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2022-388-Order No. 2022-051 Recorded 10/12/2022REV 1F 1 LEGAL COUNSEL Recorded in Deschutes County Steve Dennison, County Clerk Commissioners' Journal 2022-ass CJ2022-388 10/12/2022 4:11:15 PM BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON Order Accepting Petition to Form Terrebonne Sanitary District and Setting Final Hearing * ORDER NO. 2022-051 WHEREAS, Petitioners submitted a petition (Exhibit A) for formation of the Terrebonne Sanitary District ("District") with the proposed district boundary as identified in Attachments A & B of the petition attached to this Order; and WHEREAS, the Deschutes County Clerk's Office and Assessor's Office each certified that the petition was signed by the requisite number of registered voters or landowners, as indicated in their memos attached to the petition; and WHEREAS, the Deschutes County Community Development Department determined, as described in their memo attached to the petition, the district formation is consistent with Title 18 Deschutes County Zoning Ordinance, Title 23 Deschutes County Comprehensive Plan and the public facilities goal and sewer facility policies in the Terrebonne Community Plan, Appendix A; and WHEREAS, the Board held a duly noticed public hearing on October 5, 2022, to determine whether, in accordance with the criteria prescribed by ORS 199.462, the area could benefit by the formation of the district; now, therefore THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, HEREBY ORDAINS as follows: Section 1. The petition for formation and all exhibits attached to this Order are hereby incorporated by reference. Section 2. The petition for formation is accepted and the final hearing on this petition is set for November 2, 2022. Section 3. If written requests for an election are not filed as provided by ORS 198.810(3), the Board, at the time of the final hearing, will enter its order creating the district. Written requests for an election concerning creation of the district must be filed at or before the final hearing by not less than 15 percent of the electors or 100 electors, whichever is the lesser number, registered in the proposed district. PAGE 1 OF 2- ORDER NO. 2022-051 Section 4. The district will be named Terrebonne Sanitary District with the boundary as identified in the petition for formation. The purpose of this District is to provide sanitation facilities and services as described in ORS 450.005-245 to inhabited property located within the Terrebonne Rural Community, Deschutes County, Oregon. Dated this 5 day of , 2022. ATTEST: k Recor ing Secretary BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON PATTI ADAIR, CHAIR ANTHONY DeBONE, VICE CHAIR PHIL CHANG, COMMISSIONER PAGE 2 OF 2- ORDER NO. 2022-051 arm etri ENGINEERING. PLANNING . ENVIRONMENTAL SCIENCES 150 NW PACIFIC PARK LANESUITE 110 BEND, OR 97701 P 541,508.7710 Terrebonne Sewer Advisory Group c/o Ryan Rudnick Parametrix rrudnick@parametrix.com August 3, 2022 Steve Dennison Deschutes County Clerk PO Box 6005 Bend, OR 97708-6005 Re: Petition to Form the Terrebonne Sanitary District Dear Mr. Dennison: Attached please find a Petition to form the Terrebonne Sanitary District pursuant to ORS 198.705 to 198.155 ("Petition"). We are filing this Petition on behalf of the Chief Petitioners listed at the end of this letter. In support of that petition, we provide you with the following information. A. OVERVIEW The unincorporated community of Terrebonne, Oregon, does not currently have a municipal wastewater facility, leaving all businesses and residents dependent upon onsite wastewater systems (septic tanks with drainfields, drill holes, or sand filters). Aged and failing septic systems, coupled with the low permeability of the soils, are resulting in onsite system failures, surfacing effluent, exorbitant repair/replacement costs, and business closures. These conditions create economic and practical hardships for new and existing businesses and residents. Both Deschutes County and the Oregon Department of Environmental Quality ("DEQ") have concluded that a community sewer system is the only sound, long-term solution. The proposed system will collect wastewater within the service territory and then convey the wastewater to the proposed City of Redmond Treatment Wetlands Complex. Community members formed the Terrebonne Sewer Advisory Group ("TSAG") in 2019 and began actively working with Deschutes County, DEQ, and the City of Redmond to study and develop a plan to provide community sewer service to Terrebonne. During that time, the TSAG has also engaged in community outreach, including community meetings. As a result of those efforts, the TSAG has concluded that the best mechanism to organize, fund, and operate the proposed community sewer system is to form a sanitary district under ORS Chapter 450. The proposed Terrebonne Sanitary District will be organized under ORS 450.009 to ORS 450.245 for the purpose of providing sanitation facilities and services to inhabited property located within the Terrebonne Rural Community, Deschutes County, Oregon. The proposed territory to be included in the Terrebonne Sanitary District boundaries is described in Attachment A, the Lot and Block Description, and as the "Phase A Service Area" on Attachment B, the Boundary Map. Ill araetrix ENGINEERING. PLANNING. ENVIRONMENTAL SCIENCES 150 NW PACIFIC PARK LANE I SUITE 110 1 BEND, OR 977011 P 541.508.7710 B.BACKGROUND The TSAG has completed the required preliminary steps to submit this Formation Petition. On April 27, 2022, the Chief Petitioners submitted a prospective petition for formation of the Terrebonne Sanitary District to the Deschutes County Clerk pursuant to ORS 198.748. The prospective petition identified the required special district formation criteria under ORS 198.720 and described how the proposed Terrebonne Sanitary District met the criteria. On this date, the Chief Petitioners also submitted a lot and block description and a map of the proposed boundaries pursuant to ORS 198.748 and an economic feasibility statement prepared in accordance with ORS 198.749 for review by the Deschutes County Clerk. On June 6, 2022, an attorney at Jordan Ramis PC emailed the Deschutes County Clerk on behalf of the Chief Petitioners and the TSAG to provide a copy of the draft formation petition for the Clerk's review. On June 9, 2022, the Deschutes County Clerk confirmed that the draft formation petition was complete and authorized the TSAG to move ahead with signature gathering. On June 15, 2022, the circulator, as defined in ORS 198.751 begin gathering petitioner signatures pursuant to ORS 198.750(4) and ORS 198.766, This Formation Petition includes the petition form that was approved by the Deschutes County Clerk, which has now been signed by the Chief Petitioners. This Formation Petition submission includes the lot and block description for the proposed Terrebonne Sanitary District (Attachment A), the boundary map showing the Phase A Service Area proposed to be included in the Terrebonne Sanitary District boundaries (Attachment B), the petition signature sheets (Attachment C), the economic feasibility statement (Attachment D) and the required SEL 704 form (Attachment E) and required $100 deposit. C. SPECIAL DISTRICT FORMATION CRITERIA MET This Petition meets the requirements for special district formation set forth in ORS 198.720: ORS 198.720(1) A district may consist of contiguous or noncontiguous territory located in one or more adjoining counties. If any part of the territory subject to a petition for formation or annexation is within a city, the petition shall be accompanied by a certified copy of a resolution of the governing body of the city approving the petition. The sanitary district will consist of territory located entirely within Deschutes County. Chief Petitioners contemplate the potential future expansion of the service area to other properties in the community. The community of Terrebonne is not an incorporated city. ORS 198.720(2) A district may not include territory included within another district formed under the same principal Act when the other district is authorized to perform and is performing the services the affected district is authorized to perform, unless: (a) Withdrawal of such territory is proposed and the territory is withdrawn by withdrawal proceedings conducted in the other district simultaneously with the formation or annexation proceedings, and the proposed boundary changes are approved for both districts; or (b) The principal Act provides for automatic withdrawal of the affected territory in such a case. The sanitary district will not include territory located within another existing sanitary district. The sanitary district will share a portion of the Terrebonne Water District service Page 2 Terrebonne Sanitary District Formation Petition Cover Letter arm etrix ENGINEERING. PLANNING. ENVIRONMENTAL SCIENCES a_ 150 NW PACIFIC PARK LANE I SUITE 110 1 BEND, OR 977011 P 541.508.7710 territory; however, the sanitary district will provide services that are entirely distinct and separate from those provided by the Terrebonne Water District. ORS 198.720(3) The boundary lines of a district formed under ORS 198.705 to 198.955 shall include only such territory as may in reason be served by the facilities or services of the district. As detailed in the attached Economic Feasibility Statement, the proposed sanitary district boundaries include only such territory as Chief Petitioners and their technical consultants believe may reasonably be served by the facilities and services of the sanitary district at the time of its formation. ORS 198.720 (4) For purposes of ad valorem taxation, a boundary change must be filed in final approved form with the county assessor and the Department of Revenue as provided in ORS 308.225. The sanitary district will use a fee for service revenue model as detailed in the Economic Feasibility Statement attached as Attachment D. The sanitary district will not have a permanent tax rate. D. FORMATION PETITION REQUIREMENTS MET This Formation Petition meets the requirements for formation petitions articulated under ORS 198.750, as outlined below: 1. Per ORS 198.750(1)(a), the Formation Petition states that the petition is filed pursuant to ORS 198.705 to 198.955. 2. Per ORS 198.750(1)(b), the Formation Petition describes the affected county and includes a map defining the precise boundaries of the proposed Terrebonne Sanitary District (See Attachment A, Lot and Block Description, and Attachment B, Boundary Map). At this time, the TSAG is proposing to form the Terrebonne Sanitary District in the area designated as "Phase A Service Area" on the Boundary Map in Attachment B. 3. Per ORS 198.750(1)(c), the Formation Petition designates the principal Act for the sanitary district. This a district formation, not a change of organization as defined under ORS 198.705(4). As such, the only "affected district" is the proposed Terrebonne Sanitary District, for which the principal act is found in ORS 450.009 to ORS 450.245. 4. Per ORS 198.750(1)(d), the Formation Petition states that the nature of the proposal is formation of a district. 5. Per ORS 198.750(1)(e), the Formation Petition states that the territory subject to the petition is inhabited. 6. Per ORS 198.750(1)(f), the Formation Petition states the number of board members (five), given that the petition is for formation and district board members will be elected. The TSAG anticipates electing a board either through a formation election process initiated by petition pursuant to ORS 198.815 or through an election pursuant to ORS 198.825. The TSAG understands that Page 3 Terrebonne Sanitary District Formation Petition Cover Letter Parametrix ENGINEERING. PLANNING. ENVIRONMENTAL SCIENCES IIIIiagglig! WIN, ISBN e 150 NW PACIFIC PARK LANE I SUITE 110 1 BEND, OR 977011 P 541.508.7710 elections pursuant to either of these processes will be governed by ORS Chapter 255. 7. Per ORS 198.750(1)(g), the Formation Petition states that a tax rate limit does not need to be included in the petition since no tax revenues are necessary to support the services and functions described in the economic feasibility statement (Attachment D) for the proposed Terrebonne Sanitary District. 8. Per ORS 198.750(1)(h), the Formation Petition indicates that additional proposed terms and conditions for formation are not applicable. 9. Per ORS 198.750(1)(i), the Formation Petition signature form provides a space for formation petition signers to indicate whether they are landowners within the district, electors registered in the district, or both. Signatures have been gathered pursuant to ORS 198.755, ORS 198.760, and ORS 198.765, and the petition circulator ensured that signers of the petition indicated whether they are a landowner, elector, or both on the lines provided on the signature sheet. The TSAG has met the signature requirements articulated in ORS 198.755(1)(b) by gathering the signatures of not less than fifteen landowners within the Phase A Service Area boundary. This is explained in greater detail in Section D below. 10. Per ORS 198.750(1)(j), the Formation Petition states that the petitioners are requesting that the Board of County Commissioners commence proceedings to form the territory described. Additionally, the Chief Petitioners are submitting a security deposit to accompany the Formation Petition pursuant to ORS 198.775. The proposed Terrebonne Sanitary District is located entirely within Precinct 18, so the Chief Petitioners are submitting a security deposit in the amount of $100 based on the $100 per precinct cost. The two Chief Petitioners have completed the SEL 704 form (Attachment E) and will each contribute $50 in cash to the required deposit. E. PETITIONER SIGNATURE REQUIREMENTS MET ORS 198.755(1) provides four different pathways to meet the signature requirement for a formation petition. The TSAG decided to meet the standard by gathering the requisite number of landowner signatures as allowed under ORS 198.755(1)(b). ORS 198.755(1)(b) provides that a petition for formation must be signed by "not less than .... [f]ifteen owners of land or the owners of 10 percent of the acreage, whichever is the greater number of signers, within the territory subject to the petition." The TSAG has met the requirements of ORS 198.755(1)(b) by gathering the signatures of not less than fifteen owners of land within the Phase A Service Area of the proposed Terrebonne Sanitary District.' During the process of gathering signatures, the circulator also gathered signatures of individuals who reside within the Phase A Service Area and support the project but are not landowners. The TSAG believes these signatures demonstrate widespread support for ' The group elected to meet the signature requirement by gathering signatures from not less than fifteen owners of land within the Phase A Service Area. The TSAG reached this decision after determining that fewer than fifteen landowners would be needed to reach the ten percent acreage requirement articulated in ORS 198.755(1). Page 4 Terrebonne Sanitary District Formation Petition Cover Letter araetrix ENGINEERING. PLANNING. ENVIRONMENTAL SCIENCES is ggw� 150 NW PACIFIC PARK LANE I SUITE 110 ( BENCH, OR 977011 P 541,508.7710 the sanitary district effort and understand that non -landowner signatures do not count towards the signature standard articulated in ORS 198.755(1)(b). The purpose of this section is to summarize the TSAG's decision to meet the petition signature requirements by gathering the signatures of not less than fifteen owners of land within the territory subject to the petition. The petition sheet attached to this Formation Petition contains sixteen unique landowner signatures. It also contains signatures from fifteen unique individuals that have a residence address within the Phase A Service Area but are not landowners. The TSAG understands that these fifteen signatures do not count towards the required number of landowner signatures per ORS 198.755(1)(b). The signature requirement has been met by securing the signatures of sixteen landowners. F. NEXT STEPS The TSAG understands that since the Formation Petition is permitted to be signed by landowners and has in fact been signed by landowners to meet the signature requirements of ORS 198.755(1)(b), the Deschutes County Assessor has ten days to examine the formation petition and determine whether it has been signed by the requisite number of qualified signers pursuant to 198.765(2). Should the County Assessor find that the requisite number of qualified signers have signed the formation petition, the TSAG expects that the County Assessor will file the formation petition with the Board of County Commissioners as provided in ORS 198.765(2). If the County Assessor finds that the requisite number of signers have not signed the Formation Petition, the Assessor will notify the Chief Petitioners, also as provided in ORS 198.765(2). If you have any questions about the Petition or require any additional information, please contact me at (541) 508-7785 or the email address above or contact the Chief Petitioners: Tim Brown Landowner, Phase A Service Area of the proposed Terrebonne Sanitary District Email: trbrown541@msn.com Phone: 541-848-1239 Guy Vernon Landowner, Phase A Service Area of the proposed Terrebonne Sanitary District Email: guyvernon@me.com Phone: 541-958-1508 Sincerely, Ryan Rudnick Engineer IV, Parametrix Consultants to the TSAG Page 5 Terrebonne Sanitary District Formation Petition Cover Letter PETITION TO FORM SPECIAL DISTRICT TERREBONNE SANITARY DISTRICT To: The Board of County Commissioners, Deschutes County, Oregon The undersigned, in support of this Petition, state as follows: 1. This Petition for Formation is filed pursuant to ORS 198.705 to 198.955 on 202Z (date) and Petitioners request the Board commence proceedings to form the territory described below as Terrebonne Sanitary District (name of district), Deschutes County, Oregon: See attached lot and block description and boundary map. (describe the territory and boundaries of the proposed District in detail. If more room is needed, a detailed description may be attached to this petition) 2. The principal act for Terrebonne Sanitar District (name of district) is ORS ORS 450.005 to ORS 450.245 (Proper statutory reference required, see ORS 198.010 for listing of appropriate principal act) 3. (if applicable) The District board members will be generally elected and the number of board members is a . (if consent by all landowners) The names of the first board members are as follows and each has consented in writing by the attached acceptance: Should the Board of County Commissioners issue a formation order, the Terrebonne Sanitary District will hold elections pursuant to ORS Chapter 255 to elect the first district beard. _ (list each proposed board member) 4. (if applicable) The District includes a proposed permanent rate limit for operating taxes and the proposed rate Is N/A - No tax revenues are necessary to support the services and functions described in the economic feasibility statement. (expressed in dollars per thousand dollars of assessed value) 5. This Petition for Formation affects only Deschutes County and is not in any incorporated city limits. 6. The Board of N/A (name of agency(ies) required to give approval under district's principal act) approved the petition pursuant to ORS 198.800 on N/A (insert date). (Certification of such approval by the relevant agency(ies) is provided below.) 7. The territory subject to this Petition for Formation is primarily inhabited / uninhabited (circle one). This petition is signed by land owners and/or registered voters in the area proposed to be formed as indicated opposite their respective signature, and all signatures were obtained on or after the 15th __ day of June , 2022. 8. (if applicable) The proposed formation is subject to the following terms and conditions: N/A rev 05/ 19 Deschutes County l,cgal Counsel, 1300 N.A1r, Wall St., Ste, 205, Bend, OR 97703; FAX 541-617-4749; legalcounsel(i,)deschutes.org 9. This Petition has been signed by at least 15 percent of the electors, or 100 electors whichever number is greater, registered in the area proposed to be formed; or at least 15 owners of land or owners of 10 percent of the acreage, (whichever is greater) within the area proposed to be formed. (or) (if consent by all landowners) This petition has been signed by 100 percent of the landowners in the proposed district as affirmed by the attached affidavit signed by, stating the petitioner believes that the signers constitute all the owners. 10. A security deposit form and payment and an economic feasibility statement are attached to this petition. Signed this 'L® day of 20'22by B kwc _ _ '�`^ , Chief Petitioner(s). Ct 7 "7 Signature Address, City, State, ZIP :9ure this day of v , 2t�by ��a/�'"'�/''i ,Chief Petitioner(s). Address, City, State, ZIP Approved by the Board of Name of Agency Agency Signature m By: (Print Name) Title: DATED this _ day of , 20_ Approved by the Board of Name of Agency Agency Signature By: (Print Name) Title: DATED this _ day of , 20_ rev 05119 J)"cluites County Legal Counsel, 1300 N.W, Wall St., Stc. 205, Bend, OR 9770:3; FAX .541-617-4748; legalcounsel(dtlescluites.org ATTACHMENT A Description of the proposed territory for inclusion in the sanitary district Terrebonne Sanitary District Service Area Boundary Description (Lot & Block) Prepared by: Ryan Rudnick, PE (Parametrix Inc.) Date: 4/26/2022 The proposed service area boundary includes the following blocks and lots in the Plat of Hillman, filed November 22, 1909 under County Survey No. 07529, records of Deschutes County Surveyor, situated in Section 16, Township 14 South, Range 13 East, W.M., Deschutes County, Oregon: Block 39 Lot 5-8, 17-32 Block 94 Lots 1-32 Block 40 Lots 27-32 Block 95 Lots 1-32 Block 51 Lots 1-6, 29-32 Block 96 Lots 1-32 Block 52 Lots 1-32 Block 97 Lots 1-32 Block 53 Lots 1-8, 13-32 Block 98 Lots 17-32 Block 54 Lots 1-32 Block 99 Lots 10-18 Block 55 Lots 1-32 Block 100 Lots 1-18 Block 56 Lots 1-32 Block 101 Lots 1-32 Block 57 Lots 1-32 Block 102 Lots 1-32 Block 58 Lots 1-3, 28-32 Block 103 Lots 1-32 Block 69 Lot 1-3, 27-32 Block 104 Lots 1-32 Block 70 Lots 1-32 Block 105 Lots 1-32 Block 71 Lots 1-32 Block 106 Lots 1-32 Block 72 Lots 1-32 Block 107 Lots 1-32 Block 73 Lots 1-32 Block 108 Lots 1-32 Block 74 Lots 1-32 Block 109 Lots 1-32 Block 75 Lots 1-32 Block 110 Lots 1-32 Block 76 Lots 1-6, 31-32 Block 111 Lots 1-12, 21-32 Block 79 Lots 8-32 Block 114 Lots 1-24 Block 84 Lots 1-32 Block 124 Lots 1-9, 24-32 Block 86 Lots 4-5, 28-32 Block 125 Lots 1-32 Block 87 Lots 1-5, 17-32 Block 126 Lots 1-32 Block 88 Lots 1-32 Block 127 Lots 1-32 Block 89 Lots 1-32 Block 128 Lots 1-32 Block 90 Lots 1-32 Block 129 Lots 1-9, 24-32 Block 91 Lots 1--32 Block 142 Lots 1-9 Block 92 Lots 1-32 Block 143 Lots 1-19 Block 93 Lots 1-32 Block 144 Lots 1-3 ATTACHMENT B Boundary Map. of the territory proposed for inclusion in the sanitary district Phase A Servlce Area Boundary ara'71'6iet1'i©ATE: 4/26/201.2 Terrebonne Sanitary District ASERVICE AREA BOUNDARY (PHASE A) N 4 ATTACHMENT C Petition Signatures 21 OV3SNNOM NNAl V13WVd (J` I dWVIS 1VIOIA.dQ to IM ii r :soaldxg uolssiulwoD AW u05010 ao3 ollgnd A.luloN -oz ® ,lo Sup sltp ow oaojoq Ruoms uRv ami-Bosuns oluls jo dlunoD � :01t111S11(�IS -ommid Atu in os pip uollpad stgl pou8is ot[m uosied rSAMO pue `uoi)pod sigl pole[,(6i I ) atlioo ` 9 q ao . o wq v w Iro o y v ,ro y Iro ^o w j w o "� a� S3 0 bi d o ayi oaf o d e� o d3 a� o a� o ow o v a�z.a�z�ca�zra�z¢a�z��zaa�a�z�az Cl) cY C/t `n in va cn tj to w �- P4 w w ,� w il- q `^ f� S.. 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ATTACHMENT D Economic Feasibility Statement Economic Feasibility Statement Preparedfor Terrebonne Sanitary District Prepared by Parametrix 150 NW Pacific Park Lane, Suite 110 Bend, OR 97701 T.541.508.7710 F. 1.855.542.6353 www.parametrix.com August 2022 1 297-2509-008 Economic Feasibility Statement. Prepared by Parametrix Bend, Oregon. August 2022. Economic Feasibility Statement Terrebonne sanitary District 1. SERVICES AND FUNCTIONS OF THE PROPOSED DISTRICT.................................................................1 1.1 Background......................................................................................................................................1 1.2 Service Area and Phasing.................................................................................................................1 1.3 Services and Functions Performed..................................................................................................3 2. RELATIONSHIP TO OTHER GOVERNMENT SERVICES........................................................................3 2.1 City of Redmond..............................................................................................................................3 2.2 Terrebonne Water District...............................................................................................................4 3. ECONOMIC FEASIBILITY STATEMENT..............................................................................................4 3.1 Engineer's Opinion of Probable Cost...............................................................................................4 3.1.1 Construction Cost................................................................................................................5 3.1.2 Construction Contingency...................................................................................................6 3.1.3 Engineering and Surveying..................................................................................................6 3.1.4 Construction and Funding Administration .............. ............................................................ 6 3.1.5 Legal, Permitting, Administration.......................................................................................6 3.2 Public Infrastructure Grant and Loan Programs..............................................................................6 3.2.1 Oregon Business Development Department — Infrastructure Finance Authority (OBDD-IFA).............................................................................................................................6 3.2.2 U.S. Department of Agriculture — Rural Development (USDA-RD).....................................7 3.2.3 Oregon Department of Environmental Quality (DEQ)........................................................7 3.3 Annual Operating Budget................................................................................................................8 3.4 Income...........................................................................................................................................13 3.5 Annual Operation and Maintenance Costs....................................................................................15 3.6 Debt Repayments..........................................................................................................................16 3.7 Reserves.........................................................................................................................................17 3.8 Onsite Connection Costs................................................................................................................18 3.9 Summary........................................................................................................................................18 LIST OF FIGURES Figure 1-1 - Sanitary District Service Area and Phasing..........................................................................2 Figure 3-1. Annual Operating Budget, Scenario 1 (Grant Funding Assumed)........................................9 Figure 3-2. Annual Operating Budget, Scenario 2 (No Grant Funding Assumed)...................................9 Figure 3-3. Summary of 2020 Census Data for the Terrebonne CDP...................................................13 August 2022 1 297-2509-008 Economic Feasibility Statement Terrebonne Sanitary District 1. Background The unincorporated community of Terrebonne, Oregon, does not currently have a municipal wastewater facility, leaving all businesses and residents dependent upon onsite wastewater systems (septic tanks with drainfields, drill holes, or sand filters). The increasing age of septic systems and the low permeability of soils in Terrebonne, is resulting in an increasing trend of onsite system failures, surfacing effluent, exorbitant repair/replacement costs, and business closures. The downtown core area of Terrebonne that includes both commercial and residential zoned land is not well suited for onsite wastewater disposal. The area has a shallow bedrock that is typically within 24 inches of the ground surface. To make matters worse, the area is platted with small lot sizes lacking adequate drainfield reserve area. Many lots have been denied Septic System approval by ODEQ and Deschutes County due to inadequate lot areas and/or poor soil permeability. Unfortunately, these conditions limit the ability of new and existing businesses and residents to exist in Terrebonne. Both Deschutes County and Oregon DEQ agree that for Terrebonne, a community sewer is the only sound, long-term solution. Considering a community sewer requires an authority to manage and operate the system, the formation of a new special district is being proposed. The special district being proposed is a sanitary district as defined by Oregon Revised Statutes (ORS) Chapter 450 and will be referred to as the Terrebonne Sanitary District (TSD). The purpose of this Economic Feasibility Statement is to meet the requirements of ORS 198.749. 1.2 Service Area and Phasing Per the most recent feasibility study, the recommended sewage collection and treatment alternative involves a Septic Tank Effluent Pump (STEP) pressurized collection system that pumps septic tank effluent to the proposed City of Redmond Treatment Wetlands Complex for treatment. Three phases have been planned for the proposed STEP collection system in Terrebonne: Phase A - Commercial Core, Phase B — Residential West, and Phase C — Residential East. As described in prior sections, the highest concentration of septic system problems and support for a sewer system exists within the Commercial Core Area, defined by Phase A. Properties within Phase A generally include commercial uses and residences on small lots lacking adequate drainfield and reserve areas. Properties outside the commercial core in Phases B and C are generally residential with larger lots and less urgent septic system problems at the time of this study. The STEP collection system has been planned to ultimately serve the entire Terrebonne community at full-buildout, but only construction of Phase A is proposed for funding and construction at this time. A figure showing the preliminary district boundaries with anticipated phasing is below: August 2022 1 297-2509-008 Economic Feasibility Statement Terrebanne Sanitary District Pawannetrix oarE' Terrebonne Sanitary District ASERVICE AREA BOUNDARY (PHASE A) N Figure 1-1 - Sanitary District Service Area and Phasing August 2022 1 297-2509-008 Fconomic Feosibility Statement Terrebonne Sanitary District 1.3 Services and Functions Performed The District will perform the following functions and provide the following services to the community of Terrebonne: Provide a long-term, sustainable sanitary sewer collection and disposal system as an alternative to the historic use of septic drainfields and drill holes which will improve the public and environmental health in the community. In particular, the District will: a. Apply for public infrastructure grants and loans to fund construction of the Phase A wastewater collection system. b. Retain a civil engineer to prepare construction plans, specifications, and cost estimates for construction. Retain an owner's representative/project manager to solicit contractor bids, manage construction schedules, inspect construction, and review contractor invoices. Inform Terrebonne customers of the schedule, costs, and technical requirements for connection to the public sewer collection system. Manage, operate, and maintain the Terrebonne community sewer system in accordance with the rules and regulations of ORS Chapter 450. In particular, the District will: a. Hold District board meetings to review and discuss system revenues, expenses, issues, capital improvement plans, etc. and make formal decisions regarding the wastewater system. b. Bill customers for hookup fees and monthly sewer service charges, with contracted assistance from utility billing service contractors. c. Operate and maintain the wastewater system through proactive and reactive activities, with contracted assistance from a qualified maintenance contractor. d. Review discharge meter volumes on a monthly basis and pay the City of Redmond for wastewater treatment charges, according to the Intergovernmental Agreement (IGA). RELATIONSHIP TO OTHER GOVERNMENT SERVICES There is the potential for TSD services to overlap with existing districts and government agencies in the area. The two existing entities that provide services and functions that relate to the TSD are the City of Redmond and the Terrebonne Water District. 2.1 City of Redmond Based on the evaluation of wastewater system alternatives, the recommended alternative for Terrebonne is a STEP collection system and forcemain that discharges to the Redmond Treatment Wetlands Complex. This alternative presents the most cost-effective solution for the community, while also minimizing community impacts, environmental impacts, operational costs, and permit processes. This means that the TSD and City of Redmond will coordinate to provide a viable community sewer system for Terrebonne. The City of Redmond and Deschutes County have entered into a Memorandum of Understanding agreement regarding the intent for the Redmond Treatment Complex to accept effluent via the Terrebonne forcemain. An intergovernmental agreement (IGA) between the City of Redmond and the proposed TSD will be prepared, which will describe the terms, conditions, and costs for the City of Redmond to provide wastewater treatment and disposal. A portion of District revenues from monthly sewer rates and connection fees will need to cover the expenses for wastewater treatment and disposal provided by the City of Redmond. August 2022 1 297••2509-008 Economic Feasibility Statement Terrebonne Sanitary District 2.2 Terrebonne dater District The Terrebonne Water District provides clean drinking water to its residents in Terrebonne. While there are no other overlapping services at the outset of the new sewer system operation, there is potential for administrative and billing cooperation between the two districts. At the time of this Economic Feasibility Statement, however, no coordination or agreement between the two districts is planned. The operating budget assumes that no administrative, operational, managerial, or financial services will be shared by the two districts. This section evaluates the economic feasibility of the proposed Terrebonne Sanitary District and outlines options for financing and implementing the proposed Phase A wastewater collection system improvements. To construct the proposed improvements, a financial plan acceptable to the District and its customers must be developed. It is anticipated that a combination of loans and grant funding will be obtained to construct the proposed Phase A collection system. Below is a general summary of the District's estimated infrastructure costs, proposed rate structure, SDCs, and future wastewater system budgets. A summary of debt capacity for various loan terms and interest rates is also provided. Generally, most utility rate structures include funding for periodic minor system improvements and maintenance items, payroll costs for staff, and a regular allocation for future improvements. As a new wastewater system with few connections proposed at the outset, there are currently no existing revenue streams, and a relatively high level of grant funding will be necessary to establish this new system with rates and fees that are affordable to Terrebonne customers. 3.1 Engineer's Opinion of Probable Cost The opinion of probable cost to construct the proposed Phase A collection system is $3,830,320. This discrete dollar figure for capital costs was used for the purposes of this economic feasibility statement. However, the actual project costs are likely to range from $2.68 Million to $5.75 Million, based on Class IV cost estimating standards (-30% to +50%). The cost estimate shown here and below in Table 3-1 below includes five main components, each of which is discussed further below. It must be recognized that opinions of probable cost are preliminary and based on the level of planning presented in this study. Due to the nature of fluctuating economic conditions, the competitive bidding process, the preliminary nature of this planning document, and other unpredictable conditions, actual total project costs may vary from estimates presented here. As the project moves forward, it may be necessary to update the costs as more information becomes available. This opinion of probable cost only accounts for the construction costs anticipated to be borne by the District. A significant portion of the Phase A collection system is being designed and constructed concurrently with the ODOT US 97 improvements project in Terrebonne. Approximately $1 million in ARPA grant funding was allocated to ODOT via Deschutes County to incorporate sewer system design and construction into the planned transportation improvements. The capital costs for the work associated with the ODOT project and the $1 million in funding from Deschutes County are not borne by the District and are therefore not included in this economic feasibility statement. Deschutes County has allocated $1 million in grant funding to reimburse the City of Redmond for additional treatment capacity at the proposed wetlands treatment complex related to the Terrebonne system ($2 million estimated cost borne by Redmond). Per discussions with the City of Redmond, it is August 2022 1 297-2509-008 Economic Feasibility Statement Terrebonne Sanitary District anticipated that 50% of the City's Sewer SDC (for 5/8" meter) will be charged to the District for each EDU that is connected to the Terrebonne collection system. This assumes that approximately half of Redmond's sewer SDC revenues are directed towards treatment infrastructure and the other half towards collection infrastructure, which Terrebonne does not participate in or benefit from. Half of the current $4,371 SDC is $2,185,50, which allows approximately 457 EDUs to be covered by the $1 million grant. Once the $1 million grant is fully spent on the discounted Redmond SDCs for the District, the District will be expected to begin reimbursing the City over time for the remaining treatment system capacity per the terms and conditions agreed upon in the forthcoming intergovernmental agreement. Table 3-1. Phase A Collection System Cost Estimate (Engineer's Opinion of Probable Cost) Unit Construction Item Quantity Unit Price Estimated Cost 8-in Effluent Pressure Main 17,660 If $120 $2,119,200 6-in Effluent Pressure Main 1,810 If $100 $181,000 3-in Effluent Pressure Main 2,680 If $80 $214,400 1-in to 2-in Service Stubs w/ Valves 50 ea $2,000 $100,000 Air Release Valve Assembly with Odor Filter 3 ea $2,000 $6,000 Vault with Mag Meter, Sampling Port, and pH Monitor 1 Is $15,000 $15,000 Connection to City of Redmond Manhole 1 Is $1,000 $1,000 Odor Control 1 Is $5,000 $5,000 Construction Subtotal $2,641,600 Contingency (20%) $528,320 Engineering and Surveying (10%) $264,160 Construction and Funding Management (10%) $264,160 Legal and Permitting (5%) $132,080 Estimated Phase A Total $3,830,320 Class IV Project Cost Estimate (-30% to +50%) $2,681,224 - $5,745,480 ea = each; If linear foot; Is = lump sum 31.1 Construction Cost Initial capital costs for Phase A include effluent pressure mains, fittings, valves, service stub -outs, metering, system monitoring, odor control, connection to the City of Redmond treatment system, construction contingency, and the related technical services described above. Opinions of probable cost in this report are based on preliminary layouts of the proposed improvements, actual construction bidding results for similar work, published cost guides, information from material suppliers, and the author's construction cost experience within the state of Oregon. Future changes in the cost of labor, equipment, and materials may justify comparable changes in the opinions of probable cost presented herein. Opinions of probable cost should be updated when funding applications are completed. When the community secures financing, a reserve factor should be added at that time for an estimated increase in cost due to inflation. August 2022 1 297-2509-008 5 Economic Feasibility Statement Terrebonne sanitary District 3.1.2 ConstrUCtiorl Contingency In recognizing that opinions of probable cost are based on very preliminary design, allowances must be made for variations in final quantities, bidding market conditions, adverse construction conditions, unanticipated specialized investigations, material and labor cost escalation, and other difficulties that cannot be foreseen at this time. A contingency factor of 20 percent of the construction cost has been added to cover these variables. 3.1.3 Engineering and Surveying Engineering and surveying costs have been assumed at 10 percent of the construction cost. This includes costs for an engineering company to conduct preliminary surveys, perform detailed design analyses, prepare construction drawings, prepare construction specifications, and conduct construction stakeout surveys. 3.1.4 C.onstrLICtion and Funding Administration Construction and funding management costs have been assumed at 10 percent of the construction cost. This allowance is intended to include project planning and budgeting, advertising construction bids, grant/loan administration, construction observation, reviewing product submittals, processing change orders, reviewing contractor invoices, and preparing as -built record drawings for the project. 3.1.5 Legal, Permitting, Adn-iinistrution An allowance of 5 percent of the projected construction cost has been added for legal and permitting costs. This allowance is intended to include legal services, contract review, permit fees, and other related expenses associated with the project. 3.2 Public Infrastructure Grant and Loan Programs Business Oregon facilitates One -Stop meetings to quickly and efficiently identify infrastructure funding solutions for communities. Funding partners such as USDA-RD and DEQ are also included in One -Stop meetings. If the District chooses to finance the wastewater system improvement project through funding sources administered by the IFA, USDA-RD, or DEQ, a One -Stop meeting must be scheduled. A One -Stop meeting will provide a forum to evaluate funding opportunities and find the most suitable funding package for the District. Once the District is formed, it will schedule a One -Stop meeting with the IFA and attend with the board members, engineer, partner agency staff, and this report. After the One -Stop meeting, the District will be invited to submit funding applications to the funding programs identified by agencies as the best fit for the proposed project. Most likely, financing will come from a combination of sources. Below is a summary of potential grant and loan funding resources available for wastewater infrastructure projects. Proposed project financing is described further in Section 3.3. 3.1.1 Oregon BUSiness Development Department .---- Infrastructure Finance Authority (OBDD-IFA) Community Development Block Grant (CDBG) funding is administered through OBDD-IFA. Federal CDBG program rules limit program assistance to activities that are necessary to benefit current residents in a August 2022 1 297-2509-008 Economic Feosibility Statement Terrebonne Sanitary Di$tritt primarily permanent -resident area. The program also requires meeting the federal objective of serving low- and moderate -income persons. This means that the service area of the system must serve an area where more than 51 percent of the permanent residents are low- and moderate -income persons now and into the future. With the available census data, it is uncertain whether incomes in the Terrebonne service area will meet this requirement. "Low income" means income equal to or less than 50 percent of the area median (adjusted by family size). "Moderate income" means income equal to or less than 80 percent of the area median (adjusted by family size). Applicable income limits are determined by the U.S. Department of Housing and Urban Development on an annual basis for all Oregon counties and metropolitan statistical areas. Because the Terrebonne area is unincorporated, there is limited data available to determine the median income in the area. For the District to be able to apply for CDBG funding, an income study will be required by the funding agencies to determine the community's income level. The maximum grant available through the program is $2,500,000 (for the category, Public Works Water and Wastewater Improvements). OBDD-IFA is also responsible for administering the Special Public Works Fund Program, which is funded by capital from the Oregon Lottery. Loan funds are normally available through this program to be used by cities and counties for public utility improvements, and the program also offers grant funds once loan capacity limits are met. The maximum grant is typically $500,000, and the maximum loan is typically $10 million. Grants cannot be more than 85 percent of the total project cost. Funds can be made available for the purpose of improving public facilities so the service provider can serve additional commercial and industrial businesses. Eligibility for these funds is tied very closely to the need for economic growth and the creation of new jobs or retention of jobs. Grant funds are typically limited to $5,000 per job that is retained or created. Depending on the capability of the District to demonstrate the creation of new family -wage jobs or the retention of existing jobs, this funding program may be a possible option for the District. OBDD-IFA offers low -interest loan options through the Water/Wastewater Financing Program. The loan program funds the design and construction of public infrastructure needed to ensure compliance with the Safe Drinking Water Act or the Clean Water Act. In order to be eligible for funding, a system must have received, or be likely to receive, a Notice of Non -Compliance by the appropriate regulatory agency. The maximum loan term is 25 years, and the maximum loan is $10 million. Grants of up to $750,000 may be awarded based upon a financial review and must be matched 1:1 with a loan from the program. A median household income survey is required for this program to determine what the required affordability rate is and any potential for grant assistance. 3.2.2 U.S. Department of Agriculture -- Rural nevelopri-cent (USDA-RD) USDA-RD offers affordable funding to develop essential community facilities in rural areas. It offers direct loan options with terms up to 40 years at annual interest rates at and below market rates. Grant assistance is also provided on a graduated scale with smaller communities with the lowest median household income being eligible for projects with a higher proportion of grant funds. An income study of the project area would determine how much of the project would be eligible for grant assistance. Based on correspondence with USDA, Terrebonne is unlikely to meet income requirements for USDA grant funding. 3.2.3 Oregon Departrnent of Environn-rental Quality (DE_-(_-1) DEQ provides water/wastewater funding options through the Clean Water State Revolving Fund. This program is expected see an influx of federal funding resulting from passage of the $1.2 trillion August 2022 1 297-2509-008 Economic Feasibility Statement Terrebonne Sanitary District Infrastructure Investment and lobs Act in 2021, which includes $55 billion for water and wastewater infrastructure projects across the country. The program provides low-cost loans to public agencies for the planning, design, or construction of various projects that prevent or mitigate water pollution. DEQ partners with Oregon communities to implement projects that attain and maintain water quality standards and are necessary to protect recreation, fish habitat, boating, irrigation, drinking water and other beneficial uses. A wastewater treatment facility is an eligible project under this program. These loans are offered with 5- to 30-year terms and annual interest rates ranging from 0.60 percent to 2.31 percent.' As with the other funding agencies, reduced interest rates may be available depending on the income levels in the project area. For the proposed wastewater system to be economically feasible, it must be able to cover operating expenses and debt service with revenues from connection fees and monthly sewer rates. The main components of the annual operating budget include income, O&M expenses, debt repayment, and reserves. Each of these four components is described further in the sections that follow. Two financial forecast scenarios were prepared to illustrate 10-year cash flow projections based on different levels of grant funding, sewer rates, and SDCs. Scenario 1(shown in Figure 3-1 and Table 3-2) assumes a combination of loan and grant funding for the $3.8-million Phase A system improvements. If grant funding is assumed, SDCs and monthly rates are more affordable for Terrebonne customers. Scenario 2 (shown in Figure 3-2 and Table 3-3) is based on debt funding alone (no grants); the higher loan principal means SDCs and monthly rates may pose financial hardships to customers. Both scenarios assume up -front connection charges will be collected from each customer and forecast O&M and future capital outlays. Both financial plan figures detail the rate and EDU assumptions by year. At startup, 160 EDUs are anticipated to connect to the collection system. EDUs are anticipated to increase by approximately 10 EDUs in the commercial core area (Phase A) every year. Sewer rates have been adjusted year -over -year for inflation assuming a 3 percent annual average cost inflation. Anticipated operating revenue is based on the monthly rates and number of EDUs connected to the sewer system. As a new wastewater system there are no existing revenue streams and customer participation in the system will start small and increase over time. Consequently, a relatively high level of grant funding will likely be necessary to establish this new system with rates and fees that are affordable to Terrebonne customers. ' Interest rates depend on term, community size, and income per the DEQ website as of May 2022. August 2022 1 297-2509-008 $350,000 $300,000 $ 250,000 $200,000 $150,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 Economic Feasibility Statement Terrebonne sanitary District Operating Revenues w Debt Service ri O&M Figure 3-1. Annual Operating Budget, Scenario 1 (Grant Funding Assumed) M Operating Revenues M Debt Service w O&M 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Figure 3-2. Annual Operating Budget, Scenario 2 (No Grant Funding Assumed) August 2022 1 297-2509-008 9 M. 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O 0 N (D N N U) O OD M eT C 9 0) M M Cf O O0 0 00 t r N a- M N u to 0 to to w w too o��oaaoaa� N V)Ln N M M al M G Cf> oq Olt00 ..'.: N N N C] �Y C7 � w w /n 00 t CL 1 <9 � N x W � � U o 06 v m 3 > O u rn c a wwt4 c Wwp v° a�i N Q U C V N rN U ;-.: W m 2 m o a 'm Wey a U O 06 m m 01 D C(n W C: 'a U m a Q '"' C N 07 G a ° c m O (1) u° Q d n E a rn N O 12 a 'Q z a Uw z �' U 0- O z CL _ojoU.oiC75®W 4U9cs ro H rt 00 0 0 0 Ln N r; rn N N N N N w 0.0 a Economic Feasibility Statement Terrebonne Sanitary District A crucial consideration for the District's financial plan is initial funding sources and the District's eligibility for grant funding in order to moderate customer sewer bills. Most likely, the funding for the initial Phase A project construction will come from a combination grants and loans from funding agencies. District representatives will participate in a One -Stop meeting with state and federal agencies to further evaluate funding options (see Section 3.2 for more information). Lending agencies, such as Business Oregon, generally require utilities to set user rates sufficient to generate net revenues (operating revenues minus operating expenses) in excess of annual debt service to provide some level of funding contingency (referred to as a "debt service coverage"). The financial forecasts presented in the previous section assume a debt service coverage ratio (DSCR) of greater than 1.00, The budget also includes provisions for a debt -service reserve, which is discussed further in Section 3.7. According to the U.S. Environmental Protection Agency, if the annual sewer service cost per household is less than 1.0 percent of the median household income, it is assumed that the project is not expected to impose a substantial economic hardship on households. If the average annual sewer service cost per household exceeds 2.0 percent of median household income, then the project may place an unreasonable financial burden on many of the households within the community. When the ratio falls between these values, communities are expected to incur mid -range impacts and a secondary test is often performed that includes debt indicators, socioeconomic indicators, and financial management indicators. Various state and national funding agencies have adopted an affordability threshold that falls within this range. According to the 2020 American Community Survey (U.S. Census Bureau Table S1901), the median household income (MHI) for the Terrebonne Census -Designated Place is $56,736, and the boundary roughly matches the unincorporated community boundary and ultimate sewer service area. It is, therefore, considered a reasonable representation of demographics for the purposes of this study. See Figure 3-3 below. Based on the affordability thresholds described above, a 1 to 2 percent annual sewer service cost as a percentage of Terrebonne MHI would correlate to a monthly sewer service cost between $47.28 and $94.56 (per residential service, or one EDU). Therefore, sewer rates should be set within this range to be affordable to ratepayers while also being sufficient to result in a DSCR greater than one for debt repayment. Populations and People Income and Poverty (X� 171i ponuls;:clr idea -an N<,usef_n d Icc<vr�, 1,393 $56,736 P1 2020 Decennof Census Stu<71 2020 America» Connuuaily Survey S Year Esfi;nale5 Education Employment �j E r grec r lines El 1r),o;mrenJR: t R ILA I23.2%aGie 46.4% s r!t0f , 20,.O Ameae an C.onxnun(ty Survey S-Year Esfimares L':'�3? 2020 Anrer;"can Canvnunrty Sur vey 5-rear Exnmares Housing Health ry�� Tptel!{;>i,tiir{;y0,t, n i 14OpOt.11fbi,41.iltt:a:eCi rr3c7 r9a11 I569 U,.'..Ji 3.1% lit 20200ecennial Cell, us S2707 2020Amnrieaa Community S111'ey5-ea, E.cfinrafes Fandlies and Living Arrangements Race and Ethnlclty I➢btal ➢icus P,olcls Hap2nie er Lot,00 4of an; race; 618� 102 REY 111 DPOy 2P20Ame;rca+sCornmunirySurvcYS-Year£stimates K! 10200ecennialCeasus Figure 3-3. Summary of 2020 Census Data for the Terrebonne CDP Source: US Census Data Website (Source Tables in Blue), littps://data.census.gov/ce(Isci/profile?g=1600000US4172800 August 2022 1 297-2509-008 13 Fconomic Feasibility Statement Terrebonne sanitary District By definition, each residential dwelling is counted as one EDU. The quantity of EDUs associated with commercial users is calculated by dividing the average water usage of each by the average water usage of residential dwellings in Terrebonne. In the initial Phase A service area, there are approximately 70 residential dwellings and 33 commercial users. Based on metered water usage data, these 33 commercial users account for approximately 90 commercial EDUs. The total of existing residential and commercial EDUs is estimated to be approximately 160 EDU in the Phase A service area. For the purposes of this study, it was assumed that small businesses with average flows equal to or less than that of an average residence would be charged system development charges (SDCs) and monthly rates for one EDU. Larger businesses with average flows greater than that of an average residence will be charged SDCs and monthly rates accordingly, each ranging from 2 EDUs or more, depending on metered water usage. The District may consider alternate methods for calculating commercial EDUs, such as water meter size (for simplicity) or septic system design flows (for more direct correlation to wastewater generation). However, it is important that any alternate EDU calculation method result in sufficient annual operating revenues and SDC revenues to cover operating expenses and capital costs, respectively. In Scenario 1($1.8 million grant funding assumed), the monthly sewer rate per EDU is $65 per EDU, which is comparable to other regional communities. Assuming 160 EDUs in year 1 (2025) at startup, this monthly rate results in an initial annual operating revenue of $124,800. This is sufficient to cover projected annual operating expenses including $62,877 for operation, maintenance, and repair (OM&R) and $60,142 for debt service. This monthly sewer rate of $65/EDU translates to an annual cost per household of roughly $780, which represents 1.37 percent of the median household income in Terrebonne ($56,736 per 2020 U.S. Census Data). At the outset in 2025, the DSCR is calculated to be 1.03 and then later increasing as revenues grow while debt service remains the same year over year. In Scenario 2 (no grant funding assumed), the monthly sewer rate must be higher at $100 per EDU cover the additional debt service for capital construction. Assuming 160 EDUs in year 1(2025) at startup, this monthly rate results in an initial annual operating revenue of $192,000. This annual revenue is sufficient to cover projected annual operating expenses including $62,877 for OM&R and $127,328 for debt service. This monthly sewer rate of $100 translates to an annual cost per household of roughly $1,200, which represents 2.12 percent of the median household income in Terrebonne ($56,736). Because this percentage exceeds 2 percent, this monthly rate of $100/month is expected to impose a substantial' economic hardship on households. At the outset in 2025, the DSCR is calculated to be 1.01 and then later increasing as revenues grow and debt service remains the same year over year. If the District is formed and moves forward with the design and construction of the proposed Phase A wastewater collection system project, an SDC will need to be established to help cover costs from this project and allocate funding for past and future capital projects. A detailed SDC analysis is beyond the scope of this preliminary engineering report. This SDC analysis is only preliminary and will need to be reassessed when actual costs, funding sources, etc., are better known. Outlined below is a preliminary SDC analysis to provide a rough estimate of the SDC that would be assessed to Terrebonne customers who connect to the wastewater system. The reimbursement and improvement components below need to be considered first, in order to estimate the total SDC described at the end of the list: Reimbursement — The reimbursement fee recovers the cost of the customer's fair share of existing system assets with available capacity for wastewater collection, transmission, 14 August 2022 1 297-2509-008 Economic reasibility Statement Terrebonne Sanitary District treatment, and disposal. The reimbursement fee is based on the value of available capacity for wastewater infrastructure that is already constructed or under construction. For Terrebonne, the reimbursement SDC would reimburse the District for costs incurred to construct the proposed Phase A collection system. The estimated Phase A project cost is $3.8 million. The Phase A infrastructure includes pressure sewer mains and the 8-inch force main to Redmond, which is designed to serve the entire Terrebonne community (1,054 EDUs) at full-buildout. Assuming this reimbursable construction cost is divided among the 1,054 EDUs projected at full buildout, the estimated reimbursement SDC would be approximately $3,634 per EDU. Improvement -- Improvement SDCs recover costs associated with capital improvements to be constructed in the future. While phasing plans have been prepared for expanding the collection system to outlying residential areas in Terrebonne, the extent and timing of these projects is uncertain. To allocate funds for future system expansion, improvement costs are assumed to be $3 million. Assuming this improvement cost of $3 million is divided among the 1,054 EDUs projected at full buildout, the Improvement SDC would be approximately $2,846 per EDU. Total SDC -- The total SDCs are the sum of the reimbursement and improvement components. The estimated total SDCs would be $6,480 ($3,634 + $2,846). This total represents a worst -case scenario and assumes the entire project would be paid for through a state or federal loan. Although not guaranteed to be awarded to the District, this amount can be reduced through applying for and acquiring grants to effectively reduce the overall direct capital expenditure by the District. For instance, if the District was to secure $1.8 million in grant funding for Phase A initial reimbursement costs for Phase A would be reduced by $1.8 million and the total SDCs would equate to $4,773. Please see Table 3-4 below for a summary of estimated sewer rates, SDCs, and revenues for both scenarios. Table 3-4. Estimated Sewer Fees and initial Revenues Monthly Rate per EDU SDC Hookup Fee per EDU Initial Operating Revenues (160 EDU in 2025) Initial SDC Revenue (160 EDU in 2025) Scenario 1 Scenario 2 ($1.8 M grant funding) (no grant funding) $65 $100 $4,773 $6,480 $124,800 $192,000 $763,616 $1,036,861 Annual Sewer Cost % of MHI 1.37% 2.12% L•DLI = equivalent dwelling unit; M = million; MHl = median household income; SDC = systern development charge 3.5 Annual Operation and Maintenance Costs 08tM expenses are typically categorized into three types: Personal Services — This includes utility billing services, personnel costs, administrative costs, accounting, legal fees, interest, utilities, office supplies, printing, and professional services among other tasks. An estimate of $5/EDU/month was used. Because of the small scale of the district area at startup, it is possible that a third -party billing and customer call center service may be beneficial for the District. Estimates from an existing third -party vendor were provided at $1.90/EDU/month for a 2,000-customer system. An additional $3.10 was included to cover August 2022 E 297-2509-008 15 Economic Feosibility Stotement Terrebonne sanitary District economy of scale for the small Terrebonne system, as well as for miscellaneous services performed by District personnel. This results in a budgeted annual administrative expense of $10,185 assuming 160 EDUs at startup in 2025. Materials and Services — Contractor estimates were solicited for the materials and services portion of the OM&R costs. These were estimated to be $127.50/EDU/year for preventative maintenance, reactive maintenance, repair and replacement, and tank pumping plus an additional $1,600 per year for the collection system maintenance such as pressure main repairs, valve maintenance, odor control, etc. This results in a budgeted annual OM&R expense of $23,340 assuming 160 EDUs at startup in 2025. City of Redmond Treatment Charges — The proposed wastewater collection system in Terrebonne will benefit from the treatment services provided by the Redmond Wetlands Complex, The District will be responsible for paying related wastewater treatment charges to the City of Redmond. Per coordination with the City of Redmond, the charge will be approximately $2.63/1,000 gallons/month based on metered discharge volume. Assuming a conservative average daily flow of approximately 200 gallons/day/EDU, the budgeted amount for treatment charges (in 2025) is $16.29/EDU/month or $196/EDU/year to cover these City of Redmond charges to the District. This results in a budgeted annual expense of $33,182 for Redmond treatment charges assuming 160 EDUs at startup in 2025. .6 Debt Repayments For purposes of estimating long-term debt service on the infrastructure loans, a 30-year loan was assumed with a 0.96 percent interest rate and a 0.5 percent annual fee on the principal balance. The anticipated long-term loan amounts for both scenarios were decreased by the funding available through SDCs, as described in Section 3.4 and shown in Table 3-4. Therefore, a secondary short-term loan is also included in both budget scenarios based on a 5-year term, 0.60 percent interest rate, and 0.5 percent annual fee on the principal balance. The intent of this secondary loan is to use SDC revenues for deferred coverage of construction costs and thus minimize the long-term loan principal balance and the related annual debt burden on the District and its customers. These loan terms and rates are typical of Clean Water State Revolving Fund loans for design or construction in small communities below the statewide MHI, as published on the DELI. website for the period of April 1 through June 30, 2022. According to the 2020 American Community Survey (U.S. Census Bureau Table 51901), the MHI for the Terrebonne Census -Designated Place is $56,736 and the statewide Oregon MHI was reported to be $65,667. Assuming $1.8 million in grant funding is awarded to the project (Scenario 1 as shown Table 3-2) the proposed debt service is calculated to be $60,142 per year. Assuming no grants are awarded to the project (Scenario 2 as shown in Table 3-3), the proposed debt service is calculated to be $127,328 per year. Table 3-5 below compares the debt repayment information for both scenarios in Year 1 of system operation (2025). 16 August 2022 1 297-2509-008 Economic Feosibitity Statement Terrebonne Sanitary District Table 3-5. Debt Repayment Scenarios Scenario 1 Scenario 2 Estimated total project cost $3,830,320 $3,830,320 Assumed Grant Funding $1,800,000 $0 Long-term CWSRF loan balance, repaid over 30 years $1,366,704 $2,893,459 (0.96% rate with 0.5 % annual fee on principal balance) Short-term CWSRF loan balance, repaid within 5 years $763,616 $1,036,861 (0.60% rate with 0.5% annual fee on principal balance) Net revenue available for debt service $61,923 $129,123 Proposed debt service $60,142 $127,328 Initial DSCR (1.00 minimum) 1.03 1.01 Debt Service Coverage Ratio is expected to improve over time as revenues increase with added connections and debt repayment remains the same CWSRF=Clean Water Stater Revolving Fund, DSCR=Debt Service Coverage Ratio .7 Deserves In both scenarios, an additional $100,000 is allocated in the long-term loan amounts for the purpose of establishing a debt service reserve. A debt service reserve is an amount specifically set aside to cover debt payments in the event of a disruption of cashflows to the extent that debt cannot be serviced. This debt service reserve is a key component of a project finance model and is usually required by lenders. In Scenario 1, this $100,000 reserve is 4.7 percent of the $2.1 million total loan principal and roughly 1.5 times greater than the $65,778 annual (long-term) debt service. In Scenario 2, this $100,000 reserve is 2.5 percent of the $3.9 million total loan principal and roughly 72 percent of the annual (long-term) debt service. With this initial debt service reserve allocation, the end fund balance is kept at or above $80,000 for all years in both scenarios. In both scenarios, $20,000 is set aside per year as capital outlay toward the future replacement of short- lived infrastructure assets (see Table 3-6). For this system, these include a magnetic water meter, pH meter, sampling station, mainline control valves, air release valves, and service valves. It is conservatively assumed that these items may require replacement within 20 years, although they will likely function adequately well beyond this timeframe. Table 3-6. Short -Lived Asset Reserve Item Quantity Replacement Cost Subtotal Replacement Interval Annual Allocation .......... Magnetic Water Meter 1 $7,000 $7,000 20 $350 pH Meter 1 $500 $500 20 $25 Sampling Station 1 $500 $500 20 $25 Main Control Valves 40 $3,300 $132,000 20 $6,600 Air Release Valves 5 $2,000 $10,000 20 $500 Service Valves 100 $2,500 $250,000 20 $12,500 �$20,000 Total Annual Allocation August 2022 1 297-2509-008 17 Economic Feasibility Statement Terrebonne Sanitary District 3.8 Onsite Connection Casts There are four basic scenarios for onsite upgrades that will be necessary for customers to connect to the proposed STEP collection system. The effluent pump sizing and related onsite upgrade costs for properties over 5 EDU will need to be determined on a case -by case basis. These are summarized below in Table 3-7, with cost ranges based on multiple contractor estimates. Table 3-7.Onsite System Upgrade Scenarios and Estimated Costs Estimated Onsite Upgrade Scenario Description Costs (to Property Owner) R1 Residential property with a good -condition septic tank requiring retrofit installation of a $8,250—$13,750 ProPak system (BPPIODD, PF1005 pump) R2 Residential property with a poor -condition septic tank requiring replacement with a $15,000—$25,000 Prelos Processor C1 Commercial property (3--5 EDUs) with a good -condition septic tank requiring retrofit $8,500—$14,500 installation of a ProPak system (BPP30DD, PF3010 pump) C2 Commercial property (3-5 EDUs) with a poor -condition septic tank requiring replacement $16,000—$27,00 with a 3,000-gallon septic tank and ProPak system (BPP30DD, PF3010 pump) While these onsite system upgrade costs may be a financial burden for some property owners, there are several strategies the District can consider to ease this burden. DEQ has initiated a new program called the Onsite Septic Financial Aid Program (OSFAP), which provides grants to low- and moderate -income residents for onsite septic system repairs and upgrades to connect to public sewer. Once formed, the Terrebonne Sanitary District board will be eligible to apply for OSFAP funding on behalf of future Terrebonne customers who will need financial assistance. Other customers who do not qualify for these grants may be able to finance these onsite upgrades with a line of credit that is secured by equity in their property. 3.9 Sc.ln'tmary The need for a public wastewater system in the commercial core of the Terrebonne area (Phase A) is well established. The economic, public safety, and environmental health risks with continued use of onsite wastewater disposal systems are serious. Installation of a wastewater system would help businesses operate reliably and would facilitate development of new housing, jobs, and commerce in the community. The proposed STEP collection system and interconnection with the City of Redmond Wetlands Complex will provide Terrebonne with a reliable, quality wastewater system that will maintain regulatory compliance and meet the needs of the Terrebonne community into the future. The key to implementing the proposed wastewater system improvements is the District's ability to acquire low -interest loan funding and grant funds. This will be critically important to keeping SDCs and monthly user rates affordable. In addition, the District will need to secure a high level of customer participation in the Phase A service area in order to secure loan funding, generate sufficient operating revenues, and cover operating expenses including debt service. Once formed, the District will also have the authority to enact an ordinance that compels all developed properties in the district to connect to the system, if necessary. If connection to the system is not mandated by ordinance, the District should consider strategies to incentivize connections within the service area, such as early hookup incentives, SDC payment plans, and financial aid programs. August 2022 1 297-2509-008 18 w '22WU 1` 4 0 C ATTACHMENT E Security Deposit (form SEL 704) Security Deposit Special District Formation or Reorganization ❑X Formation ❑ Annexation District and Precinct Information Name of District T ERRERONNI:-. SANITARY DISTRIC] ❑ Withdrawal Number of Precincts in District Amount of Deposit per Precinct 1 $100 SEL 704 rev 01/18 ORS 198.775 ❑ Dissolution Total Deposit (max of $10,000) $100 Chief Petitioners /We hereby declare if the costs of the attempted formation annexation, withdrawal or dissolution of f`ERREBONNE :SANITARY district exceeds the deposit, I/we will pay to the county treasurer the amount of the excess cost (ORS 198.775) Name print Signature ' Residence Mailing Address if different City Zip Code City State Zip Code State ( $ Amount of Contribution/Value of Secured Deposit Kind of Contribution* ash ❑ Bond ❑ Other Security Deposit A Name print Signatu �r 2 , 0�xl Residence Mailing d ress if different City ` State Zip Code City State Zip Code r Amount of Contribution/Value of Secured Deposit Kind of Contribution* $50 Cash ❑ Bond ❑ Other Security Deposit Name print Residence City State I Zip Code Amount of Contribution/Value of Secured Deposit Signature Mailing Address if different City Kind of Contribution* ❑ Cash I ❑ Bond State I Zip Code ❑ Other Security Deposit Continued on the reverse side of this form ,.: Person/Organizations Providing Any Part of Cash/Security Deposit Name print Signature Residence Mailing Address if different City State Zip Code City State Zip Code Amount of Contribution/Value of Secured Deposit Kind of Contribution* Cash I Q Bond Q Other Security Deposit Name print Signature Residence Mailing Address if different City State Zip Code City State Zip Code Amount of Contribution/Value of Secured Deposit Kind of Contribution* Cash I Q Bond Q Other Security Deposit Name print Signature Residence Mailing Address if different City State Zip Code City State Zip Code Amount of Contribution/Value of Secured Deposit Kind of Contribution* E] Cash Q Bond Q Other Security Deposit Additional Description *Provide additional description of security deposit below, on the back of this form or on separate sheets. Additional contributors may be listed on separate sheets and attached. County Clerk County Clerk's Certification RE: Proposed Formation — Terrebonne Sanitary District A petition has been filed with the Deschutes County Clerk's office to form the Terrebonne Sanitary District. The Deschutes County Assessor's office has reviewed the attached petition and found that of the seventeen (17) signatures submitted and notarized on the attached petition for the proposed formation of the Terrebonne Sanitary District, there are fifteen (15) valid signatures of landowners within the proposed district. 1, Steve Dennison, Deschutes County Clerk, do hereby certify that the petition meets the requirements of ORS 198 and may move forward to the hearing process by the Board of County Commissioners. Dated this 311t day of August, 2022. Steve Dennison Deschutes County Clerk 1300 NW Wall Street Suite 202 1 PO Box 6005 Bend, Oregon 97708-6005 (541)388-6547 • elections@deschutes.org 1 (541) 388-6549 - recording@deschutes.org www.deschutes.org/clerk DESCHUTES COUNTY ASSESSOR'S OFFICE CARTOGRAPHY DEPARTMENT 1300 NW Wall Street, Suite 204 1 Bend, Oregon 97703 Office: (541) 388-6508 1 Fax: (541) 382-1692 Website: https://www.deschutes.o[g/assessor Property Info: https://dial.deschutes.oLg/ August 30, 2022 Steve Dennison Deschutes County Clerk Re: Petition for Creation of Terrebonne Sanitary District Please be advised the attached petition meets the requirements of ORS 198. Sincerely, TE� co -;, Gregg Rossi Chief Cartographer Deschutes County Assessor's Office, Cartography Dept. 1300 NW Wall St. Suite 204 1 Bend, Oregon 97703 PO Box 6005 Bend, Oregon 97708 Tel: (541) 617-4703 1 Fax: (541) 382 w 1692 TO: Deschutes County Board of Commissioners FROM: Will Groves, Planning Manager DATE: September 1, 2022 SUBJECT: Land Use Compatibility, Terrebonne Sanitary District Formation The materials contained in the petition to propose to form the Terrebonne Sanitary District. This district formation is consistent with Title 18, Deschutes County Zoning Ordinance, and Title 23, Deschutes County Comprehensive Plan. The Terrebonne Community Plan, Appendix A to the Deschutes County Comprehensive Plan, includes the following relevant goals and policies: Public Facilities Goal Ensure water and sewage treatment systems encompass the appropriate scale and cost. Sewer Facility Policies 9. Allow uses and densities that can be served by an approved on -site wastewater treatment system, until such time as a community sewer system is available. 10. Set minimum lot sizes adequate to ensure that on -site systems do not exceed the capacity of the land, until such a time as a community sewer system is available. 11. Support replotting Hillman Plat lots to create lots large enough to accommodate an approved on -site wastewater treatment system. 12. Help identify funding for a sewer feasibility study. 13, Support the development of a community sewer system if needed to protect public health. 14. Review Community Plan policies related to public services if a sewer system is proposed. In addition, there are general policies that address this district formation'. 1 Policy 3.6.1 "encourages the formation of special service districts to serve rural needs rather than have the County serve those needs." 11 7 NW Lafayette Avenue, Bend, Oregon 97703 1 P.O. Box 6005, Bend, OR 97708-6005 (541) 388-6575 @ cddgdeschutes.org @ www.deschutes.org/cd MEETING DATE: October 5, 2022 SUBJECT: PUBLIC HEARING - Consideration of Order No. 2022-051, Accepting Petition to Form Terrebonne Sanitary District and Setting Final Hearing RECOMMENDED MOTION: Move approval of Order 2022-051 BACKGROUND AND POLICY IMPLICATIONS: The chief petitioners filed a petition to form Terrebonne Sanitary District. The Assessor's Office and County Clerk certified the petition and Community Development reviewed it for consistency with the County's comprehensive plan and the Terrebonne Community Plan and found it consistent with both. The BOCC must hold a hearing on the petition where any interested person can be heard and discuss accepting the petition and approving Order 2022-051, which sets the date for the final hearing. The petition and exhibits are attached to the draft Order 2022-051. BUDGET IMPACTS: None ATTENDANCE: David Doyle, Legal