Old Lyme WPCA Chair Prendergast Talks Funding and the Future of Sound View

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OLD LYME — With the August 13 referendum on funding sewers in Sound View Beach approaching, Water Pollution Control Authority (WPCA) Chairman Richard Prendergast stopped by CT Examiner’s office Tuesday to clarify concerns and answer questions. 

“There’s no certainty of that passing in Old Lyme, the default is to not pass. If you’re from Old Lyme you know that we don’t do things like this too often,” he said. 

The referendum asks whether the town should bond $9.5 million to build sewers in Sound View Beach and Miscellaneous Area B, part of a broader arrangement, partially reimbursed by a 25 percent Clean Water Funds grant, that will cost Sound View property owners about $7.44 million. 

Sound View owners will be assessed a betterment fee of $15,000 or higher and a sewer connection fee of $6,000. Owners will have the option of financing the cost over 20 years at a two percent interest rate. 

“The total construction cost — that’s paid by a connection fee and the betterment assessment fee and that’s where the big money is. The user fee of $430 is an annual fee and that’s the operational cost and that’s never going away,” he said. 

The annual user fee will pay for effluent charges and also maintenance and repairs of the pump house equipment — but the amount could change each year. 

“The reason why that could change is we don’t know what the effluent charges are going to be, it depends on how much we process and get billed for,” he said.

Residents will be individually responsible for a variety of other costs, including decommissioning existing septic systems.

Determining EDUs

Town by town, the method chosen for apportioning costs into Equivalent Dwelling Units, known as EDUs, varies widely, but Prendergast reasoned that the square footage method is the most fair for the types of dwellings in Sound View.

There are three common ways of defining EDUs: by the house, disregarding the size or value; by the frontage along the road; or by the assessed house value. 

“Those are three popular ones but none of those are equitable for us because of the type of buildings we have — and that’s the key thing to say. We’re required to come up with an equitable formula, that’s in the CT statutes — it doesn’t say we have to come up with a popular formula — it says we have to come up with an equitable formula,” Prendergast said. 

The Old Lyme WPCA formula has set one EDU equal to 1,242 square feet, however, no property will pay for less than one EDU, no matter how tiny its square footage. Four is the maximum number of EDUs for a single property. Prendergast said this helps solve the problem of fairness because, for example, it wouldn’t be equitable to charge the same cost to the owner of a 200 square foot house as the owner of a 6,000 square foot house. 

The formula for commercial properties is more complicated as the costs are linked to estimated flow set by the Department of Health. For example, a restaurant is rated at 30 gallons of effluent per day per person, multiplied by 365 days per year. 

“But we don’t operate year round — we know in the winter we’re lucky to have five people in the restaurant — so we look at average flow,” Prendergast said. 

The WPCA will also look at commercial properties’ value assessments compared to the volume of flow. Properties with higher assessed values and high effluent volume will pay more than properties with low assessed values and low volume.

The WPCA decisions can be appealed to the WPCA Appeals Board, he said. 

Financing and growth

Sound View residents will have the option to pay off their loan in a lump sum or over time. According to Prendergast, a common question is whether a homeowner who pays off the loan and then sells the house would get money back if costs are reduced later on. 

“It’s with the property, not with the person. The analogy is if you buy a car and you sell it to someone and there’s a recall and the owner gets the money,” said Prendergast. 

Sound View owners will be limited to the building size previously approved for their properties before sewers were installed, though owners can also apply to the Zoning Commission for variances. Property owners who want to convert buildings for year-round use would also need to get variances for upgrades, such as installing insulation. 

The town is not on the Clean Water Funds’ priority list but once the referendum passes, then the state has assured the town of funding. The state’s signals have been unclear, said Prendergast.

“I felt misled too because the state never notified us that we were not on the list… and they then said it doesn’t matter, your project is small… The state said you have the funding if you pass the referendum, you have to bond for design and construction costs,” Prendergast said. “If we don’t pass the referendum, we’re going to try to get on the priority list and try to preserve our spot for next year and see what happens.” 

Hawk’s Nest

The neighboring beach associations — Miami Beach, Old Colony Beach and Old Lyme Shores — each have a separate WPCA and plan to install sewer systems. 

It is likely that Old Lyme’s Sound View Beach will join the three beach associations to build a pump house that will connect through East Lyme and Waterford to New London’s treatment plant. 

Hawk’s Nest Beach, which is part of the Old Lyme’s WPCA, could join the project later, but for now continues to undergo testing of its groundwater to determine pollution levels. 

If Hawk’s Nest joins later, then its tie-in fees will depend on the depreciation of the pump house equipment, said Prendergast. 

“That would technically lower everyone else’s costs, so their loans can be reduced, but say it happens much later, then the depreciation is lower, the tie-in fee is lower because of the equipment — but (Hawk’s Nest) is obligated for the next one and have to contribute to the next one,” he said. 

Prendergast said a common question is whether property owners in Sound View will end up paying for Hawk’s Nest’s costs. 

“No, Sound View is paying for Sound View. If Hawk’s Nest comes on, they’re going to have some costs themselves and with added volume of Hawk’s Nest, we’re going to have to change the pump station, put new pipe and probably bigger pumps and bigger controllers and they’re going to pay that amount themselves,” Prendergast said. 

A State order

Town officials adopted a proactive approach to developing a sewage solution for the shoreline, proposing and later abandoning a community septic system, and also rejecting as infeasible a proposal for a sewage treatment plant outflowing into the Connecticut River, and are now obligated under an administrative order by the state to install sewers.

“We have an administrative order — we have the threat of the state forcing us to do it and if we don’t do it, they have the ability to fine us until we reconsider. They could choose to do it, they could choose not to do it, so do we gamble?” Prendergast said. “We could also be forced to take away everyone’s Certificate of Occupancy, saying that septic systems are not complying.”

A number of other litigation issues could also arise if the town fails to move forward, he said. 

WPCA’s financial structure

The WPCA has separate funding so that the town can’t use the money for other projects. Old Lyme’s finance director, Nicole Stajduhar, will manage the fund.

“The WPCA is having the town manage the fund and we’re getting reports on it,” said Prendergast. “That way we got Board of Finance approval, because they don’t want us to mismanage the funds. The Board of Finance doesn’t want black mark on the town. We’re having complete transparency, — we’ll get report and the board will get the same report.”

The WPCA will not need approval from the Board of Finance to disperse funds that come in from the Sound View project, but funds that the town appropriates to the WPCA will have oversight from the Board of Finance.

Technically the WPCA could use monies from Sound View to fund other WPCA projects in town, but Prendergast said the plan was to keep the money separate. 

“With the WPCA right now, we keep the bucket separate, so anything that is needed somewhere else we’d go to the town and say we need money,” he said. “For a study for Rogers Lake or something else, the town would appropriate that funding, we wouldn’t take money from department to another.”

A study for Rogers Lake would be a public service that benefits everyone in the town “because you’re studying part of the town, you’re not benefiting those users yet,” Prendergast said. “You’re reacting to government requirements or a resident’s requirements to study a situation and in a study initially you don’t know who’s in and who’s out, so you can’t say these are the only people who benefit.” 

Prendergast also said the impression that Old Lyme’s WPCA isn’t “official” yet is incorrect. 

“The WPCA is fully formed, according to legal statues, we have the right to do a benefit assessment,” he said. 

Timing and the future

“If we get the referendum, then we do design phase, which takes 6 months —  but the design is already done — and we submit the design to the state,” he said. 

Once the design is complete, the project moves into the construction phase. Avoiding construction during the summer season pushes the project into 2022 or 2023, he said. 

Looking ahead, Prendergast predicted the Sound Beach community would prosper once the sewage issue is resolved.

“Fifteen years from now I think the communities will have forgotten all about the cost, they won’t even think about it in any way, or think about septics systems failing, and not worrying about getting kicked out of their property because their C.O. [certificate of occupancy] is taken away, not worrying about

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