February 10, 2001


TO: The County Board of Arlington, Virginia

FROM: Ron Carlee, Acting County Manager

SUBJECT: Advertisement of a Public Hearing for an Ordinance establishing the "Chain Bridge Road Service District"


RECOMMENDATION: Authorize advertisement of a Public Hearing for the Board Meeting of March 17, 2001 to adopt an ordinance creating the "Chain Bridge Road Service District".

ISSUES: Whether to create a service district for the purpose of levying a tax on property in the district to generate revenue to fund the extension of public sewer to property in the district.

SUMMARY: The County Board is authorized by state law to establish service districts, by ordinance, to provide government services, including sanitary sewer services to areas of the County. A public hearing must be held prior to the enactment of any ordinance which establishes a Service District. Staff recommends that the County Board hold a public hearing to receive comments from citizens regarding the creation of the "Chain Bridge Road Service District". The service district would levy an ad valorem property tax on real estate in the district, as defined in the ordinance, to recover capital costs incurred during construction of a low-pressure sanitary sewer system installed to provide sanitary sewer service to the residents of the service district.

BACKGROUND: A private developer is currently modifying an existing residential structure at 409 Chain Bridge Road, and the resultant increase in sewage cannot be addressed by a conventional septic system on the existing lot. The Arlington County Environmental Health Bureau has authorized the developer to install an experimental wastewater treatment and disposal system to accommodate the increased sewage within the site’s constraints. Both the developer and the Arlington County Environmental Health Bureau have indicated that they would prefer that the property be served by public sanitary sewer, if available. This is consistent with the County’s Watershed Management Plan which encourages the replacement of private sewer systems with public sanitary sewers where fiscally and practically feasible.

Several of the remaining property owners along Chain Bridge Road have expressed interest in the potential for extension of sanitary sewer service to their properties. Approximately eighteen (18) residential units on twenty-five (25) lots along Chain Bridge Road in Arlington County do not have any sanitary sewer service and are served by septic systems.

Some of the properties on Chain Bridge Road have recently been diagnosed with failed septic systems. The other functioning systems have the potential to fail at some point in the future. Consequences of failed septic systems vary widely according to degree of failure and property characteristics. Some of these properties have had or will have significant difficulties repairing the systems and may be faced with prohibitive financial or technical obstacles accordingly. Public sanitary sewer service would provide these properties with a reasonable alternative to costly or impractical repairs if and when their septic systems fail.

Section 18-7(f)(2) of the County Code provides that "any extension of public sewer required hereby shall be made at the expense of the owner of the premises to be served." There does not appear to be any precedent for publicly funded extension of sewer service within Arlington County.

The developer at 409 Chain Bridge Road has offered to design and construct a low-pressure sanitary sewer system which could also accept sewage from the remaining properties in the proposed service district. Any construction would have to follow all relevant Federal, State, and Local standards. Upon completion of the improvements, the developer would convey the facilities to Arlington County for ownership and maintenance of the improvements.

The resulting service district would then serve to collect taxes from the members of the district and reimburse the developer for the costs borne during design and construction. It is anticipated that taxes would be assessed on an "ad valorem" basis for a proscribed period (likely 5-7 years), and would function as an addendum to the base real estate tax rate. The capital cost to design and build the new system is estimated at $300,000.

Although all of the properties in the district would be taxed to recoup the costs associated with design and construction of the proposed sewer, it is proposed that none of the properties be required to connect to the system until such time as their existing septic systems failed. Property owners desiring or required to connect to the system would be required to pay all costs traditionally associated with connection to a public sewer system. These costs include system connection fees ("hook-up fees") and costs associated with modification to their existing plumbing systems. Plumbing modifications necessary to connect to this manner of sewer system would include purchase and installation of a grinder pump unit and installation of a sanitary sewer service lateral from their houses to the sewer. It is estimated that typical costs to individual property owners will range from $10,000 to $15,000 for connection fees and plumbing modifications.

Staff has contacted the property owners in the proposed service district, and has advertised and conducted two informational meetings with the affected property owners. Eight of the seventeen property owners within the proposed district were represented at one or both of the meetings, and response from these property owners has been generally supportive. Additionally, staff has sent letters to the property owners on February 1, 2001 to notify these individuals of their opportunity to present their opinions regarding the proposed service district to the Board at the March 17, 2001 meeting.

Upon enactment of an ordinance creating the Chain Bridge Road Service District, further County Board action will be necessary to implement and support the service district. The district is anticipated to begin to collect taxes in 2002, and the Board will have to approve appropriate agreements to authorize collection and distribution of fees. The County Board also will be required to levy taxes upon the property owners of "The Chain Bridge Road Service District" in accordance with a tax rate set at the annual budget meeting beginning in Spring 2002.

SERVICE DISTRICT INFORMATION: The proposed Chain Bridge Road Service District would comprise twenty-five (25) properties along Chain Bridge Road in Arlington County. The affected properties are identified in Exhibit A. A map delineating the proposed "Chain Bridge Service District" is attached as Exhibit B.

The 2001 property assessments for the proposed service district total $35 million. It is anticipated that the large development at 409 Chain Bridge Road will dramatically increase the valuation of this service district as a whole. The enhanced valuation of the district as a whole would lower the tax rate necessary to recoup costs over the term of the agreement, and would serve to mitigate the financial burden which the neighboring property owners would bear.

Staff has compiled some estimates of the actual financial impact which each of these properties will incur as a result of the proposed service district. These estimates are based upon design and construction costs of $300,000. According to the 2001 property valuations, the additional tax rate levied upon the constituents of the service district would be 17.0 cents for a five (5) year term and 12.1 cents for a seven (7) year term. Based upon preliminary estimates of the assessment for the development at 409 Chain Bridge Road upon completion, and assuming that assessments on other properties in the district remained constant, the additional tax burden for the constituents would be 11.3 cents for a five (5) year term and 8.1 cents for a seven (7) year term.

FISCAL IMPACTS: There are no fiscal impacts because all costs associated with design and construction of the sewer system will be recovered through future real estate tax levies upon the property owners within the Chain Bridge Road Sanitary Sewer Service District.