BANDON — The Bandon City Council will ask voters in the Nov. 5 special election to approve an up to $5.5 million water and sewer general obligation bond for replacement parts and repairs to the city's wastewater and sewer treatment plants and related matters.
The council voted unanimously at the Aug. 5 meeting to approve resolution No. 19-1-5. Now the ballot measure will be submitted to the Coos County Elections Department calling for the measure election.
According to City Manager Robert Mawson, if approved, the measure is expected to finance the following improvements: A new headworks screen, a grit removal system and UV system control system at the wastewater treatment plant; replacement of the Fillmore Avenue wastewater pump station; repairs to the wastewater collection system; a new raw-water clarifier at the water treatment plant; and bond issuance costs.
A summary of projects and cost estimates for the repairs and upgrades, prepared by The Dyer Partnership, are available at City Hall or online at cityofbandon.org.
The general obligation bond request comes on the heels of emergency rate increases implemented by the council at the request of the Utilities Commission.
The council voted unanimously in June to approve emergency rate increases for one year, increasing water rates by 21 percent and sewer rates by 28 percent to cover projected revenue shortfalls in the 2019-20 budget. The new rates went into effect July 3.
Approximate increase to customers using 2,000 gallons of water was estimated to be a total of $11.30 per month, or an approximate total increase of $15.27 per month for customers using 5,000 gallons of water.
Electric utility rates were also increased by 2 percent in July to recover costs associated with wholesale rate increases by the Bonneville Power Administration.
The general obligation bond was also recommended by the Utilities Commission, to cover long-term upgrades and repairs. If the bond is not approved, the council can continue the emergency rate increases, the Utilities Commission recommended.
Bandon resident Rob Taylor has challenged the council's decision to increase the water and sewer rates, saying the city is bound by a 1995 city charter amendment passed by voters that no increase in water rates, sewer rates or other fees, with a few exceptions, can be made without voter consent.
Taylor asserts the council misused its authority by basing its decision on a request by the Utilities Commission. Further, the council's reasoning of a "projected revenue shortfall" is not an emergency, according to the city's ordinance, Taylor wrote in his complaint statement filed in the Coos County Circuit Court on June 25.
Taylor is seeking declatory relief, in which the court would declare the rate increases void because they violate the city's charter and were not approved by voters.
It is not yet known when the issue will go to court.
Approval of the bond measure in November would authorize the City to issue up to $5,500,000 in principal amount of general obligation bonds to pay capital costs related to the City's water and sewer treatment and distribution/collection systems. Bonds would mature in 21 years or less and may be issued in one or more series.
The measure is estimated to result in a first-year annual tax of $56 on a home valued at $100,000, Mawson said. Actual levy rates may differ due to interest rates incurred and changes to assessed value. The
repayment schedule is designed to keep the total bond levy rate (existing plus new) at an annual target rate of $99 for a home valued at 100,000.
Related excerpts of the General Obligation Bond Levy Rate Analysis, prepared by Piper Jaffray in June are also available on the city's website.
Cities are allowed by the Oregon Constitution and Oregon Revised Statutes to issue general obligation bonds to provide funds to finance the costs of projects, but are limited to three percent of the real market value of taxable property in the city. However, that limit excludes bonds for water supply, treatment or distribution or sanitary or storm sewage collection or treatment.
The City is allowed to spend money on the project before it issues the tax-exempt bonds and then reimburse itself once the bonds are issued.
Estimated costs for the upgrades include:
Wastewater plant: headworks upgrade - $585,750; new Fillmore pump station - $1,894,240; UV treatment improvements - $102,120; Inflow & Infiltration Projects - $1.3 million for a total of $3,882,110;
Water treatment plan: new clarifier - $1,632,750
Program total: $5,514,860
Funding Source General Obligation Bond - 100 percent.
Mawson and councilors have said that Bandon's fixed tax rate, at 46 cents per $1,000 of assessed valuation, is the lowest tax rate of all neighboring cities. The 1995 charter amendment prevents the city from making needed rate increases to properly operate and update its utilities for the health, safety and economic welfare of its citizens, he said.