Board Recommendation for County Water Thursday, December 28, 2023

WHY WE NEED TO CHANGE…
Aging infrastructure regularly fails, we need reliable, consistent water, the current
system dumps rust water into the river that is not in compliance with EPA
standards, and we have no fire hydrants in the community.

Board Recommendation: County Water
After multiple meetings and consulting Sharp water and the County, the Board has
examined the pro and cons of several options and determined that our best
course of action is to accept the County’s USDA application to finance
construction of a connection to a County Water system to replace our well.

• New 8” main will replace the current 2” piping throughout the community
• Each house will be metered and billed separately for water
• 7 fire hydrants will be installed
• Existing well will be abandoned
• Our water source and all new piping will be owned and maintained by the County
• Water quality will be constantly monitored and we can always be assured of high-quality, reliable water.
• The water supply and all the public-side water piping will be the responsibility of the County to maintain and repair forever; the community will be relieved of the responsibility of maintaining and repairing the water system.
• In the unlikely event of an issue with the new system, the County has repair and maintenance crews on a 24/7 basis. We simply make the call.
• Cost of well and water supply will no longer be part of HOA dues. Each individual home will be billed by County and paid directly to County.
• Newly required HOA reserve will not include water equipment once we transfer to County system.
• The new larger water mains will be virtually maintenance free and have a proven lifespan of well over 50 years, we can be worry free about future costs of repairing/replacing the water piping throughout the community.
• Separate meters for each household allows for more accountability for payment.
• 7 new fire hydrants will greatly enhance fire protection as well as reduce home insurance costs.
• Water volume and pressure will be increased for better reliability and consistency.
• Early 2020, a vote was taken by the community to explore the option of having the County supply a new water system.
• ​The County commissioned a “Preliminary Engineering Report” (PER) that was completed in late 2021 by an Engineering firm in Salisbury. This PER laid out 4-5 different routes for a new water main, made certain Ocean Pines has capacity to supply St Martins, described the need for fire protection, detailed the dilapidated condition of our well, estimated costs for construction, permitting, contingencies, inspection, and conducted an initial environmental impact study. This PER was mandatory for the County to seek grants and loans from the USDA before design and construction could begin.
• Early 2022: the County applied for a grant/loan combination from the USDA to assist the community in getting County water. Note: This is the first County grant/loan through the USDA and it is apparently very favorable to our community.
• May 2023, the USDA approved for the County, a grant of $1,029,00.00 to be used for construction. This grant portion is not to exceed 43 percent of the total costs.
• The reminder of the cost will be loaned to the County at what we believe is a 40-year term at 3 percent interest. We are not the recipients of the loan, the County is, and they will collect these USDA loan fees from us through future water bills.
• After meeting with the County recently, they are awaiting our 60 percent consensus vote to move forward before incurring costs to begin the design process

WHY NOT JUST REBUILD OUR WELL?

• After recently spending over $13,000.00 and having a special assessment this August to install new bladder tanks to replace the rusted and leaking 40-year-old buried steel tank, several experts have told us our well house filters will likely not last more than a couple more years.
• To replace these filters in addition to replacing drainage pipes and other needed upgrades will cost approximately an additional $40,000.00 requiring another special assessment of about $750.00 per residence.
• If we did these major upgrades, we would still incur approximately $1,300 perm month costs in maintenance fees, be required to set aside reserve funds for future repairs, face the risk of failed aging pipes, and still have no fire hydrants in the community.

WHY NOT JUST CONSTRUCT A NEW WELL?

• The County environmental engineer has told us that many wells in the vicinity have begun to draw salt water from the aquifer, causing many communities to drill new specially sealed wells that prevent salt intrusion, but this is VERY expensive.
• The State of Maryland is not enthusiastic about permitting new wells when County water is available.
• The existing PVC piping distributing the water from the well coursing around the subdivision is over 40 years old. Some studies have shown PVC piping to last as little as 30 years and other studies closer to 75 years. Many unknown factors such as Soil PH, chemicals added to the water, the quality of the initial installation andm many other factors come into play. No underground pipe lasts forever, and if we miss the opportunity to get new County water piping, the old piping could be a very large future cost to replace and repair.

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EXPECTED TIMELINE AFTER A VOTE TO PROCEED
After the County is informed of our vote to proceed: (January 2024)
a. 3-6 months to get an engineering firm under contract and to finalize the design
phase, including workable plans and specifications.
b. 2-3 months for the County procurement office to advertise and seek public bids.
c. 2 months to receive bids.
d. 3-4 months to award and get the low bidder under contract.
e. 1 month for contractor to begin construction.
f. 10-12 months for completion of construction and the well is abandoned.
So, from the time of our vote to actual construction completion looks to be
about 24 months (approx Spring 2026)

Estimated Project Costs

• Total Cost of $2,519,000.00 (includes construction, permits, engineering/design fees, and contingencies funds)
• Funded through a USDA Loan and Grant Package
• $1,024,000.00 grant (40%)
• 1,495,000.00 (60%) 40 year loan at 3 % interest to be repaid through individual water bill amounting to $298 per quarter per household
• Operating/maintenance costs through Ocean Pines $50 per quarter
• Water Usage Fee $44 per quarter up to 18K gallons

ESTIMATED COSTS PER HOUSEHOLD $131/mo
This monthly amount includes:

• The operation and maintenance (O&M) of our system. All rate-payers pay this fixed amount, covering such elements as the cost of water treatment at the Ocean Pines water plant, the cost of repair crews, and the replacement of such items as fire hydrants and water meters as they age and need replacement.
• The loan payment portion
• Actual charges for water usage based on an average of 6,000 gallons per household each month. (County billing to be quarterly) Water usage will vary based on factors such as: full time or part-time occupancy, number of persons living in a house, usage of water sprinklers, dripping faucets and running toilets.

*We are actively searching for additional funds to reduce the loan which would lower this payment)

ESTIMATED COSTS PER HOUSEHOLD $392/Quarter or $131/mo
1/8
Actual Water Useage
18K gallons
$44/quarter
(will vary depending on
Individual household habits)



1/8
Operation &
Maintenance
$50/Quarter

3/4 Loan Portion $298/quarter
*Actively seeking additional grants

$$ ESTIMATED COSTS PER HOUSEHOLD $$
- This year we have spent $53,000 to maintain and repair our well, this presently
works out to over $82.00 per month per household for the failing well system.
- With the proposed cost of $131 per month, the net cost for new County water
would increase by $49 per month or $1.63 per day. This increase will give us
clean, consistent water, new piping infrastructure, and fire protection while
reducing home insurance and funds required for reserves.

Ballots will be emailed and distributed on Friday, January 29, 2023
Ballots are due on or before Monday January 8, 2024
and counted at the Budget meeting on Tuesday, January 9, 2024