July 18, 2008
Vote AIDS Sewage Projects: Board OKs Piru, El Rio Loan Extensions
By Tony Biasotti, Ventura County Star, Calif.
Jul. 18--The California State Water Board voted this week to extend the loans that will pay for new sewage systems in El Rio and Piru, giving the residents a 25 percent cut in their expected monthly bills.
The U.S. Environmental Protection Agency still has to approve the plan, because the loans are funded by both the federal and state governments. If the EPA says yes, then the El Rio and Piru sewage projects will be funded with 30-year loans, rather than the standard 20-year loans.
"The length of the loan is very important," county Supervisor John Flynn, who represents El Rio, said Thursday. "It's like borrowing money for a house. If you borrow it over 30 years instead of 20, your payments will be much lower."
Flynn, who was in Sacramento on Tuesday for the State Water Board's vote, said he has asked the board to also consider no-interest loans, which would bring sewage bills even lower.
The interest rate is set for now at half of whatever the state is paying for general obligation bonds. The rate for the state's most recent offering of 30-year general obligation bonds was 5.3 percent.
The 30-year-loan program applies to small, poor communities -- defined as those with fewer than 20,000 residents and a median income that's less than 80 percent of the state median -- and both El Rio and Piru qualify, Flynn said. The money will be loaned to the county districts that provide sewage service, and the funds will be paid back through residents' monthly bills.
Flynn said he expects the EPA to sign off on the program, with some limits on how much money can be loaned.
"Under the Clean Water Act, they're in favor of getting this done, so they're going to be sensitive to it," Flynn said.
El Rio is one of the last urbanized areas in the county still on septic tanks. The state is threatening to levy millions of dollars in fines if the area's homes and businesses are not connected to sewers, because septic tanks can pollute groundwater in the Oxnard Plain.
Connecting the area to Oxnard's sewage system will cost about $38 million, with about half of that covered by state and federal grants that the county has secured so far. Still, the monthly sewage bills for residents would be about $127 with 20-year loans, said Reddy Pakala, the county's director of water and sanitation.
Flynn said he hopes that with a 30-year term, no-interest loans and more grants, the total will eventually come down to about $50 a month.
Dennis Rodriguez, a homeowner in El Rio, said he understands the need for sewers but thinks the costs as they stand today are "a little ridiculous."
"One hundred and twenty-five dollars a month -- that's almost like the association fees in a condo," he said. "Fifty dollars would be a lot more reasonable."
Rodriguez expects to also spend about $15,000 to connect his home to the sewer. Property owners must pay for that work themselves, because it happens on their private property.
Cost estimates for individual property owners run from a few thousand dollars to as much as $40,000, depending on the location of the property, the length of the trench needed, and the presence of trees or other obstacles.
The county provides loans and subsidies to residents who can't afford to hook up to the sewage system, Flynn said.
The El Rio project is under way now and has been divided into seven phases, with the last phase expected to conclude in 2011, Pakala said. Residents will start paying the new rates in mid-2009, he said.
In Piru, the county must replace its sewage treatment plant or face state fines. The new plant will cost about $10 million and sewage rates there are expected to jump from $40 a month to more than $100, without factoring in the new 30-year loans.
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Copyright (c) 2008, Ventura County Star, Calif.
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