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County hears ideas on Riddle Farm EDU issue

(April 10, 2015) If there is one place in Worcester County business leaders and elected officials want to see growth, it’s at Riddle Farm along the Route 50 corridor at the Berlin WalMart.

If there’s one reason that growth has been seen nearly everywhere but Riddle Farm, county officials are pointing at high equivalent dwelling unit costs.

EDUs are a measure of wastewater treatment plant processing capacity. Riddle Farm has its own treatment facility, packed with 267 EDUs, according to the county, that are more or less just sitting there.

In order to avoid charging taxpayers for the infrastructure costs, the county opted to enter into a public/private partnership where a private company would collect the fees associated with providing the services and the county would receive a portion of the proceeds.

The fees, margins and profits ballooned the cost to a bit more than $23,500 per EDU, with a purchase price of about $18,600 and a public component of almost $5,000.

Businesses balk at the price, Worcester County Economic Development Director Bill Badger told the Worcester County Commissioners Tuesday.

He said that reluctance is because areas such as Berlin charge $16,000 per EDU, plus businesses with a heavy water demands, such as a restaurant, might require 10-15 EDUs worth of service.

“Developers will pass that cost down to the end users. Texas Roadhouse showed some interest in the area but faced substantial issues,” such as EDUs and parking Badger said.

In 2014 the commissioners hired Columbia, Md. consulting firm Municap Inc., to review the situation and provide options other than the current cash on the barrelhead structure.

Municap presented three options, the first of which was, naturally, to keep the existing system in place.

The second implements tax increment financing, which assumes an interested tenant would pay the $18,600 price and would allow the county to recapture its $5,000 share through the increase in property tax revenue the business would hopefully generate.

“We haven’t done too many in Worcester County,” Badger said, “There have been 200 done well in the area and one in Wicomico that didn’t do so well,” which is the one everyone seems to remember.

Municap acknowledged the cost to the county with the counterpoint being if that the development opportunity was lost, no tax increase would be possible anyway.

The third option would allow the EDU purchaser to either pay the entire cost up front, or finance the county’s $5,000 portion over 20 years as a special, interest-bearing, tax.

This option would, in the end, cost the county little but the effort to levy and collect the tax.

A fourth option emerged through the commissioner’s discussion: renegotiate the entire deal. County attorney J. Sonny Bloxom said renegotiation was indeed possible, but Badger, speaking after the meeting, warned against this path.

“A renegotiation agreement is not ideal. The private sector is waiting for a product, and people don’t wait. We’re dealing with a finite amount of time. It’s not wise to renegotiate,” he said.

The commissioners voted to send Municap’s proposals to the water and sewer committee for further review.

 

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