Posted Wednesday, August 21, 2019

Conditional Use and Sewer in the Route 230 Corridor

Updated information

Below is an updated article on the Route 230 project. We are working with our engineer to provide a link for a better map. If a map is needed right away, a map is available at the township office.

The Route 230 Corridor has been zoned for commercial development since 1979, however, it has seen minimal development because the current zoning must be updated to reflect current industry uses. To accomplish this zoning update, the Township is proposing additional uses to the C2 zoning located along the route 230 Corridor.

Why conditional use? Conditional use allows for economic growth with the maximum protection for the Township because we can impose reasonable conditions on any proposed development. What may the additional uses be? The Township is proposing adding logistics centers, business and professional parks and mini-warehouses to uses allowed by conditional approval in the C2 zoning district.

Why would the Township do this? The Township needs to create a tax base to offset the loss of TMI tax and fundraising revenue ($100,000.00) and to fund outstanding liabilities such as road work ($1,200,000.00 annually per our engineering study) depreciation expense ($700,000.00 per year per the audit) and the DEP mandated 537 Plan (sewer costs $27,500,000.00). Additionally, while the Township has historically flown under the radar of regulatory agencies, that is no longer the case. DEP met with the Township this year and indicated that they expected to have the 230 Corridor project completed by the Township -and- that they were not giving us ten more years to do so. The current schedule in the 537 Plan requires this project to be completed in the next seven years.

The Township has had to absorb almost $700,000.00 in expenses for floodplain compliance (FEMA mandated), implement On Lot Septic pumping (per DEP), which required hiring staff, and Stormwater and Chesapeake Bay Pollutant Reduction Plan mandates (EPA and DEP) which also required hiring staff and funding projects. These are all unfunded mandates; that is, they are programs we have to legally implement, but there is no funding provided so we have to pay for it out of existing revenues. We simply cannot continue to absorb these costs within our existing budget. The amount of revenue received remains static and the amount of expenses increases and this is not a sustainable business model. The Township can only increase revenue by increasing taxes, obtaining grant funding or through growth of the tax base (development). Nobody wants a tax increase, and while the Township has been extremely successful in obtaining grant funding, there are simply not grant programs available for all of the requirements the Township has. Development may not be popular, but the fact remains that the Township must allow limited growth to meet its financial and regulatory obligations. The Township currently has five full-time positions that have been -and- must remain vacant because it cannot afford to hire.

Relative to sewer, the Township has two separate sewer projects that must be accomplished in the next seven years per DEP. The first is to provide sewer to the Londonderry Estates Development. This is expected to cost approximately $1,500,000.00 and be completed in the next three years. The larger issue for the Township is the route 230 Corridor. That sewer project is expected to cost $26,000,000.00. This area must have public sewer per the Township’s DEP approved 537 Plan. The 537 Plan is the plan for providing public sewer in the Township and areas are prioritized based upon the number of failing systems and amount of attendant water pollution. All flows are expected to go to treatment plants in Derry Township. The cost of constructing these sewer lines is not something the Township can afford. The Township’s general fund budget is approximately $2,200,000.00 per year. The debt service on the sewer lines would be as much as our annual general fund budget. The Township cannot tax our residents to pay for these costs, the tax burden would be too high and devalue our real estate. The annual increase in local real estate taxes could be as much as $1,200.00 for each home with an average assessed value of $100,000.00. It would be unfair to take this approach and tax all township residents to pay for this sewer line because most of them would not get the benefit of public sewer service they would just get the expense. The Township does not have the borrowing base capacity to borrow the amount of funds required for this project. The short answer is that the Township cannot tax nor borrow its way to the completion of this DEP mandated project.

Alternatively, the Township is proposing to partner with developers in the 230 Corridor so that the cost to construct the main line is paid for by the developers (not our residents) and that capacity will be created in this line for the rest of the Township’s mandated obligations in this area. Developers have pledged $15,000,000.00 to construct the main sewer line and pump stations. This line would extend from the sewer plant on Swatara Creek Road to Route 230 and end near Hoffer Road. There will still be $11,000,000.00 in outstanding improvements required of the Township’s 537 Plan and we are planning on creating a fund from the increase in tax base to help offset the debt service for meeting those obligations. The lines, once constructed, would be dedicated to Derry Township Municipal Authority, thereby removing the long term liability for lines from Township residents.

The fact of the matter is that the Township is being forced to install the sewer lines in the 230 Corridor per DEP. The real issue is that we don’t want our residents to have to pay for the entire cost of these lines.

Additionally, and this is important, the Township recognizes that residents may not want any development, but that development will occur as soon as the sewer lines are installed so we want our residents to get the benefit of developers dollars not have the developers get the benefit of our resident’s dollars. The point is, these lines have to be installed in the next seven years, what remains to be determined, is who pays for them? Residents or developers? We want the developers to pay for as much of the line as possible so our residents don’t have to absorb the entire cost. We all live here, so we want the least amount of financial burden possible.

Questions we have been asked.

Will the additional uses to the C2 zoning district make my taxes go up?

The answer is, the additional zoning uses will not increase your taxes, and we are trying to create a tax base so they don’t have to go up in the near future either. Taxes are based upon use so if you are currently taxed at a residential rate, that tax rate will remain in place.

Will I have to connect to the sewer line?

The answer is that by current code, if the sewer line is within 150 feet of your home, you will be required to connect to it. The homeowner is responsible for the cost of the lateral line from the main line to their home.

The Township is sensitive to, and understands that residents who have recently installed a new system or currently have a functioning system, will not want to connect to the sewer line. Accordingly, the Township is exploring if we can legally make this connection optional for residents along the 230 Corridor and may be able to do so because the line is proposed to be funded with private developer dollars.

We still have more work to complete on this to determine if this is possible, however, we are exploring the option with the state and sewer providers and hope to have answers soon. If the Township has to borrow PA Vest funding to build this line there would be no option, everyone would be required to connect that was within 150 feet of the line per the PA Vest program regulations. So, if we do not partner with developers there will be mandatory connections.

What does it cost to connect to sewer and are there any programs to assist homeowners?

Those costs typically can range from $14,000.00-$18,000.00 for the lateral line connection from the house to the main sewer line if it requires a grinder pump, $5,000.00 -$10,000.00 if it is a gravity connection. Which connection will be required and actual cost will depend on the topography where your home is located. The Township has met with funding agencies (PA Vest and USDA) and there are low interest loans and/or grants for people required to connect to public sewer. The low interest loans are available through PA Vest and are open to all residents as long as they are not in bankruptcy. The PA Vest program has loan amounts up to $25,000.00, the interest rate is 1.75% and it can be paid back over 20 years. For example, if you borrow $15,000.00 from Pa Vest, the monthly payment would be $75.00, if you borrow $25,000.00 the monthly payment would be $124.00. There are no prepayment penalties in these programs.

The USDA program has some grant funding for people over 62 and for those in lower income brackets. The USDA program has grant funding (based upon eligibility) up to $7,500.00 and loan amounts up to $20,000.00. The USDA programs can be combined for a total of $27,500.00. The interest rate on USDA Loans is 1% and can be paid back over 20 years. USDA did not provide a sample payment schedule as was provided by Pa Vest. The Township will have information for both programs available to residents.

Can the Township refuse to install the public sewer line?

The answer is no. We have been informed by DEP that they expect the 230 Corridor part of the 537 Plan to be completed and they have also indicated that they are not giving the Township ten more years to complete it (this has been in the 537 Plan since 1988). If we do not do it, DEP will issue a consent decree and legally force the Township to install the line. The clean streams laws of DEP go back to the mid to late sixties and the state mandated 537 Plan was enacted by the Township in in 1988. The Township does not have the option of refusing to implement the 537 Plan requirements. Elected officials that refuse to implement DEP consent decrees have actually been incarcerated personally.

If DEP is mandating this, are they going to help the Township pay for it?

Pa Vest is the program to assist Townships and other Municipalities with the cost of implementing the 537 Plan requirements. The PA Vest program provides low interest loans and up to a 20% grant component of their program. The issue the Township faces is that the cost of the 230 project is expected to be $26,000.000.00, so even if we received the amount of grant funding typically awarded (and there is no guarantee of that) we would still have to be able to fund $20,800,000.00 in project costs. PA vest has indicated that this project would probably receive minimal grant funding and most likely be funded through loans. Additionally, DEP does not consider a Township’s ability to pay for these projects, they simply mandate their completion.

Conclusions

The economic pressures of unfunded mandates from the state and federal government have placed the Township in a position of needing to find partners to meet its obligations and increase our tax base so that it will not have to place additional tax burdens on current residents. The changes in zoning are necessary to reflect current industry uses, mitigate the impact of unfunded mandates, and to allow managed growth in an area that has historically been zoned for commercial development, while maintaining the rural nature of the rest of the Township. The township is exploring if it can legally make the connection to any sewer in the 230 Corridor optional for existing residences that have properly functioning systems and has found funding options through PA Vest and USDA for residents to utilize to connect to public sewer. There has been a lot of information provided here, please read it thoroughly and contact the Township Manager at 717-944-1803 with any questions. The Board of Supervisors will have a public hearing on this matter on September 03rd at its regularly scheduled board meeting. That meeting takes place at 7 pm at the Township Building.