Bethany town council chooses Collins Street as site for water tower

On Saturday, Sept. 8, Bethany Beach citizens will turn out to vote. But it won’t just be for the annual town council elections, or the 2012 presidential election. Bethany voters will also have their voices heard about proposed improvements to the town’s water supply, as they vote in a referendum on whether to approve borrowing up to $3.7 million to construct a new water tower at the Collins Street water plant.

At a pair of meetings on June 29, Town Manager Cliff Graviet once again laid out the reasons why the new water tower is needed, citing problems with carcinogenic trihalomethanes appearing in the Town’s water as it ages.

Aging water has been a problem for the Town since construction of the 1-million-gallon water standpipe at the Collins Street site in 1980, he noted, when the design chosen for water storage apparently failed to take into account that 70 to 75 percent of that water would not circulate during much of the year, due to significantly lesser usage outside the summer season.

In 2005, the Town was cited by the EPA for excess trihalomethanes in its water, and it has endeavored ever since to deal with the problem, altering its treatment procedures and even flushing millions of gallons of otherwise usable water out of the system each year to rid it of the aging water and freshen it with new water from the aquifer.

“We can’t decrease the amount of water in the standpipe, because then we can’t deliver the water to the community at adequate pressure,” Graviet explained, noting the uniqueness of a standpipe having been constructed in an area that is essentially flat.

“Ideally, when it was constructed in 1980, it would have been a hydrosphere,” he pointed out, referencing the nearby hydrosphere used for storage in the Sussex Shores water system. With a hydrosphere, the amount of water being stored can easily be regulated, Graviet emphasized, and the Town would resolve its problems with construction of a 500,000-gallon hydrosphere.

“The other alternatives don’t address the issues of risk management or redundancy,” he noted of other potential designs that have been considered. “The engineer has said the way to solve the problem is with a new water tower.”

Though the town council has long accepted that a new tower was needed, controversy over the location of the tower has not only brought questions about where it should be located but about whether it is really needed.

Anthony Chiffolo, who owns a home on Collins Street near the proposed site for the tower, asked such questions at one of the two meetings held on the issue on June 29.

“I have not seen or heard anything explaining what the need for a new water tower is,” he told the council. “I just saw the new water report, and everything is fine. If there is a need for a new water tower, I’m not seeing it. Right now, I don’t understand why we would spend $3.6 million or $2.5 million for a new water tower.”

While the Town’s 2011 water report does not indicate any actual violations of water safety standards, Graviet has previously reported extensive efforts to ensure that is the case, including the semi-annual flushing of the water system, which costs the Town money and takes fresh water out of the aquifer that otherwise could remain there for future use.

Resident David Limeroff, who lives on Wellington Parkway and has a background in hydrodynamics, said that, if water pressure at the tank is the problem, the focus should be on having adequate supply pumps, rather than the size of the tank. Alternately, he said, if there is a problem with pressure at the other end of the system, then the distribution system may be inadequate. In that case, he said, “then the cost of the new tower is just a downpayment on future needed upgrades.”

But Graviet said Limeroff’s premise was incorrect.

“None of the issues driving interest in a new tank have had anything to do with water pressure,” Graviet said. “The standpipe holds a million gallons. That’s much too large. We have issues with treatment and water age. We need an elevated hydrosphere of 500,000 gallons. We know an error was made at the point it was decided to do a standpipe.”

That mistake having been made, Graviet said all of the half-dozen engineers’ recommendations for solving the problem that have been made since 2005 have been to construct an elevated water storage tower.

New tower site aims to reduce impacts on trees, neighbors

Having addressed the reasons why the new tower is needed, Graviet on June 29 also addressed the concerns about the proposed location for that tower. He noted that the Town has been looking at the issue of location for at least three years, evaluating three potential sites: the Collins Street water plant, the Town’s Public Works yard north of town limits on Route 1 and the former Christian Church/Neff property at the intersection of Routes 1 and 26.

“They were asked to evaluate it again this year,” he noted of the engineers, “and they recommended we consider as the prime option the Collins Street plant. The water department director concurs. … The Town’s fiscal director does also.”

Regarding the location, Graviet noted that the primary driver for the decision has always been the cost of construction. Constructing the tower at the public works facility would cost an estimated $5.4 million. Construction at the Church/Neff property is estimated to cost $3.96 million. Constructing the tower at the Collins Street site would run approximately $2.6 million.

“It continues to be the staff’s recommendation that Collins Street be considered as the location for construction of the new water tower,” Graviet emphasized.

He acknowledged concerns expressed by opponents of the location, including those living near the site.

“They are concerned with the possible loss of trees and the proximity to homes — especially on the south side,” he said, noting that the 16-home Beach Hollow community borders on that side of the property.

To try to address those concerns, Graviet said the engineers had recently looked at a different site on the Collins Street property, to the east side, between an existing yard and the South Coastal Library, where construction of the tower would not result in the significant loss of trees. He said they had also looked to move the tower farther from the south border of the property, where retention ponds are currently located.

Graviet said engineers had aimed to reduce impacts on Beach Hollow by moving the tower much closer to the existing standpipe than the location presented to the public on June 9.

“With that design comes redesign of the existing retention ponds,” he noted. “It moves it farther from the property line and closer to the existing clarifying pond.”

Graviet said the second location considered places the tower to the east of the plant’s clarifying pond, where it would not disturb existing trees in the wooded portion of the property. It would be located outside the existing fence, in an area that is sparsely wooded, and construction would be mobilized from areas of the property that would allow the trees to remain on that portion of the property.

The town manager noted that the Town had recently received a letter from the Beach Hollow homeowners’ association, stating that, while it was not their preference for the tower to be constructed at Collins Street, if it was placed there, “We would encourage the council to vote for a tower … in the area closest to the existing standpipe.”

Acknowledging that the letter did not endorse the Collins Street location, Graviet said it nonetheless “goes a long way in helping us with the selection of Collins.”

Graviet requested the council consider choosing the Collins Street location and locate the new water tower at the proposed location closest to the existing standpipe. He also suggested they move to develop a stormwater plan for the entire property that would be implemented “as soon as possible” after construction of the tower, as well as work by an architect and engineer to reduce the noise from the water plant’s aerator.

Additionally, he suggested the council plan to replace the existing “unsightly chainlink” fence, move the retention ponds to a location where they would be less obtrusive and farther from the parcel’s property lines and install a “green barrier” at the fence line to block views of the plant. He recommended the formation of a “working group” of citizens who would help select the new fencing and design the green barrier, and who would be kept apprised “of every element of the construction as it moves forward.”

The council voted 6-0 to follow Graviet’s recommendations for the location and related projects. Councilwoman Carol Olmstead abstained from the vote, citing a conflict of interest as a resident of Beach Hollow and president of the community’s HOA.

“We would prefer it to be somewhere else,” she emphasized. “But because of the concerns of the Town and the practicality of the location … it’s perfectly understandable.” She again requested the council choose the location nearest standpipe, as far away from the trees as possible.

Town could reduce sinking fund fee or prepay loan

At the subsequent public hearing on borrowing up to $3.7 million for the water tower project, Graviet again emphasized that the Collins Street location is the least expensive of the options available to the town, at $2.6 million for construction of the tower at the water plant site, plus up to $1.1 million for related work on the site.

The Town will ask voters on Sept. 8 to vote on whether to approve borrowing the funding from the State’s revolving loan fund, which generally offers municipalities 20-year loans at roughly 65 percent less interest than rates otherwise available. As part of the loan application process, a positive vote in the referendum would affirm the Town’s commitment to the loan. The interest rate will then be locked in, at a maximum of 3 percent. Graviet noted, however, that State officials have assured him the rate would most likely be 2.5 percent over 20 years.

Funding to repay the loan would come from the Town’s sinking fund, which is funded by assessments paid by property owners via their tax bills each May. Each property is currently assessed based on a minimum 50-foot front footage, at $1.07 per front foot. Though the Town would be borrowing money, that cost to taxpayers would stay the same, or it could actually drop, based on what town officials decide in the coming months.

With $1.1 million already set aside for the project, Graviet said that if the Town does borrow $2.6 million for construction of the new tower at 3 percent interest for over a 20-year term, the Town would be paying $3.52 million over the life of the loan, at $174,000 per year.

Combined with the retirement in 2014 of existing debt from a 1989 loan of $3.6 million — which would be retired prior to payment starting on the new loan — that would allow the Town to reduce the sinking fund assessment to 76 per front foot, reducing the sinking fund assessment from $53.50 per property per year, on average, to just $38 per property per year on average.

Alternatively, he said, the Town could leave the sinking fund assessment rate at $1.07 per front foot. That, he emphasized, would allow the Town to pay off the loan in just 13 years, saving it $327,000 over the life of the loan.

Graviet asked the council to put the issue of the payment rate before the Budget & Finance Committee at their July 19 meeting and listen to the committee’s recommendations on how to move forward with the mechanics of the loan.

He also noted on June 29 that, in the near future, all Bethany Beach voters will receive a package of information on the water tower issue and the Town’s intent to borrow up to $3.7 million, as well as one or two postcards to advise all residents of the issues involved and remind them to vote on Sept. 8 in the referendum. Graviet requested the council set another public hearing on the issue — though it is not required by law — to discuss any issues that arrive when citizens receive those mailings.

Councilman Joseph Healy asked Graviet whether the Town should add to the loan amount, by perhaps 10 percent, to cover potential cost overruns. But Graviet said the $1.1 million set aside for relocation of the retention ponds, replacement of fences and addressing stormwater issues should more than cover that, while the $2.6 million accounts for potential cost overruns on the construction of the tower itself.

“What remains can be used to pay down the loan or brought back to the budget committee and council to determine if they want to move it into the general capital fund for the water department or prepay the loan,” he explained.

Resident Pat Neary noted his past experience with a similar loan taken out by the City of Marco Island, Fla., where he also owns a home. He advised the council that he had been told in that case that a 1.5-to-1 ratio of funding to potential cost was “reasonable” and that they should understand the loan’s impacts on the town’s credit rating before deciding exactly how much to borrow and how it should be repaid.

The council did not schedule another public hearing during the June 29 meeting. A formal vote to set the referendum for Sept. 8 is on the council’s agenda for their July 20 meeting at 2 p.m. The Budget & Finance Committee meeting is set for July 19 at 1 p.m.