PLANNING FOR RESULTS AND SAVINGS OR A PUBLIC-PRIVATE PARTNERSHIP THAT WORKED
Abstract:Sussex County, Delaware, is located in the mid-Atlantic Region of the country. It is within 3 hours of three major cities, Washington D.C., Baltimore, and Philadelphia, and within 7 hours of Pittsburgh, and New York City. Its rural character and 20 miles of Atlantic Ocean beaches make it a preferred destination for vacationers, while its low property taxes and the absence of a sales tax make it a prime location for retirement. Due to the rural nature of the area, it is largely undeveloped, with large tracts of land available for development within minutes of the beaches. This has led to rapid growth in the coastal area during the last decade.
The Sussex County Council is responsible for providing public wastewater service to the unincorporated areas of the County. Sussex County's first sewer systems were constructed in the mid-1970s to eliminate failing septic systems in beach communities. In 1979, the County's wastewater systems served approximately 5,000 customers. Today Sussex County serves over 55,000 customers. The Sussex County Engineering Department is charged with planning, designing and constructing the necessary wastewater infrastructure.
In 1990, the County Council approved the first regional wastewater planning study for the coastal area called the South Coastal Area Planning Study (SCAPS). The SCAPS report considered the future needs of the area by laying out a proposed regional transmission system. In 1997, the Sussex County Council engaged the services of Whitman, Requardt and Associates (WR&A) to perform all engineering services required in the South Coastal area. This included updating the 1990 plan and assisting with its implementation.
However, Sussex County has found it challenging to bring affordable wastewater service to existing homeowners. Grants are limited or unavailable, and construction costs have escalated. User charge estimates have exceeded 1200 per year for a home in some new service areas.
The County Council has taken the approach that new growth should pay for itself and should benefit existing homeowners and has directed the Engineering Department to implement administrative procedures to fulfill these goals. As a result, the County initially implemented System Connection Charges (i.e. impact fees) and required developers to construct and pay for all infrastructure necessary to serve their development. This addressed most of the in-fill development occurring in the 1980s within the existing districts along the coast. However, development began to move westward in the late 1990s, and developers were requesting that pipelines be extended into previously unserved areas. This offered opportunities for the Engineering Department to partner with developers on the installation of regional infrastructure.
There were five (5) critical items necessary to make public-private regional projects work:
A valid regional planning document.
The legal authority to require oversizing of infrastructure.
Provisions for proper design, inspection, and contract administration.
A legal mechanism to identify obligations and responsibilities.
A mechanism to provide compensation for oversizing costs.
The SCAPS became the basis for coordinating the expansion of the wastewater system to serve these new areas and provide wastewater service for the existing development in the area. The County's ordinances provided the basis for requiring infrastructure oversizing.
To assure that the facilities were constructed in accordance with the regional plans, the County engaged WR&A's services for the inspection and contract administration for the sewer extensions. The Developer is permitted to participate through the entire design process. However, upon final completion of the plans, the Developer is responsible for bidding, selecting, and paying for the construction of the facilities. All construction is inspected by County personnel. This process allows the Developer to participate, while allowing the County to control all project oversight.
The Engineering Department has developed a standard escrow agreement to set aside funds to cover WR&A's costs and define the roles and responsibilities for all participants. It is a legal document that is approved by the County Council, executed by the developer, and administered by the Engineering Department. The developer deposits funds to the escrow account at the beginning of the design phase of the project and makes a second deposit to cover inspection costs prior to initiating construction. Any unused funds remaining in the escrow agreement at the end of the project are refunded to the developer.
To compensate developers for oversizing facilities or installing facilities that do not directly benefit their project, they are granted a credit against a portion of the impact fee required for each home or unit to be built. A simple calculation is performed to compare the cost of serving only their proposed project against the cost of building the specified facilities. The difference is then applied as the fees are paid.
This process was followed for an on-going project called the Millville Expansion. This project was approved in 2003 at an estimated total project cost of 33 million. A number of private development projects were planned within the expansion area. Construction contracts were identified, which corresponded to the proposed projects. Developers have completed or are currently constructing 9.6 million of the 13 million expected in developer contributions.
Document Type: Research Article
Publication date: January 1, 2007
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