News and Tribune

June 6, 2014

Jeffersonville sewer project debate jeopardizes large project

Board votes to halt most design work on sewer interceptor project

By ELIZABETH BEILMAN
elizabeth.beilman@newsandtribune.com

JEFFERSONVILLE — A large downtown hotel and retail development project could be in jeopardy, following concerns of a sewer board member about a pipe proposed to run underneath the development.

The board voted 2-1 Thursday for Jacobi, Toombs and Lanz Inc. to stop all design work on the combined sewer overflow, or CSO, interceptor project — except for the dimension modeling — until July 3 so that the sewer board has time to review the firm’s odor control plans for the project, which features large pipe.

“Give us a chance to sort this out,” Bill Saegesser, one of the three sanitary sewer board members, said at the board’s Thursday meeting.

However, the property for the Gateway Development Project cannot be purchased until rezoning for it is approved — an approval in the hands of the city council that won’t move forward until sewer board members say they’re happy with JTL’s designs.

“We want to make sure that everything is set in stone, everything is done correctly the first time,” Councilwoman Connie Sellers said.

The deadline for White Reach Development — the company heading the Gateway Project — to purchase the land from the city’s redevelopment commission is July 30. Corporation Attorney Les Merkley said if the council doesn’t approve 17 parcels of rezoning to highway commercial classification by that date, the property can’t be up for rezoning again for six months.

The odor control plans were drafted with Webster Environmental Associates Inc. and Lanz presented them as part of the 80-percent-completed design plans for the interceptor project.

Saegesser, who is appointed by the city council to the sewer board, said he wants a guarantee that there will be zero odor from the pipe. He said JTL’s proposal could cost the city more money if odor isn’t controlled and something else has to replace it instead.

“I don’t understand how we spend this much money and say, ‘Maybe it won’t stink,’” Saegesser said.

In a separate interview earlier in the day, Waste Water Department Utility Director Len Ashack said it was essentially too early in the process to figure out exactly how odor would be controlled, but it would be handled as plans progress. Jorge Lanz, JTL president, said he can’t guarantee design plans for the interceptor will eliminate odor, but thinks the possibility for odor is low.

The CSO interceptor is part of Jeffersonville’s consent decree, a legal agreement with the Environmental Protection Agency and Department of Justice to minimize the number of times combined stormwater and sewage empty into the Ohio River. A CSO event happens when the sewer pipes can’t handle the amount of rainwater plus sewage and it spills into the river.

Lanz, whose firm is designing both the interceptor and the gateway development project, said that his attorney did not find a conflict of interest from JTL’s involvement in both projects.

“I’m designing for two agencies and doing what I thought was best for the city of Jeffersonville,” he said.

Saegesser made a motion to suspend design work on the interceptor until August, which was eventually amended to accommodate a better timeline. Dale Orem, also a city council-appointed board member, seconded the motion.

Mayor Mike Moore, also a sewer board member, accused Saegesser of playing politics and stalling the Gateway Development Project, a proposed development at the corner of Indiana Avenue and 10th Street visible from Interstate 65 that could host a hotel and several restaurants.

“[That’s] $25 million in the entrance of Jeffersonville,” Moore said.

Sellers said that the council doesn’t want to approve the rezoning until the sewer board is comfortable with JTL’s plans. If rezoning is approved and construction of buildings begin on the property but the sewer board doesn’t OK the engineer’s designs until after that construction has started, the city might have to spend more money tearing up what’s been built to redo the interceptor.

“I want to make sure the sewer board is happy with this,” Sellers said. “Waiting a couple more weeks is fine.”

Orem said he doesn’t think the city can afford to go back and change its plans.

“What we don’t want is to lose a valuable project,” he said.

Moore accused the council of stalling on the project, too.

“We’ve got so much growth going on in Jeffersonville,” he said. “It’s sad that a few council members are getting joy out of stopping this project.”

Sellers said that is not the council’s intent, nor is it the council’s intent to hold onto the redevelopment-owned property originally purchased for a canal project in hopes that those plans could revive with a new administration.

“I’m not against development, and none of the other council members have said they’re against development either,” she said.

Saegesser decided to bump up the timeline a bit and give the board until July 3 to review odor control plans, a discussion with JTL that can happen at the sanitary sewer meeting on that date. That gives the council some time to pass the rezoning before the closing deadline for White Reach.



FUNDING ISSUES

Moore said he was unhappy with Saegesser for telling the council that the sewer board’s bonding capacity was $16 million lower than the $37 million estimated price for the CSO Interceptor.

The most recent reports that Umbaugh and Associates, a financial advising company, released did not include drainage funds or sewer capacity fees as income when considering bonding power.

In its studies dating back to 2009, Umbaugh has always included those two factors, which totals $35 million in bonding capacity fees today.

“This isn’t something new or different,” Moore said in a news release issued this week. “To suddenly not use those revenues makes no sense. Our sewer utility is financially strong.

However, Saegesser said in an interview that neither of those sources are guaranteed.

“The only funds that we have available to us are sanitary sewer funds,” he said.

The drainage board has not given any verbal agreements that it would give money to the sewer board, and Saegesser said he doesn’t want to get into the business of doing that anyway.

“I think the chances of that happening are slim to none,” he said.

Capacity fees are paid to the city when a new sewer is built on an empty property. Umbaugh calculated the amount raised in capacity fees at Jeffersonville’s current rate of growth in its report.

Though he said that River Ridge Commerce Center is growing at a rapid pace and more capacity fees are likely to come in, the amount is still hypothetical.

“There’s no guarantee those fees will be available,” he said.

Saegesser said that if all capacity fees are used to pay back bonds, there won’t be any money for future sewer expansion and sewer rates will have to be hiked again.

Ashack said he is confident that the already-approved sewer rate increases — the last of which comes in January — will be sufficient to pay back bonds over the next 20 years. The bonding capacity that Umbaugh quoted is based on potential sources of revenue, but doesn’t necessary mean the city must use all of those sources, he said.

“The numbers are close enough for use to move forward with this project,” Moore said in the release. “It would be irresponsible for us to ignore our obligation with the EPA. This project has been discussed and planned for several years. We don’t need any more delays.”