The District’s contracted professional engineer has recently submitted a 33-page Report that details the impact on the Wastewater System of neglected equipment maintenance and lack of long-range planning (click here to see Report). The Report forecasts a $1.3 million price tag for Sanitary District ratepayers and outlines the risks if the called-for work is not completed.

The Water District is still being assessed by the engineer and a companion report from him is forthcoming.

Bottom Line

Simply stated, the Engineer’s Report estimates $1.3 million of unplanned costs to rate payers to bring the Wastewater System up to acceptable standards;

• Neglected Maintenance: A minimum of $90,000 is required to perform maintenance that has been neglected for several years.  (Additional costs should be expected as there are still a number of maintenance tasks that have been identified but not yet estimated.)

• Capital Improvements: $1.2 million of capital improvement projects need to be completed, 3 in first five years and 3 more as soon as those are done (page iv of report).

The need for 3 of these capital projects has been identified in various District records over the past several years but they have been continuously deferred by the previous District Manager and Board.  The delay in completing the projects has resulted in a cost jump from $230,000 to $600,000 and the need for the upgrades has become “most pressing”.

• Rate Increases: As a minimum, a $36/quarter increase in rates is anticipated to be required to fund the first 3 capital projects with an additional $36/quarter increase in rates to fund the second 3 capital projects.

Important Reminder: The $1.3 Million only addresses the neglect of the Sanitary District. A companion Report on the Water District is still forthcoming from the Engineer.

Engineer’s Report: Detailed Findings and Recommendations

1. There are are at least $90,000 of neglected maintenance tasks that need to be done.

2. $670,000 of capital improvements are required over the next 1-5 years (ASAP).

• The Webb Lift station has been known to be problematic for at least 3 years and was planned to be upgraded by 2022 at an estimated cost of $180,000 (see last year’s financial plan). This project, which the Engineer characterizes as “most pressing”, has not been done and the cost estimate has now doubled to $360,000.

• The Headworks Screening Upgrade was supposed to be completed along with the previous membrane replacement at a cost of $50,000 (see last year’s financial plan). This project has not been done and the newly estimated cost is now $250,000.

• The Collection System (I&I) Repairs is a long-standing known issue. 3,400 feet of sewer pipe was recently inspected with repair costs estimated at $70,000. Inflow and Infiltration (I&I) is a phenomenon whereby stormwater and groundwater enter the wastewater system due to cracked or deteriorating sanitary sewer pipes. The Report expresses concern that if not addressed, this excess stormwater water, which should drain into the ground or be routed to storm drains, increases the operating costs of the plants, shortens the life cycle of the equipment, will overload the Webb Lift Station (as it currently does during storms) and will potentially exceed the treatment capacity of the waste water treatment system (page 15).

Infiltration and Inflow are the largest concern in the collection system and warrant continued repair as funding is available. The collection system has several defects identified in the most recent video inspection that need repairs and the District should make a long-term commitment to budget for inspection of the remaining collection system (page 32).

3. $550,000 of capital improvements are required over the next 6-10 years .

• North and Asbury Creek Stations are both nearing 20 years old and each has served beyond their typical service life (page v).  Capital improvements are estimated at $250,000 each. Even though both of these stations have been known to be aging, neither of these projects have ever been identified by the Board in their Financial Planning efforts.

• $55,000 is required to TV Inspect 10,900 remaining feet of sewer pipe for I&I. In 2014, repairs were made to 5,400 feet of pipe. Since that time, i.e., during the Watershed Purchase years, no inspection or repairs were done even though I&I has been a known problem and $4,000/yr. has budgeted for the task.

In 2022, responding to pressure from Oregon’s Department of Environmental Quality, 3,400 addition feet of piping were inspected, resulting in $70,000 of estimated repairs (as noted above). The $55,000 price tag is just for TV inspection of the remaining 10,900 feet of pipes. Repair costs will depend upon what is discovered. If $70,000 is required to repair the damage in 3400 feet of inspected pipe, the proportionally appropriate cost to repair the damage in 10,900 feet of pipe is likely to be substantial, could be as much as $200,000.

Though not included as a capital project, the Report also calls for repairs (cost not estimated) to the Sally’s Alley Lift station (the face seal of the pump discharge is not seating). If that fix doesn’t work, repair estimates range from $5,000 – $30,000 depending upon the solution needed to resolve the problem (page 28).

The Engineer’s Report anticipates that all of these capital projects would be funded through additional loan debt. If the District were to fund the 1–5 year projects with a 20-year debt repayment schedule, the result would be approximately $36 per quarter increase in rates, per residential service. A comparable rate increase for the 6-10 year projects should be anticipated by 2030. So, an increase of $72 per quarter is likely (page v). And again, this does not include the cost of capital projects that will likely be required for the Water District.

The Arch Cape Sanitary District already has the highest sewer rates on the North Coast (Click here for Rate Detail).

City	Quarterly Sewer Rate (at 5,000 gallons/month usage)
Nehalem	$81
Astoria	$148
Cannon Beach	$172
Warrenton	$227
Seaside	$232
Arch Cape	$264 (not including the $36 + $36 rate increases for the new capital projects in the report)

District’s Maintenance Records

District Maintenance Records for 11 of the 15 pieces of equipment that make up the Wastewater System, along with a 1-inch-thick operations problem log, have been analyzed. Those records quantify the neglect that is referenced in the Engineer’s Report. Specifically for the period 2017-2022;

• 2 pieces of equipment had NO routine maintenance done for over 6 years. (Setting aside the cost of staff time, contractor fees and replacement parts associated with the 65 operational failures, bringing just these two pieces of equipment up to maintenance standard will cost $12,000, line 2 of page 31.)
• 2 pieces of equipment had routine maintenance intervals that were almost 4 years longer than manufacturer recommended.
• 2 pieces of equipment had routine maintenance intervals that were 2 – 2.5 years longer than manufacturer recommended.
• 5 pieces of equipment had routine maintenance intervals that were 1 – 1.5 years longer than manufacturer recommended.
• In the 6-year period of 2017-2022, there were 230 problems recorded in the Operations Problems Logs. 28% of these problems were caused by 2 pieces of equipment (MBR Blowers 1 & 2), and 28% of these problems were caused by 2 pieces of equipment (UV System 1 & 2). Quick fixes were always done, rather than an analysis of the underlying problem and appropriate action.
• A replacement mixer was purchased in 2018 for planned redundancy and is still crated.
• A replacement blower was purchased for planned redundancy in 09/2022 and is still crated.

Click here for summary chart. Click here for graphs of maintenance intervals.

Accountability

Accountability for the neglected maintenance and the lack of long-range planning is equally shared by previous District Manager and the two District Boards.

• District Manager’s Job Description: “Assure proper maintenance of pumps, valves and other plant equipment for proper operation. Evaluate equipment condition and makes recommendations and/or plan and schedule work for repair, rebuilding or replacement of installation.”

• Board Policy: “Evaluate the performance of the District Manager annually. Develop and approve long-range plan of growth and development for the District. Review and act on strategic plan, plans of operation and plans of action.”

Though the Engineer’s Report is focused on the Wastewater System, both the Water District Board and the Sanitary District Board are accountable. 

*** At Thursday evening’s Board Meeting, the Chair of the Sanitary District said that the Sanitary District Board takes responsibility for the Sanitary District’s part in the neglect. The Water District Board did not take any responsibility for the neglect. ***

The Water District staff is responsible for all inspection, maintenance, operations and planning related to the Wastewater system. With the previous District Manager spending time spearheading the purchase of the Watershed for the Water District Board, routine maintenance tasks and long-range planning for the Wastewater system were not done. The Water District Board is responsible for overseeing District staff in providing services to the Sanitary District as well as the Water District.

In May 2021, during the budget meetings (which included members of both Boards), the long-range financial plan was an item on the Agenda but wasn’t addressed.   A previous Board Chair/Finance Committee Chair expressed concern that no long-range planning had been done since 2016 and stressed its critical need in order to understand future requirements for equipment upgrades/replacement.  The Committee /Boards committed to work over the following 9 months to prepare a robust long-range plan for the next year’s budget process.  In January 2022, the status of the plan was on the Agenda of both Boards.   During each meeting, the previous District Manager stated that he was too busy to accomplish the task of completing the long -range plan.   (January 2022 Water Board meeting minutes – item V.d and ending public comment). The Boards took no action to have a long-range plan completed and the May 2022 budgeting process proceeded without any information about the true status of plant and equipment.

In August-September 2021, a Board member expressed concerns to the Sanitary District Board Chair about the lack of time that the District Manager was spending on Sanitary District tasks (August 2021 email stream).  In September of 2021, a presentation was made to both Boards identifying the risks associated with the District Manager not effectively managing the plant/equipment and recommending a set of management controls (Management Dashboard – pages 2 (IGA Log) & 5 of Minutes).  The concerns were dismissed by the Boards as “micro-managing” the District Manager.   

In Sept/Oct of 2022, an analysis of specific maintenance records that clearly showed the lack of equipment maintenance was brought to the Board Chair’s attention, along with recommendations.   Not only were those concerns and the associated recommendations ignored, but fees were charged to community members for public records requests to review additional maintenance records.  The records request process was then changed to make it more difficult to obtain records.

Note: The presentation of these concerns predated the Board appointments of Heather Newman, Chris Mastrandrea and Steve Hill.  They had no awareness of these issues and have no accountability for the lack of Board action.

A key contributing factor to the neglect of the Wastewater System was the 6 year-long process of purchasing the Watershed.  It is now apparent that the Boards and the previous District Manager allocated resources and time away from the core business of distributing drinking water and processing waste water.  As a result, rate payers will be carrying the financial burden of that distraction in terms of rate increases. 

In addition, the financial impact of the Watershed itself is still not known and there is no financial/operations plan in sight.  (See March 16^th recommendations from Forest Management Committee)  A previously approved financial plan that highlighted the financial risks of operating the Watershed has been discarded by the Board.  And even though the Watershed was purchased over 9 months ago, there is still no detailed approved budget, no financial plan and no clarity in how current expenses are being paid.

And even with the Engineer’s Report and Maintenance Records, the District continues to pay the previous District Manager $400/month to be available to help.

We have a rare opportunity to bring about change!

Due to various factors, we have a rare opportunity to bring some financial stability to the District:

• There were two Boards resignations over the past several weeks, one from each of the Boards.

At Thursday’s Board meeting, the Sanitary District Board appointed Casey Short (previous Board Member and Budget Committee Chair) to fill the vacancy through June when the term ends. This is a meaningful step forward! Casey’s financial management expertise is well known and highly regarded. Casey is also running uncontested for a Sanitary Board position in May.

At Thursday’s Board meeting, the Water District Board decided to advertise for the open Board position. It was suggested that at least one of the uncontested candidates for a Water Board position in the May election would be interested in stepping in sooner and should be appointed.

• Phil Chick’s recent resignation opens the position of District Manager. In addressing the Board at Thursday’s meeting, the Engineer spoke highly of Matt Gardner’s (the Interim District Manager) proactive approach to identifying and responding to problems, as opposed to the reactive approach of the previous District Manager. The Water District Board appointed Matt to the job of District Manager.

• The Water District received Covid Funds to purchase the Watershed with approximately $800,000 – $900,000 still unspent. The current Board has targeted the use of those funds to upgrade the Watershed. However, the Engineer’s Report highlights the pressing need to upgrade the sanitary infrastructure which, along with water infrastructure, is the intended objective of the COVID legislation. The Board could open discussions with Business Oregon to express the pressing need for updating the sanitary infrastructure, and potentially the water infrastructure as well, and to explore if/how much of the COVID funds could be used in that regard, so as to reduce loan requirements that would burden taxpayers.

• Our most impactful opportunity will come on May 16 with new County elections.  7 of the 10 Board seats are up for election.   More to come on the candidates.