Oak Harbor loses big bucks as residents sink sewer LID

Residents of the posh Scenic Heights area in the south end of Oak Harbor have rejected a proposal to create a local improvement district, or LID, to finance a connection to the city’s sewer system.

That means much — but not all — of the $200,000 the city invested into the process, and the staff hours spent in the last year, have been in vain.

City Administrator Thom Myers put a positive spin on the rejection. He pointed out that the city sewer system will have to be extended to the area someday, one way or another.

“A good portion of the engineering work is useful,” he said. “It’s a loss to the city only to a degree.”

Oak Harbor City Council members passed an LID formation ordinance last month. That gave residents a 30-day period in which to lodge protests to the proposal. Under law, the LID process cannot proceed if owners of 60 percent of more of the total assessed value protest.

By the end of the protest period on Dec. 5, staff received protests totaling 73 percent of the assessments. “It’s effectively dead,” Myers said.

Landowners in the Scenic Heights area approached the city at the beginning of the year and asked for help installing a sanitary sewer system to their properties. Most of the properties rely on septic tanks, though a couple of systems failed and the homes had to be hooked into the city on an emergency basis.

In order to aid the residents, city council members passed a letter of intent last summer to form a LID in the Scenic Heights area. An LID is basically a way to finance an improvement — such as sidewalks or sewage pipes — within a certain area.

The city invested $200,000 into the process, which went to consultants for legal work, preliminary engineering, an appraisal and bonding work.

The 75 or so residents in the area, however, became disenchanted with the proposal after receiving estimates of how much the project will cost them. The total cost of the project is estimated at $2.35 million. The average, estimated cost per lot was $15,000, but that number varies widely from property to property.

Myers said there is still interest among residents to install sewers in the area, but they just didn’t like the LID process. He said the LID process adds about $300,000 to the cost of the project because law requires a 10 percent guarantee fund, plus there are bond costs.

According to Myers, city staff will look at alternative ways to bring a sewer connection to the area. One alternative, he said, may be for the city to build the sewer system and then charge residents for the work through a modified latecomers’ agreement.

City officials are especially interested in residential development in the south end of Oak Harbor in order to avoid encroachment on the Navy base.

“One thing is for sure,” Myers said, “ we have to decide how we want to respond to development in that area.”

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