Overland Park & Leawood

As costs mount for sewer expansion, Johnson County wrestles with funding issue

Johnson County residents will pay an extra $3.55 a year on their wastewater bills, because after much anguished consideration, the Johnson County Commission decided to spend an extra $10.9 million for a sewer district expansion in southern Johnson County.

The extra funding amounts to a 71 percent increase over what was supposed to be a $15.4 million project in 2010, when the commission gave its first approval to lay pipes for an expanded sewer district. The total project now comes to an estimated $26.3 million.

The whopping increase caught many on the commission off guard, to the point that a few of them asked at a budget review session whether the county could legally back out of its agreement with developers to go ahead with the sewer project. That option was not pursued Thursday, when the commission voted 6-1 to approve the increase. The lone dissenting vote was by Michael Ashcraft.

Commissioner Edward Peterson expressed his reservations about authorizing such a big increase. “My biggest fear is at this point that it will be opening the door for a series of expenditures that are going to be painful,” he said. “I fear this is just the beginning of these types of costs. The real question is who’s going to pay for it.”

Cost overruns of this size are, “very, very unusual,” said John O’Neil, general manager of the county wastewater department.

The county decided in 2010 to build sewer lines from 167th Street to south of 191st Street. The idea was to expand a 1,300-acre area for development, which included Walnut Trails. That development, which lies partly in Overland Park, consists of about 572 acres and is to include 1,800 single-family homes, a shopping area and schools in the area of 191st Street and State Line Road.

At the time, commissioners were uncertain about the speed of development in the area. Peterson said he voted against it then because it was “leapfrogging” over undeveloped areas and he was skeptical that it could be filled fast enough to repay the county. So the commission told the wastewater department to wait a year before going ahead with the design work and bidding.

Since then, one thing after another has happened to increase the costs. Once a year had passed and wastewater officials had a budget for a more in-depth study, they found that the estimated 500 feet of tunneling under stream, roads and railroad lines would not be adequate, O’Neil said. For a variety of reasons, diagonal tunnels were needed, and the rock and soil makeup required a special and expensive machine to do the boring.

The engineers also found they needed tunnels, rather than open trenching, to protect 6.2 acres of pristine old-growth trees in a conservation easement along Camp Branch Creek. The easement was given to the county by landowner Kenneth Baum, with the agreement that the forest would not be disturbed.

Park and Recreation Director Michael Meadors said he was “elated” the commission did not opt for less-expensive trenches for a sewer line through the forest. “It’s the last fully intact streamway in all of Johnson County,” he said. The first trails are scheduled to be built next year in the as-yet-undeveloped park.

In the meantime, improvements in the economy and Hurricane Sandy have conspired to cause more demand for labor and materials, O’Neil said. As a result, the low bids for the sewer construction came in far higher than expected, and the county had fewer bids to choose from.

The huge cost increase has made some county commission members nervous about the developer’s ability to fill up the lots. The county has an agreement that developer AMF HM, LLC will buy a minimum of 50 sewer permits a year for 22 years to help the county recover some of the cost of building the new sewer system. But if the developer fails to do that, the county’s only recourse is to sue, and some commissioners were plainly unhappy with that.

Lawyer Curtis Petersen, who appeared on behalf of the developer, tried to reassure the commission, saying the company would not want to risk its long-time good relations with the county and cities by going back on that agreement.

Still, the whole thing left commissioners wondering how best to pay for development in the future.

“It’s frustrating when one sees this kind of cost increase and in fact, we have to deal with it,” said commission chairman Ed Eilert. The larger question is how much taxpayers should pay for development they don’t directly benefit from, he said. Historically, development has benefitted all taxpayers in one way or another, he said.

Commissioner Peterson said he voted yes because, “we made a commitment. At the time it was the best deal we on both sides could agree upon. Circumstances have changed and unfortunately it’s county wastewater ratepayers who are going to pick up the difference.”