to consider less expensive and environmentally preferable alternatives to centralized sewering (e.g., cluster systems and permeable reactive barriers) that could save Chatham taxpayers tens if not hundreds of millions of dollars. These calls were rejected.

In addition, CCT had urged town officials to join with the nine other Cape towns in getting a competent third party review of the state's methodology, but they refused to do that.

A big problem with rushing ahead as Chatham has done is that there is still considerable doubt about the state's recommendations for what has to be done to ensure Cape Cod bay waters are healthy. Nine Cape towns (but not Chatham) are seeking a peer review by the National Academy of Sciences of the state proposed methodology and whether it will in fact make the improvements in Cape waters it is claimed it will do.

Ironically, neither the county, the state nor the federal government wants to put up the $600,000 for the peer review while they are insisting Cape towns spend eight to ten billions on centralized sewering that no one knows will do the job.

Yet Chatham town officials went ahead to build a brand new, completely separate, gigantic wastewater treatment plant right now -- to be completed next year -- that will only work right if thousands more properties are connected than are connected now. And they didn't tell told town meeting voters that's what they were going to do.

Town officials should have gradually enlarged the existing treatment plant as needed to service properties as they were added to the sewer system over 20 years. In fact, in the Warrant for that vote, they had told town meeting voters that's what they were going to do.

The plan as stated was to go back to town meeting every few years for more money to build out the system. At each stage town voters could decide to stop altogether or to shift to integrating alternatives that would be less expensive and just as good if not better as technology improved. "Adaptive management" was to be the watchword.

However, by building the huge new treatment plant upfront, it appears that "adaptive management" will be largely foreclosed and subsequent town meeting votes merely rubber stamps. In a letter to the state Secretary of Energy and Environmental Affairs dated February 16, 2010, Chatham's director of Health and the Environment Robert Duncanson told the Secretary that Chatham had "committed" to funding the full 20-year centralized sewer plan by their unknowing authorization of the immediate construction of the mega treatment plant at its May, 2009 town meeting.

Nothing in the Warrant for that meeting suggested that taxpayers were being locked into the 20-year spending plan by a vote to enlarge and upgrade the treatment plant while adding a few hundred properties to the existing system and updating the connector piping from downtown to the existing treatment plant.

Now it appears we're stuck.

We will have a gigantic overbuilt treatment plant and only property taxes to pay for whatever sewering lies ahead.

While town officials claim the total cost is "only" $266 million after stimulus savings, that number ignores inflationary costs over 20 or more years of construction and assumes 2% money from the state for 30-year loans that just won't be available. A more realistic estimate is over $400 million, actually well over half a billion dollars for property owners when all costs (e.g., connections, annual fees) are taken into account. If the town has to fall back on its own bonding capacity instead of state loans the total cost would be much higher.

Will Chatham wind up with a white elephant of a gigantic treatment plant on its hands for which $40 million of taxpayer money has been spent? The few hundred properties that are being added to the existing system now could easily be handled by the existing wastewater treatment plant.

This is a huge mess. Unfortunately, there's more.

The location of the new mega treatment plant and the existing treatment plant are at an elevation above Cockle Cove Creek. The plan is to increase the flow of treated effluent from the treatment plant(s) from the present 100,000-150,000 gallons a day to 2-3 million gallons a day. But can Cockle Cove Creek and its adjacent marsh handle such an increase? In 2009 Forbes Magazine called Cockle Cove Creek the fourth most polluted beach in America!

Is that pollution draining down from the treatment plant site? Citizens are demanding that a hydrogeological study be done before any more effluent is pumped into Cockle Cove Creek. They are charging that engineers working for Chatham did not adequately evaluate the feasibility of the site for a massive treatment plant, but just concluded it was the only place to put it and figuratively crossed their fingers. No one knows what a new study will reveal. Increasing effluent flow 20-fold into an already polluted creek doesn't sound like a sound environmental plan.

Maybe Chatham should just stop right now on its sewer construction. It has the right under its construction contracts to do so.

What should be done?

Chatham should join the other nine Cape towns in demanding a peer review of the state's methodology for improving coastal bay waters. It's better for ten towns to spend $600,000 now than to be forced into spending $8-$10 billion needlessly.

Chatham should cooperate in an objective scientific review of the hydrogeology of the Cockle Cove Creek site for its appropriateness for a 20-fold increase in effluent flow.

With huge costs ahead and no financial aid in sight, Chatham should update its review of available alternative technology that is less expensive and environmentally better. A benefit of alternatives such as cluster systems and permeable reactive barriers is that treated effluent need not all be dumped in one place such as Cockle Cove Creek. It can be dispersed widely throughout the town without adding to the pollution of Cockle Cove Creek -- which should be cleaned up, not polluted further.

Chatham taxpayers are facing staggering costs. The biggest by far is the centralized sewer, which is the most expensive way to address the problem the state says needs to be addressed if Chatham’s bays are going to stay healthy.

Let’s find out if the state’s plan is the right one. If it is, let’s correct the problem in the most cost-effective and environmentally sound way, which is not centralized sewering. Even the EPA says that use of clusters can save 25% to 50% over the cost of a centralized sewer.

Saving $100 million or more of property taxpayer dollars with alternatives to centralized sewering makes sense. It’s not too late to do that. It will take courage for town officials to adjust to these new financial realities and change course. This they should do.