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FINANCING/FUNDING: Staff reached out to the COS on this project as they are a major stakeholder. The COS has voiced their willingness to support the county's efforts for a centralized sewer system but has cautioned that the capital portion of the project should not be borne by the COS but rather by the county and/or the county's utility. On November 23, 2016, the COS city council directed their city manager to engage in discussions with the county administrator on how best to proceed for connecting property owners (once the project is built) such as using the COS's Community Redevelopment Area (CRA) funds or the COS's grant from the Indian River Lagoon Council (IRLC). Such financial details need to be approved. A city council meeting to be he -Id Wednesday, December 14, 2016, proposes to use the $100,000 IRLC grant and the remaining $230,000 in the city's septic to sewer fund. Within the program it is proposed to allocate $10,000 per qualified applicant from the City's CRA funds and $5,000 per applicant from the Indian River Lagoon Council grant for a total of $15,000 per applicant. The purpose of the presentation to the COS city council on November 23, 2016, and to the BCC on December 20, 2016, is to illustrate estimated costs associated with installing centralized sewer for phase 1. Such costs can be divided into two main categories: 1) project costs and 2) connection costs. Project costs represent the totality of all the costs that go into the design and building of the project. The "soft costs" include tasks such as engineering design, survey work, and permit fees. The majority of the remaining costs are the construction costs that include all material and labor needed to build the project. Simply, construction costs plus soft costs equals project cost. The SJRWMD grant is only tied, to the construction costs; and as such, all soft costs have been paid for using utility funding. The connection costs represent those fees necessary to connect to a system once it is built. They include costs such as running a line on a property from a structure to the roadway, abandonment of the septic tank, and impact fees. All users who connect to the system must pay for their impact on the system, which includes the demand of their connection on transmission mains and treatment plant capacity. Impact fees are in addition to construction costs. Other funding options such as Optional Sales Tax and Utility Funds were considered to assist in reducing the financial impact to commercial property owners. In Phase 1, the costs per benefitting parcel were evaluated under the following criteria: • Hydraulic Fair Share (converted to potential ERUs) • Linear footage of parcel fronting the sewer main • Square footage or area of the benefitting parcel M&M's proposal for Commercial Area Phase I tabulated the number of potential ERUs that could come on- line based on zoning, underlining land use and past site plan applications for vacant parcels. Where applicable, for parcels that had structures, existing water usage and ERUs currently allocated were utilized. Staff recommends the BCC consider the following funding mechanism for North Sebastian Septic to Sewer Phase I. Note this breakdown is in draft form, subject to change, and not a final determination. Page 2 of 8 P135