Sussex County Delaware sewer district presentation to the City of Rehoboth Beach Commissioners November 26, 2018

1. December 11, 2018
Sussex County Sewer District
Presentation
to the
City of Rehoboth Beach Commissioners
November 26th , 2018

2. BACKGROUND
• In 2002 the City of Rehoboth Beach signed an Administrative Order of Consent
with the State of Delaware mandating the removal of the treatment plant
discharge from the Lewes-Rehoboth Canal in accordance with the Inland Bays
TMDL by 2018.
• The City secured funding through the State Revolving Fund for the projects
associated with the outfall and the voters passed an associated referendum for
$52.5 million.
• In August of 2017 the City Commissioners award three (3) outfall related projects
and the first of four phases of the treatment plant improvement project totaling
approximately $41.5 million.
• In August of 2017 the City Commissioners and the County Council approved
the "Agreement for Wastewater and Biosolids Services" which limits the County's
facility use and debt service obligation to 50%.
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3. BACKGROUND, CONT.
• In June of 2018 the outfall was operational and the treatment plant discharge
removed from the Canal.
• In August of 2018 Sussex County offered and the City Commissioners accepted an
alternate construction and financing approach for phase 2 of the treatment plant
upgrades estimated at $6 million.
• In November of 2018 the Abrahams Group Rate Consultants
presented the Commissioners with an anticipated FY2020 rate scenario of $934
per year for the average user.
• The annual rate captures capital projects through phase 3 of the treatment
plant upgrades but leaves out phase 4. If phase 4 is integrated as a State Revolving
Fund project the annual would rise to approximately $1,110 for the average user.
• Subsequently the Commissioners requested Sussex County to investigate an
alternate scenario.
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4. CURRENT STATUS
• Sussex County in conjunction with GHD, the municipal engineering consultants, developed an
alternate scenario for phases 3 & 4 of the treatment plant upgrade project.
• Under the alternate scenario future treatment plant upgrade project phases 3 & 4 estimated
at $18.4 million as well as any transmission system upgrades would funded by the County.
• County funded projects neither require additional City referenda nor loans through the State
Revolving Fund triggering wage rates.
• Sussex County would assume all municipal sewer related assets, liabilities and legacy
obligations after district expansion. The biggest single asset being the treatment plant.
• Assets no longer needed would be liquidated and proceeds will be contributed toward debt
reduction. If the treatment plant property contains land not needed for expansion it could be
considered surplus and sold under this scenario.
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5. CURRENT STATUS CONT.
• Sussex County has a “uniform” service charge for all its accounts. It covers the O&M expense
in addition to the system wide transmission and treatment debt service not paid for by Sewer
Connection Charges.
• Future treatment & transmission expansion projects would be included assuring future “rate
stability”. Historically annual user charge increases have been +/-2%.
• Sussex County would directly invoice all sewer customers on an Equivalent Dwelling
Unit (EDU) basis NOT on a metered rate.
• The City Finance Director in cooperation with the County Finance Director estimated the
number of EDUs to be approximately 3,250 within the City limits and 305 within North
Shores.
• The creation of a Sussex Sewer District Area will not change the underlying land use, the
respective Comprehensive Plans and the annexation areas will remain in effect.
• Sussex County operates four (4) wastewater treatment plants with numerous licensed
operators, electricians and SCADA technicians allowing staffing options between facilities as
needed.
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6. SEWER DISTRICT ESTIMATED COSTS
• The current Sussex County Service Charge is $294/year per Equivalent Dwelling
Unit (house, condominium, apartment, etc.); billed quarterly to all customers.
• Commercial customers are assessed on a fixture unit or historic flow basis establishing
the base line EDU number per account used in billing.
• Estimated annual household cost:
 $294 – current (FY 2019) system wide User Charge per EDU
 $392 – ext. debt service incl. refinanced SRF debt & phase 2
 $14 – debt service for treatment plant upgrades phases 3 &4
 $8 – estimated User Charge increase by FY 2023
 Total expected for FY 2020: $687/year per EDU
 Total expected by FY 2023: $709/year per EDU
• Sussex County’s Sewer Connection Charge (impact fee) in FY 2019 is $6,360 which, by
Code, is used to fund treatment and transmission upgrade projects.
• The current sewer impact fee in the City of Rehoboth Beach is $2,346 per EDU and
would have to be adjusted in phases to match the County's charge.
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7. NEXT STEPS
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1. City Commissioners may request the expansion of the Sussex County Uniform Sewer
District to include the City's service territory pursuant to Title 9 Del. Code § 6501.
2. City may want to negotiate an interim operations agreement with Sussex County pursuant
to Title 9 Del. Code § 6702.
3. Only after receipt of the official request from the City Commissioners can Sussex County
Council establish the Rehoboth Beach Area of the Unified Sewer District with a boundary
matching the municipal sewer service areas.
4. After the Unified Sewer District expansion approval by the Sussex County Council, the
Engineering Department would submit a Preliminary Engineering Report in cooperation
with GHD for the Phase 3 and 4 of the Treatment Plant Upgrades.

8. QUESTIONS
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