Opinion Survey Question For Business Area Sewer Approved at Rico Board of Trustees April Meeting
Town of Rico will publish an opinion survey which will include a community-wide property tax for business area-only sewer/wastewater question. The Rico Board of Trustees approved this and other property tax proposal survey questions at its regular monthly meeting April 21, 2021.
Inclusion of a community-wide sewer tax question in the survey reverses Rico Trustees’ March 2021 decision to not propose a tax increase on all properties within Rico Town limits to fund construction of a sewer and wastewater treatment for business-area properties. No explanation for the change in Trustees’ sewer taxation philosophy was given during discussion of this and other proposed opinion survey questions.
Town is also exploring an option to create a special district encompassing only the business area which would restrict the tax to properties within the district. This option was discussed, but was not included in the draft list of opinion survey tax proposal questions.
Rico voters rejected a $3.47 million community-wide property tax business area-only conventional sewer/wastewater proposal at the November 5, 2019 election. The total cost included financing expense. System cost was $3 million.
The Rico Sewer Committee’s 2021 cost estimate for a Septic Tank Effluent Pumping (STEP) system is $3,350,392, compared to $5,163,375 for a conventional system. The STEP system is the basis for Town’s proposed sewer tax.
A draft of the proposed survey questions was included in the April 2021 Trustees Meeting Packet. Sewer-related questions are reproduced below. Trustees submitted written comments or proposed edits to Town Manager Kari Distefano prior to to the meeting, which may affect the final text of the survey questions.
Question 7 The Rico sewer committee presented options for the construction of a central wastewater treatment system. One of the options they presented, called a Septic Tank Effluent Pumping (STEP) system, was found to be less expensive than the traditional system. Based on an estimated tax increase of 29.51 mills or 39.9%, would you be willing to support the construction of a central sewer system to serve the commercial core of Rico that could be expanded in the future? __ Yes __No
Question 7b If grant funding reduced the cost of the project to require a lower estimated tax increase of 24.9 mills or 33.7%, would you be willing to support the construction of an STEP sewer system that would serve the commercial core of Rico? __ Yes __No
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A note in the packet explains that costs of sewer and other projects described in the survey are estimates:
Cost estimates for improvements are rough. Final engineering and construction bids would be required for more accurate numbers.A table of estimated tax sewer project increases for commercial and residential properties is included in the Packet.
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Tables of estimated tax sewer increases for commercial and residential properties are included in the Packet.
At $250,000 residential valuation and a 29.51 mills property tax increase, the annual sewer property tax is $527.49, or $43.96 monthly, for which no service is delivered to the residential taxpayer by Town of Rico. This equivalent monthly sewer charge is higher than the Town of Rico monthly residential water service charge of $38.00.
Rico’s 2019 proposed sewer/wastewater property tax mill levy increase was based on a 20-year loan obtained by Town of Rico to pay for system construction. The 2021 example above with $527.49 annual property tax would cost the taxpayer $10,549.80 total for the 20-year period.
What about the existing Rico sewer tax?
Trustees did not discuss the existing Rico 3.939 mill sewer property tax, its continuation or repeal, or use of future revenues to pay either sewer financing costs or operating expenses. Town has collected this tax for about 20 years. Town’s 2021 budget predicts Sewer Fund revenues will be $24,945 this year
Also absent from discussion was the Sewer Fund current reserve and how this might be spent. The 2021 year-end Sewer Fund reserve is predicted to be $201,623.
Rico Master Plan for sewer and wastewater
The Rico Regional Master Plan adopted August 18, 2004, states that Rico voters approved a property tax to develop a wastewater treatment system in November 2000. Item 4 in the Objectives section (below) states intent to serve the entire town.
IV. Public Facilities and Services - Waste Water Treatment
In November of 2000 the Rico voters approved a 3.939 mill property tax increase to be dedicated for the construction, design, and operation of a waste water treatment system. The potential for a sewer system has raised a broad range of growth management concerns for the Rico community. A sewer system is generally considered to enable development in the commercial core and is anticipated to stimulate an increase in the rate of growth.
- Discontinue all individual sewage disposal systems that do not comply with the State Individual Sewage Disposal Act.
- Avoid contamination of the Dolores River or the human environment by inadequately treated waste water.
- Construct a cost effective, centralized waste water treatment system that meets or exceeds state and federal water quality discharge permit limitation requirements.
- Adopt a waste water treatment plan that can serve the entire Town of Rico and is capable of expanding service to future annexation developments as envisioned in the Rico Regional Master Plan.
- Seek state and federal grant funding to reduce the per household cost of a centralized waste water treatment system.
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Items 4 and 5 of the Policies section refer to commercial core and properties near the Dolores River.
- Finalize a phased centralized waste water treatment system plan to serve the Town and future annexation development areas as designated in the Rico Regional Master Plan.
- Seek to obtain state and federal grant funding and potential private developer financial contributions in order to provide sewer service at a per household cost that is affordable to our community and comparable to similarly situated communities.
- Acquire the site for a waste water treatment plant and any easements or other property acquisitions that are necessary for town-wide collection lines in order to preserve the opportunity for constructing a centralized waste water treatment system in the future if the financing or community support is not adequate to pursue the project in the near future.
- Pursue a centralized waste water treatment project to serve the commercial core in order to enable development of commercial properties and promote the development of a local economy.
- Connect all properties to the sewer system that are near the Dolores River or close to ground water to minimize potential contamination of the Dolores River.
- Construct a waste water treatment system that discharges a high quality effluent and anticipates compliance with potentially more stringent discharge regulations in the future.
- Identify and plan for future maximum development potential by coordinating zoning, land use regulations, intergovernmental agreements with the County, and other public facilities and services, with the total capacity and service area of a sewer system.