Sunrise Beach, Mo. — Businesses in the Village of Sunrise Beach are desperate for a sewer solution.
A group of business owners attended the Monday, Sept. 12 trustees meeting to find out more about the status of getting a municipal wastewater treatment system in the ground and just what area that system will cover. The message was clear - move
forward.
The Issues
Time and money are the obstacles hindering progress on the town's wastewater woes.
1. Businesses can't keep waiting.
"With DNR (Missouri Department of Natural Resources) on the hunt right now, the longer we wait, the options get less, not more," said Sunrise Beach businessman Matt Sutcliffe. "There are businesses that are not going to survive waiting this out ... You're going to see businesses close up and not make it."
The municipality's budget is based almost entirely on sales tax revenues - there are some minor police-related revenues. The village does not collect any property tax.
Ron Duggan said he needs help "desperately" right now due to the legal action his business, Captain Ron's Bar & Grill, is facing from the Missouri Attorney General's Office for its wastewater treatment system. Duggan said they have to expand the wastewater treatment facility for the restaurant and bar.
Hired by Duggan, Schultz & Summers Engineering (SSE) have come up with an individual solution for Captain Ron's — at a price tag of $50,000-$55,000. But even that solution is only temporary, expanding enough to buy more time, but it would still have to be pumped out on busy weekends.
However combined with the loss of Cannon Smoked Saloon to fire (since relocated to Laurie), Duggan indicated that it could be a struggle to fund even the temporary solution, and was looking for any help the village could give.
Home to the Lake of the Ozarks Shootout, the restaurant and bar is one of the biggest sales tax contributors to the small town.
But Captain Ron's was not the only one in trouble.
The campground owned by Dave Buehler, in attendance at the meeting, was shut down for part of the summer due to sewer issues, a direct loss of sales tax for Sunrise Beach. Rick Escobedo of Tortilla Flats Restaurant & Lounge said their situation is not desperate yet, but that it is becoming a concern.
Sutcliffe, owner of Bear Bottom Resort which is another big sales tax contributor, urged the board to move forward. His business is not facing action from the state, but he wants to expand and can't without a larger wastewater treatment system.
West Shore Landing developers, Ron Cragun and Bruce and Jan Adams, are also pushing for sewer to benefit their commercial project at Lake Road 5-41.
U.S. Department of Agriculture Rural Development (RD) provided the bulk of funding for the city's drinking water system. The second phase is currently under
construction.
RD has stated in a letter to Sunrise Beach that it will not commit to funding sewer with low interest loans and grants until the water system is complete and has been in
operation for one year.
That pushes the timeline for any municipal wastewater system funded through RD to early 2013.
2. Residential user fees must be reasonable.
To get government agency financing, it is required that the village's residential user fee be a minimum of 2 percent of the median household income (MHI). With an MHI of approximately $27,679, the monthly sewer bill would be about $46 per month.
About $38-41 was the amount originally promised to voters when revenue bonds were passed in 2006.
The unobligated portion of the city's capital improvement sales tax revenue could, however, be used to lower the residential sewer bill.
Sutcliffe also reported that the committee, through water attorney Bill McCaffree, had found that the idea for businesses to pay a higher rate to help offset residential user costs was acceptable to RD.
This could have an exponential effect for the town. A central sewer system helps create a more attractive environment for businesses. If there are more businesses, it means not only more sales tax revenue but also more sewer customers paying that higher rate.
The Status
Sutcliffe was on the committee that recommended the board make the "Mid Town" area phase one.
The committee's recommendation was based on a preliminary engineering report (PER) from Midwest Engineering. Two months ago, the board hired Olsson Engineering at a cost of approximately $18,000 to do a new PER of the north area of town, termed City Hall Ridge.
A second study, looking at the south end, by Olsson was considered Sept. 12. It was the topic for a closed session portion of the meeting, but was ultimately tabled.
Board members have said they are simply looking for the best plan. Without the entire scope of funding available for any plan, chair Curt Mooney said they are taking the time to search for the best numbers to make it affordable for residences.
After the July meeting in which Olsson was hired, another engineering firm came into the picture for the village, the previously mentioned SSE. With the board's stated intention of looking for better numbers, they offered to review Midwest's existing PER.
SSE has now entered into an agreement with Midwest to work on the Sunrise Beach municipal project. The joint venture will include SSE designing the wastewater treatment facility and coordinating with the appropriate government agencies to get funding.
Getting government funding in place is SSE's specialty. Since 1998, it has obtained almost $93 million in grants and loans through USDA Rural Development, Missouri Department of Natural Resources and Community Development Block Grants (CDBG).
SSE founding partner Stan Schultz shared the results of their review at the Monday night meeting.
The findings were positive, in that Midwest had followed the funding agency outline, the proper documents had been filed with the agencies, detailed layout maps had been completed and a realistic cash flow had been forecasted. The unit prices for the construction work were also conservative in SSE's opinion.
What's Next
SSE advised the board that DNR money may be a better option for funding. Through Midwest, the village has applied to DNR for funding a system for the entire Highway 5 corridor, just as it has with RD.
According to Schultz, the application for the overall system scored in the top 7 percent of proposals made to DNR for that cycle. The entire system was too expensive - more than $7 million - to be funded to the extent needed to make it feasible for the village.
The overall system can, however, be built in stages, Schultz said.
He recommended the board identify its scope for phase one by developing a target area of 100-120 residences (considered the "magic" minimum number to receive the best grant funding from funding agencies) and identifying what commercial customers wanted sewer out of the largest 25 potential commercial customers.
The committee that has studied the issue believes that target area is Mid Town, not City Hall Ridge.
Mid Town and City Hall Ridge are different proposed first phases to get the overall system started.
According to the committee's findings based on Midwest's PER, City Hall Ridge would cost an estimated $1,888,171 to construct, but Mid Town hits that 100 potential residential user mark that makes it eligible for much more in low interest loans and grants. City Hall Ridge has 68 potential residential users.
In addition to the 100 residential users, Mid Town also has more potential commercial users, 64 compared to City Hall Ridge's 39. Mid Town's overall construction cost is an estimated $3,559,000.
Sutcliffe and other business owners have indicated they would like to see the board start pushing to get Mid Town funded, instead of paying more money out of the capital improvement sales tax revenues for other engineering firms to do more studies.
Existing businesses have indicated their willingness to pay a higher user rate to help offset residential costs - for now.
If the village cannot move forward with sewer, many businesses will either close or be forced to go out on their own for individual solutions, Sutcliffe said. And if businesses resolve their wastewater issues on their own, they have no incentive to then support a municipal system, especially one in which they subsidize lower residential rates.
Conflict of interest
Discussion turned ugly at the Sept. 12 meeting when concerns were raised that the city attorney had a conflict of interest in the matter of advising the board on the proposed phasing of the sewer system.
West Shore Landing developers Ron Cragun and Bruce and Jan Adams expressed their concern about the board meeting in closed session at the July meeting with their longtime attorney Greg Williams. In that closed session, they hired Olsson Engineering to study City Hall Ridge.
The developers/realtors said Williams owns property within the City Hall Ridge area that is being marketed for commercial development. The City Hall Ridge area would include Williams' property but exclude the West Shore Landing property. The larger proposed Mid Town area would include both.
Bruce Adams said it was a concern to them that a "competitor" was advising the board in closed session. Even if Williams were strictly sticking to his role as city attorney when in closed session, there is still an appearance of conflict of interest, he said.
Adams formally objected to closed door sessions about sewer with Williams "under the guise" of personnel issues and asked that his objection be included in the minutes.
Cragun added that it appeared there was "politicking" going on behind closed doors.
Williams said that there was no one on the board who was unaware that he was a landowner in the village.
"It is not a conflict," he said, adding that the trustees had been "fully disclosed" and were "fully aware" of his situation.
"I was tasked with developing alternatives," said Williams about the board's search for a feasible plan to sewer the city. As a result, he has had discussions not just with Olsson but also with SSE and village business owners.
Hiring Olsson to study City Hall Ridge is merely part of the search for the best course of action, according to the board.
"He (Williams) is not running the project," trustee Debby Stoller said.
According to chair Curt Mooney, the board had two previous interviews with Olsson; it was not something that just happened.
Bruce Adams also objected to the decision to spend $18,000 to hire Olsson being made in closed session. Any talk about sewer, with or without Williams, should have been made in open session, he said.
Jan Adams added, "We were under the impression ... that the whole sewer issue had been tabled."
Cragun said that the $18,000 should have been used for the actual sewer system instead of funding another preliminary engineering report.
The open session discussion centered around how to phase a sewer system for the Highway 5 corridor. It was tabled to get more information on whether higher commercial rates could be used to make residential rates lower to make the recommended Mid Town area acceptable.
The board then went into closed session and decided to hire Olsson to look at City Hall Ridge. The City Hall Ridge area was a potential first phase that was developed by the committee, but was not recommended due to its low potential for grants and low interest loans.
Trustee Ray Kline said the open session discussion and the closed session decision were two separate items. Just because they are having City Hall Ridge studied does not mean that Mid Town is out.
It is unclear how the board arrived at the decision about which phase to study further as none of the trustees verbally indicated a preference for any of the proposed phases in its lengthy discussion in open session. The committee provided the information from their study for the first time publicly at that July meeting.
