Financing & Funding
Sewer Assessment Ordinance
Town Council Mission Statement
“Our mission is to protect the Town of Barnstable’s quality of life and unique character, engage our citizens, and enact policies that respond to and anticipate the needs of our community.”
Click to view: Town Council Approved Sewer Assessment Ordinance
How will implementation of the plan be paid for?
The estimated cost of the 30-year plan is approximately $1.4 billion, including construction, borrowing costs and inflation. The Town has already made significant progress in meeting this funding need. Through legislative action at both the state and local levels the town has created over 50% of the estimated funding sources needed for this program. For the remaining resources needed, the Town has developed an equitable and affordable financing plan to fully implement the plan.
- The Town has created an existing dedicated revenue stream that will provide an estimated $600 million over the 30-year implementation timeline. This revenue stream consists primarily of proceeds from the hotel/motel room occupancy tax, short- term rental occupancy tax, local meals tax and a new excise tax of 2.75% that applies to all types of lodging on Cape Cod
- As new customers come on-line to the public sewer system revenue generated from user rate revenue is estimated to contribute over $200 million to the plan
- With existing spending and revenues accounted for, the remaining funding needed to implement the plan is approximately $600 million over thirty years. The Town is proposing a two-part strategy to meet this need:
- A Sewer Assessment Ordinance adopted by Town Council created a sewer assessment that applies only to properties that will be receiving sewer service. The sewer assessment of $10,000 per sewered property at the start of the program. This amount reflects only a portion of the actual cost of sewering the property. It is also less than the potential increase in property value an owner will benefit from by being connected to sewer service. Impacted property owners have the option of paying the full amount upfront, or amortizing the assessment over 30 years, to be included on quarterly tax bills.
- The remaining funding needed to fund sewer construction could come from a reduction in the annual operating budget or a debt exclusion override to authorize an increase in the property tax levy, or a combination of both. This portion of funding would apply to all property owners in Town
Click to view: Sewer Assessment Ordinance
Learn more about: Financing the CWMP
State Tax Credit For Sewer Connection Costs
As the Town constructs the buildout of the public sewer system property owners will be required to connect to the system. The connection cost is the responsibility of the property owner. The Commonwealth of Massachusetts offers a state tax credit to qualifying homeowners that may offset up to $6,000 of the connection cost.
Property owners qualify if:
- You are not a dependent of another taxpayer;
- Own residential property in Massachusetts;
- Occupy the residential property as your principal residence.
You’re allowed a credit for expenses you paid to:
- Repair or replace a failed cesspool or septic system to comply with state sewer system requirements;
- Connect to a municipal sewer system to follow a federal court order, administrative consent order, state court order, consent decree, or similar mandate.
Nonresidents do not qualify for this credit since the property must be an owner-occupied principal residence in Massachusetts. However, former Massachusetts residents who have to file Massachusetts nonresident tax returns may claim their unused prior year credit carryovers.
Part-year residents qualify for the full credit if the property is an owner-occupied principal residence in Massachusetts.
Qualified expenses you paid to bring a failed system into full compliance include:
- An upgraded system
- An alternative system
- A shared system
- A connector to a sewer system
Generally, only expenses for services or costs in connecting or hooking-up a sewer line from your property to the public sewer line qualify when calculating the credit. If you obtained a loan to finance a sewer line hook-up or connection, you can include it in calculating the Title V credit if you are required to or are allowed to connect to a town or city sewer system to cure a failed system.
If you voluntarily repair or replace a cesspool or septic tank, you cannot claim this credit since it is not considered a “failed” system under Title V. When calculating the credit, do not include betterments or assessments (improvements) related to constructing, extending, improving, or maintaining a new or existing sewer system and/or a water treatment system for a city or town either.
To qualify for the credit:
- The credit is 40% (.40) of the costs (not to exceed $15,000). The total amount of the credit cannot exceed $6,000.
- When calculating the credit, subtract any interest subsidies you received from Massachusetts.
- You can claim the credit for the year the repair or replacement work is completed.
More information on this state tax credit can be found on the State’s website here: https://www.mass.gov/service-details/view-residential-property-tax-credits
We recommend you consult with your tax preparer to see if you will qualify for this tax credit.
Frequently Asked Questions | FAQ's
SEWER ASSESSMENT ORDINANCE
A sewer assessment is a charge to a property owner for a specific benefit received (a public sewer).
It can be up to 100% of the property owner’s proportional cost share of the project’s cost. It can also be subsidized so that the charge is less than 100% of the proportional cost share or capped at a maximum dollar amount. Extending sewer service is necessary to meet federal clean water standards in our estuaries. All residents benefit when the Town’s water resources are protected.
Therefore, a shared cost approach is used to equitably fund the costs of building infrastructure to provide sewer service. Under the shared cost approach, a portion of the cost is paid by the sewer assessment charged only to new sewer users; another portion of the cost will be provided by state and federal grants (in the form of subsidized low interest loans and principal subsidies on loans); visitors to the Town will contribute by paying the local room occupancy taxes (including the Cape Cod and Islands Water Protection Fund Excise), and local meals tax; and the remaining portion of the cost will be paid out of the Town’s General Fund. This shared cost approach mirrors the method used to fund previous infrastructure projects.
The Sewer Assessment Ordinance is intended to charge property owners who will be connected to new sewer service, as outlined in the Comprehensive Wastewater Management Plan, a fair share of the cost of the infrastructure needed to provide that service. Property owners connecting to sewer service will have the convenience and reliability of modern sewer service without the costs of maintaining and ultimately replacing a Title 5 septic system.
Properties connected to sewer service may experience a 6-13% increase in home value1, and an increase in the marketability of the property. In addition, roadways where sewer mains are installed will be repaved.
1 Based on recent studies performed for Mt. Pleasant Township, PA and Old Lyme, CT.
Studies are available on the Town’s website at: https://barnstablewaterresources.com/comprehensive-waste-water-management-plan/finance-funding/
Revised April 6, 2021
The Sewer Assessment is a charge that will be applied to the owners of properties that have one or more residential or commercial sewer units that are eligible to be newly connected to sewer service under the sewer expansion plan.
A residential sewer unit is defined as the number of dwelling units on a residential lot.
For example, a two (2) family dwelling unit on a residential lot will be assessed two (2) sewer assessments. A commercial sewer unit is defined by the amount of sewer flow on the property based on Title 5 of the State Environmental Code, 310 CMR 15.203, system sewage flow design criteria; whereby every 330 gallons per day of flow equals one (1) sewer unit. A property owner will be charged the same number of sewer assessments as there are residential or commercial sewer units on the property.
The Sewer Assessment does not apply to existing sewer customers in Town, or to any properties that are already eligible to connect to live sewer service, even if they are not yet connected as the sewer system is already available.
The Sewer Assessment represents the allocated cost of the sewer infrastructure that will be serving an owner’s residential or commercial property, as defined in #2 above.
Allocated cost is the sum of (a) 100% of the cost of general benefit facilities (i.e., main trunk lines, pumping stations) divided by the number of properties served by those facilities; and (b) 100% of the cost of special benefits facilities (i.e., adjacent sewer main tied into the main trunk line), divided by the number of properties served by those facilities. The combined cost allocated for the general and special benefit facilities will be capped at $10,000 at the beginning of the program and possibly adjusted for the inflation in construction cost annually thereafter.
The Sewer Assessment represents the lesser of (a) $10,000 or (b) the allocated cost of the general benefits infrastructure and special benefits infrastructure (see #3 above).
The Sewer Assessment does not include the cost of connecting a property to the sewer service located in the street. It also does not include the cost of decommissioning the current on-site system.
However the Sewer Assessment does cover the cost of the first grinder pump per sewer unit on the property, if needed to connect to the sewer system located in the street.
In addition to the Sewer Assessment, a property owner is responsible for the cost to connect their property to the public sewer system located in the street. Connection costs will vary based on property characteristics. It is recommended that property owners obtain at least three bids from a qualified sewer installer
Once sewer service is connected, property owners will be charged a sewer service user fee based on their water usage. The current typical residential sewer usage bill averages around $435 annualy and may vary based on water usage. If the property has irrigation, a property owner can install a deduct meter which will enable the property owner to realize a savings for water that does not enter the sanitary sewage system.
Finally, if the cost of expanding the public sewer system is not assessed 100% to the property owners scheduled to be connected to the system, a General Fund contribution will be required to fund a portion of the program. This results in a portion of a property owner’s property taxes being used to fund the program.
A property owner will be charged the Sewer Assessment when the sewer system serving their respective property becomes live. The Sewer Assessment will be issued at that time whether or not the property is immediately connected to the sewer system.
A property owner can opt to pay the Sewer Assessment all at once when due, or may opt to finance the Sewer Assessment and pay quarterly installments on their property tax bill over thirty years. In accordance with current policy, the Sewer Assessment under the thirty-year payback option would be amortized at an interest rate equivalent to 2% above the rate of borrowing, unless otherwise determined by the Town Council.
If the sewer assessment is added to future tax bills, a lien will be recorded on the property at the Registry of Deeds.
The lien for the sewer assessment may either be transferred to the new owner of the property or paid off at the time of transfer. If financing is involved with the property transfer, this will depend upon the financial institution.
The Board of Health has the authority to require property owners to connect to the public system when it becomes live. The Board of Health also has the authority to allow property owners to delay connecting depending upon their unique circumstances.
If you have a question or circumstance that you believe may necessitate a delay in connecting to sewer service, please call the Town of Barnstable Health Division at 508-862-4644 or email health@town.barnstable.ma.us.
All properties within the Phase 1 sewer area will be required to connect to sewer service and pay the sewer assessment.
The Board of Health and Department of Public Works are working closely with property owners to avoid situations where new Title 5 systems are installed in areas that will be receiving sewer service. If you have a question about your property, please call the Town of Barnstable Department of Public Works at 508-790-6400 or email dpw@town.barnstable.ma.us.
The de-commissioning and/or removal or filling of septic systems will be determined on a property- by-property basis.
This determination will be made at the time the property is being connected to the sewer system.
Connection costs may vary based on property characteristics. See Question #5 above.
Any property owner may opt to pay the Sewer Assessment in quarterly installments and have it added to their property tax bill over thirty years. The property owner may also opt to have the town connect their property to sewer service in the road, in which case the costs of connection also may be paid in quarterly installments over thirty years. See Question #5 above. An abatement process will be available if a property owner believes they were incorrectly charged for a sewer assessment or if the sewer assessment charge is incorrect.
The Town is also exploring the possibility of allowing qualifying homeowners the option to defer their sewer assessment if they meet certain income and asset limits. This would carry an interest charge and the sewer assessment would be paid at the time of a transfer in ownership or refinancing of the property.
If you are already eligible to connect to live sewer service you will not be charged a Sewer Assessment, even if you have not yet connected to sewer service.
The sewer assessments are determined using either a fixed uniform rate or a rate based upon a uniform unit method.
A fixed uniform rate shall be based upon the estimated average cost of all the sewers therein, according to the frontage of such land on any way in which a sewer is constructed, or according to the area of such land within a fixed depth from such way, or according to both such frontage and area. This method is better utilized when building out undeveloped land.
A uniform unit method shall be based upon sewerage construction costs divided among the total number of existing and potential sewer units to be served, after having proportioned the cost of special and general benefit facilities. Each sewer unit shall be equal to a single-family residence. This approach allows the Town to establish a cap on sewer assessments at the beginning of the program resulting in more predictability as to the financial impact to property owners.
The Town of Barnstable staff, Board of Health and Town Council are closely monitoring proposed Title 5 Amendments and Watershed Permit Regulations. The Town has a Comprehensive Wastewater Management Plan (CWMP), which has been rigorously reviewed and approved by state and local environmental agencies. It is our belief that the CWMP can act as the basis for the necessary Watershed Permits if approved by the state under the proposed regulations. Such effort on the part of the Town in combination with satisfying other aspects of the proposed regulations may relieve the residents of the Town from the requirement to install Innovative/Alternative Septic Systems on their property. We will continue to advise our community as these proposed regulations advance through approval and into implementation.
Case Studies - Special Benefit
Documents
Click to view: Sewer Assessment Ordinance
