Stimulus loan to fix sewer woes

Wednesday, Sept. 9, 2009

The La Plata Town Council will hold a public hearing Sept. 15 to gain citizen comments about issuing bonds that will pay for the construction of a sewage pumping station, a force main and gravity sewer lines on Willow Lane. The public notice in a local newspaper states the town is seeking $35 million in bonds but actually only $6 million are being sought that will be funded with federal stimulus dollars in the form of a low-interest loan from the Maryland Department of the Environment Maryland Water Quality Financing Administration, said Town Manager Daniel Mears. The town had to advertise the $35 million amount in the legal notice because that is the maximum amount of bond funding that the town must seek in order to establish a special taxing district in town, he said. The money collected from property owners in the Heritage Green special taxing district will be used to pay back the MDE loan, he said.

La Plata received the maximum amount of federal stimulus dollars, Mears said.

"This project scored highly enough by the MDE to receive the maximum amount of federal stimulus money allocated to a jurisdiction," he said. "That speaks to the importance that MDE places on this project."

The council is also holding a public hearing on a resolution to create the taxing district during the Sept. 15 meeting, Mears said.

Part of the bond funds will be used to decommission the current Willow Lane and Phoenix Run pumping stations, Mears said. It is way past time to fix the constant sewage overflow problem caused by the Willow Lane pumping station, said Ward 4 Councilman Joe Norris.

"It's a great benefit to the town to get this problem squared away," he said, adding the federal stimulus money is much appreciated. "Otherwise, the town might be able to afford to do this."

The project is part of a package of infrastructure improvements the town plans for the Heritage Green special taxing district — a 1,037-acre parcel that will contain the Heritage Green mixed use development to be built of Rosewick Road, Norris said.

The town will pay back the MDE loan by collecting money from property owners who live or own businesses in the special taxing district, Norris said. Folks who purchase homes or develop commercial or industrial property in Heritage Green will pay the special tax to the town that will be added to a household's annual property tax bills.

Heritage Green will contain about 3,000 residential units, a golf course and several commercial properties, according to Harry Lapas of GP Homes, the developer of the property.

Lapas agreed during a meeting with the council in May to the special taxing district because he said the Willow Lane pumping station is crucial to the development of his property.

Potential property owners will be told about the special taxing district when they decide to purchase a home or land in Heritage Green, Lapas said during the meeting.

The tax rate will be based on the type of home or commercial property that is built and would be fixed for the 20-year life of the stimulus loan, said Keenan Rice, president of MuniCap Inc., a financial services firm in Annapolis, during the May meeting.

The town will hold a lien against the property in the event the tax is not paid, Hale said.

The money collected for the special taxing district will be deposited in a fund in the town budget that will be backed by revenues from the town's wastewater and water supply systems, town officials said.

The council is expected to adopt the bond ordinance and special taxing district resolution at the Sept. 22 meeting at town hall, Mears said.

It is important to finally get the sewage overflow problem fixed, Mears said, adding the town is under a MDE consent decree to finish the project by Dec. 31.

"This is a vital project for the town to complete," he said. "If we don't get it done the town can be fined for every sewage overflow."

nmcconaty@somdnews.com