Sewer hook-up fees, County's way of saying no to Car Washes

[ljsflash]

I'm in the process of of writing my business plan and looking trying to put a package together to buy a property for my car wash. I just learned that my county plans to charge a fee of nearly $270,000 for my proposed self-serve to hook up to sewer (the cost of the physical hook up is not included in this). The way they derive this number is from a formula that they put together. I will be on a well but it's their way of determining my sewage usage. Basically the formula calls for each spray bay using 400 gal/bay/day. In-bay automatics are deemed to use 4200 gal/bay/day. My wash will consist of 2 in- bay (touchless) automatics and 3 spray bays for a total of 9600 gal/day. That number is then divided by 250 (average household usage I assume) to achieve 38.4 "units". The fee charged for allowing to hook-up is $7080 per unit for a total of $271,872. Actual hook-up is not included but service is already on property.

It seems like the In-bay auto's a getting hit hard (400 gpd for spray vs. 4200gpd auto). Basically you can have 10 self-serve spray bays to 1 In-bay auto. It would be cheaper to open a full service tunnel because they determine those to use 7400 g/day or 29.6 units or $209,568 but that is not the business model I was originally pursuing. Perhaps I need to re-think it.

And yes, they don't care if I have a water reclamation system.

Any advice or comments will be appreciated.

LJ

 

[raisetheprice]

I don't think you could wash enough cars to cover those kinds of initial investments on top of land, equipment, and building. Seems very very high.

 

[CleanStreak]

Contest

Most likely you will need to contest their assessment. A reclaim system should definately help you here, but you will need to push them. Their first response to you will be the maximum theoretical amount you could possibly produce. That covers their collective butts "just in case" your reclaim system does not work. In my case, I had to pay their higher estimate and file an appeal. This set into motion a 1 year monitoring program that will end with a re-assessment based on actual sewer discharge.

Many reclaim manufacturer's are already armed with the documentation that supports the reduction of discharge for this very purpose.

Another option is to go 100% reclaim and forget connecting to the sewer at all, but that has it's own tradeoffs.

Unfortunately, they make the rules for the game. The first one you will learn is that you will have to fight and scrape just to get to fair and reasonable treatment.

The reclaim company I went with was a huge help in navigating these (un-reclaimed) waters

Lee

 

[pitzerwm]

I'd bag the CW, if you already own the land, look into building self storage units, or sell it. You are the cities' only source of revenue, it will never get better. Sure, you might get them to knock down this fee and they will just make it up somewhere else. Better to know that this town is just out to screw you and you're the one with the balls and money.

 

[ljsflash]

Most likely you will need to contest their assessment. A reclaim system should definately help you here, but you will need to push them. Their first response to you will be the maximum theoretical amount you could possibly produce. That covers their collective butts "just in case" your reclaim system does not work. In my case, I had to pay their higher estimate and file an appeal. This set into motion a 1 year monitoring program that will end with a re-assessment based on actual sewer discharge.

Many reclaim manufacturer's are already armed with the documentation that supports the reduction of discharge for this very purpose.

Another option is to go 100% reclaim and forget connecting to the sewer at all, but that has it's own tradeoffs.

Unfortunately, they make the rules for the game. The first one you will learn is that you will have to fight and scrape just to get to fair and reasonable treatment.

The reclaim company I went with was a huge help in navigating these (un-reclaimed) waters

Lee

Thanks for the replies. CleanStreak, I asked about the monitoring program and was told I'd have to pay the full $271k upfront, then after 3 years
they would look at my peak usage each quarter and possibly adjust. Not sure if I want that much of a capital expenditure and doubt I would be reimbursed much if any. Funny that a full service tunnel would be almost half the cost of the Capital Connection Fee. I think the usage estimate is grossly over-estimated. I have no problem paying for what I'm using, but I guess that is what I may have to do in the "People's Republic of Maryland" if I want in the wash business here.

I will look to the reclamation companies for their guidance. It could be that the only way to do it will be to buy an existing wash but even then, upgrading to a IBA would probably flag the new connection fee through the permit process.

Anyone else with advice?

Thanks agian,

LJS

 

[Mr.Aap]

Talk about being shakin down.......Lord I feel for you.....

 

[Rudy]

15 years ago, when I opened my 3/2....the Sewer Authority estimated what they thought that the wash would use. I had to sign an agreement to look back after 36 month's and have the connection fee adjusted accordingly. Well, 36 months later, they wanted 5 times what was estimated....and they backed it up with usage records. A $20k tap fee hit almost $100k. You are correct...they take the gallonage and convert it to an "RE"...that is...a residential equivalent. I forget the number.....something like 37 RE's...but you have a hard time arguing why your wash doesn't use the same amount of water as 37 houses...especially when they have the data.

In my case, to pour salt in the would, the cost for a RE had almost doubled in the 3 year period. The Sewer Authority was involved in a remedial plan to update their systems.

Bottom line...I raised hell....they didn't care...I threatened litigation...they offered to settle at 80% of the RE's...I offered to accept this, but at the OLD agreed upon rate....Viola, I have to set up a payment plan to pay them $80k over 4 years.

This wasn't easy for a new business, but here's the good news......What are the odds of my getting competition? Somewhere between slim and none. What cost $100k to tap 15 years ago would cost $250k now....and that's just for the sewer tap permit!

My best advice...check the RE calculation's carefully so you are not surprised later.

 

[Greg Pack]

The County I last dealt with was willing to look at other car washes water records for comparison.

 

[Waxman]

Frankly, I do not see how a carwash could pencil out with this type fee. It's crazy, huge and totally preposterous!

 

[ljsflash]

Rudy:
"This wasn't easy for a new business, but here's the good news......What are the odds of my getting competition? Somewhere between slim and none. What cost $100k to tap 15 years ago would cost $250k now....and that's just for the sewer tap permit!"

I've thought that perhaps it would limit future competition. Unfortunately I'm the one paying the $270k now or $204K for a full service tunnel. Still have to run the numbers to see if the increased cost is justifiable. My RE's are similar to yours Rudy, about 38, but actually goes down to to 29.6 for a full service tunnel.

The Car Wash Industry is being unfairly singled out. The county's numbers are based on research of all the others in the area. The huge full service in my area got in under the wire and did not have to pay near this amount. They however, are used in the formulation to calculate usage and thus bumps up any future washes estimates. Also, the divisor the county uses (average home daily usage) is 250 gpd. In reality, the the average home in our area uses 450 gpd. If my estimate was divided by 450 it would be much cheaper. But it is what it is.

Maybe bigger is better. It would take a much bigger operation than the one I had planned for to generate enough cars to yield a ROI I'm comfortable with.


LJ

 

[soapy]

I think I would really look at buying out an existing wash if you could. They may not understand how the sewer tape fees has increased the value of their wash.

 

[Jim L.]

My county allows 750 gallons per day to be put into a septic tank system. What about reclaim with a septic tank for overflow?

 

[robert roman]

Near the end of my career as a public servant, I did a one year stint as one of the chief environmental planners with the Washington Council of Governments. WCOG is an ad hoc agency that is responsible for various planning functions (air and water quality, urban and transportation planning, etc.) for 48 governments in Maryland, Virginia and D.C. Even then, the city and county governments in this area were struggling to comply with environmental standards. Today, the situation is even worse. Many POTW's are nearing their capacity to handle waste from existing sources let alone accommodate new growth. I can assure you that you are not being singled out because you want to build a new carwash facility.

What you are experiencing is the result of concurrency management. In short, this is the principal of requiring infrastructure to be planned and financially committed prior to obtaining an occupancy permit. Many governments rely on this concept to manage new development and growth and to insure the general public's health and welfare.

In your case, the opportunity cost to hook up to the city's sewer system is $270,000 "plus" the monthly fees that you will have to pay to discharge waste water into the sanitary sewer system over the anticipated or expected useful life of the business which is around 20 years. The industry average sewer expense for self-serve is about $3,800 (PC&D 2006) or $76,000. Therefore, the true cost for hook up and using the system is $346,000 or more if your actual sewer rate is higher.

If you could purchase and install a closed-loop system for $76,000 (very possible), you would avoid the $270K impact fee and would be back to square one in terms of financial feasibility. Even if closed-loop cost $100,000, the $25,000 difference should not make a material difference in your finding.

Hope this helps.

Bob Roman
www.carwashplan.com

 

[Kevin James]

This is a no brainer. The reason the sewer tap fee?s are so high is the city doesn?t want you to build a Self Serve car wash period. Been there and done that. If they don?t want to there they will throw up every road block they can to make your project unprofitable. Most Self Serve car washes are an eyesore to the community that they are in within a number of years they look like a dump site. Most Self Serve car washes generate very little tax revenue for the services they require. You might want to start looking for a car wash buy and fix up.