Thank you to everyone who came to the District’s informational meeting on April 8th regarding the upcoming plant upgrades.

In this newsletter, which is the third in the series regarding the required upgrades to the District’s wastewater treatment plant, we will address some of the questions asked in the District’s informational meeting.

“What is the increased cost going to be on my bill?”

The full costs of the Project are estimated to be $32,000,000. The District currently anticipates the receipt of Leading Idaho Funding (LIF) grant funds in the estimated amount of $13,771,044. The District anticipates utilizing a bond or loan to finance the remaining project costs of approximately $18,228,956.

The District has placed a ballot proposition on the upcoming May ballot which would authorize the issuance of a sewer revenue bond in the maximum principal amount of not to exceed $18,500,000. The District currently anticipates receiving an interest rate of approximately 2.5% with a repayment period of not to exceed 40 years.  With those parameters, the anticipated annual payment to be made by the District would be approximately $734,321.39. This amount would be repaid through the monthly/quarterly rates billed to the District patrons.

Although the District was required to include an estimated average annual cost of the proposed bond total average cost in the ballot proposition of approximately $92.41 on the ballot, such amount is an estimate only and was calculated as by statute, which assumes the repayment of the bond from property taxes. As the District’s proposed sewer revenue bond would be payable solely from the revenues of the wastewater system, there will be no property tax associated with the payment of the proposed bonds.

Assuming the approximate annual repayment cost to the District is $734,321.39 and the number of ERs (equivalent residence use) anticipated to be in use, the estimated increased cost is anticipated to be between $20.00 to $40.00 per month per ER. A single-family residence is billed at 1 (one) ER. However, the District is looking at a phased approach to the rate increase over a period of 2-3 years.

Assuming the bond is approved, the potential rate increase is anticipated to be between 10% – 15% for the upcoming year, which could only be imposed by the District after a public hearing. A single-family residence would see an approximate $5.49-$8.24 increase per month (approximately $66 – $99 per year) in their sewer charges in the upcoming year. Following the issuance of the bond, the District would have the ability to provide more precise information surrounding the dollar value of the rate increases and any needed additional increases as necessary for repayment of the bond.

Additionally, certain scenarios could decrease the estimated average monthly and annual costs including: a lower interest rate, a bond principal amount of less than $18,500,000, interest “forgiveness” from a lender, and an increased number of ERs.

“What happens if the bond does not pass?”

If the bond does not pass, the District is still required to complete the upgrades. The upgrades have been triggered by changes to the District’s Idaho Department of Environmental Quality (IDEQ) Permit issued in 2018.

If the bond is not approved by a majority of District voters, the District may have to pursue judicial confirmation to incur the debt. This avenue would result in additional legal costs. Additionally, as there are deadlines associated with the grant funds awarded to the District and similar deadlines associated with a potential IDEQ loan (which would provide an anticipated interest rate of 2.5% on the bond), this route may result in the loss of grant funds and the loss of the 2.5% interest rate.

Without the grant funds in the estimated amount of $13,771,044, the District would be required to cover the full cost of the Project, which is estimated to be $32,000,000, rather than the reduced portion of the Project in the estimated amount of $18,228,956. The increased cost would necessitate higher increased costs per ER.

According to IDEQ, the District could potentially maintain the LIF grant funding provided the District can enter into a funding agreement and provide a phasing plan, which would need to be approved and accepted by IDEQ, prior to June 30, 2024. However, if the bond fails, the District will still need to procure the funds necessary to complete the Project, which may be accomplished through judicial confirmation or larger rate increases to cover the expenses to meet the IDEQ requirements.

The District is currently at the top of this year’s IDEQ list for funding eligibility. If this year’s funding window is missed, the process for applying for funds would start over and the District is not guaranteed eligibility or placement on next year’s IDEQ list.

“Is there the possibility of the District working with or combining the wastewater system with the City of Sandpoint?”

The District has had discussions with the City of Sandpoint, but it is not a current option with the timeline the District must meet to comply with the IDEQ Permit, nor has such an option been shown to be cost effective at this point in time.

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  Current View of Lagoons

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  Current View of Land Application Site

OFFICIAL STATEMENT SETTING FORTH THE BALLOT PROPOSITION

To comply with effluent limits as required by federal and state law, the Kootenai-Ponderay Sewer District intends to acquire and construct certain improvements to the District’s wastewater system, including the: (i) construction of a mechanical treatment facility to improve effluent quality and provide a sufficient level of treatment to comply with discharge standards for discharge to Boyer Slough, and (ii) the expansion of the District’s land application reuse site by planting additional trees, making irrigation improvements and relining the storage lagoon to increase summer irrigation (the “Project”).

Pursuant to Resolution No. 4- 2024, adopted on March 28, 2024, the District has called an election to be held on Tuesday May 21, 2024, for the purpose of submitting to the qualified electors of the District the question of whether to finance a portion of the costs of the Project through the issuance of sewer revenue bonds of the District in the principal amount of not to exceed $18,500,000. The proposed bonds will mature over a period of not to exceed forty (40) years and will be payable solely from the revenues of the wastewater system.

The interest rate anticipated on the proposed bonds is two and one-half percent (2.5%) per annum; however, the actual interest rate may vary. The range of anticipated rates is from approximately zero percent (0%) to approximately four percent (4%).

The total amount to be repaid over the life of the proposed bonds based upon an anticipated principal amount of $18,500,000, an interest rate of 2.5%, and a 40-year maturity is $29,372,855.56 (comprised of $18,500,000 in principal and $10,872,855.56 in interest). The estimated average annual cost to the taxpayer of the proposed bond total average cost to the taxpayer is $92.41.

As the proposed bonds shall be payable solely from the revenues of the wastewater system, there will be no tax associated with the payment of the proposed bonds (e.g. $0.00 per $100,000 of taxable assessed value, per year, based on current conditions). The Kootenai-Ponderay Sewer District currently has outstanding bonded indebtedness in the amount of $0.

Please contact the office if you have additional questions or concerns. The office is open 8:30 a.m. – 5:00 p.m. Monday through Thursday but is closed on Friday. Contact information:

Office Phone: (208)263-0229

Mailing Address:

Kootenai Ponderay Sewer District
P.O. Box 562
Kootenai, Idaho 83840 

Email:  [email protected]                                      

The next regular meeting of the Board is Monday, May 13th, and will begin at 6:00 p.m. in the District Meeting Room at 511 Whiskey Jack Road.