The Knapp Lake Sewer Project

Environmental impact / milestones / budget and cost /

property owner interaction and involvement

Nick Stanger, WACF and KLACD - March 2015

Knapp Lake Indiana.

20 minutes north of
Columbia City; 6
miles west of US
Hwy 33 / Wolf Lake
and a few miles
east of Hwy 5.

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Knapp Lake (88 acres);

Harper Lake (11
acres); Little Knapp
and Bause Lakes;
Moss Lake (10 acres)
and Hindman / Neal
Lake (13 acres) along
with the Indian Village
Lake chain (including
Duely, Rider, and
Gordy Lakes)
constitute the '10 Lake
Chain' that flows into
Lake Wawasee.
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Environmental need and impact.

There are 200+ homeowners on Knapp, Bause, Harper lakes. The
cottages are on septic systems (some still have outhouses), many
with capacity for weekend use only. Over time, many people
started using these properties as permanent residences; now there
is clear evidence of 'overuse' cropping up in water samples due to
very old and saturated septic systems.
There is no dispute that the water quality in the Knapp Lake
chain is deteriorating, demonstrated through the WACF
Watershed Management Plan and work that JF New has
done, as well as the IDEM Impaired Water Bodies map. The
water quality is much poorer than Wawasee and Syracuse
lakes into which it flows. The Noble County Health
Department conducted numerous water tests and concluded
that "sewers are needed because of ongoing problems
around the lakes - high e. coli counts in the water and
around the beach area, and water wells that have failed
testing."
Clean water is vital to health, recreation, and property values. For
it had been talked about: in 2006 it became a reality - and
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Summary - project overview and current status.

After serious discussion in 2005, the Knapp, Bause, Harper Lakes
Property Owner Association (KBHPOA), with no money of its own,
approached the Wawasee Area Conservancy Foundation (WACF) for
support in May 2006.
The WACF is a not-for-profit foundation dedicated to the
preservation and enhancement of the 23,618-acre Wawasee
watershed (of which the Knapp Lake chain is a part) for
present and future generations.
Initial engineering studies and cost estimation began.
In April 2007, the WACF approved up to $25,000 to KBHPOA
to create a legal entity to obtain funding/grants, providing
seed money to kick-start the project.
Now - after almost 10 years of organizing and planning, grant writing,
designs and redesigns, hurdles and setbacks, a global financial crisis,
working with individual property owners, vendor and contracts
negotiations (more on all that later) - the money is lined up and we
are ready to go to bid for construction then break ground ('turn the
KLACDsod'
2015 or 'flip dirt' or whatever; although with vertical drilling they
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Legal entity why a CD/Conservancy District?

Essentially 5 options: create a (1) private utility (no public funding used or
available); (2) sanitary district (usually for large public works); (3)
COTA/Certification of Territorial Authority under the IURC/Indiana Utility
Regulatory Commission (usually for private developers); (4) RSD/Regional
Sewer District (a good option but county commissioners may be hesitant to
create a new one if several already exist, as was our situation in Noble
County); and (5) CD/Conservancy District.
A CD can offer the greatest flexibility relative to funding options and
is generally the least restrictive relative to the alternatives.
However, the other options are governed by statutory regulation
where a CD can be 'killed' by popular vote in a general district
election (so educating those affected is important). Further, a CD is
a 'taxing district' and can establish a tax assessment on property
(i.e., adding unpaid amounts to real estate taxes due - tax lien); this
possibility usually eliminates the collection problem of chasing down
property owners to pay their monthly bill.
Our first formal interaction with the property owners, even before the CD was
created, came in September 2006 with a meeting of the KBHPOA
membership. We estimated the cost to be $50-$60/mo. per household. The
vote was 77% FOR the sewer project. Most of those opposed stated it
was because of the cost, as the income of many residents around the lake is
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low (a formal 'income survey' is required to determine the % available from

Project milestones (slide 1 of 4).

2005 - KBHPOA discusses the need for a sewer in earnest.
(1) May 30, 2006 - Dave Rowe, President of KBHPOA requests WACF support;
preliminary Bonar Group Engineering (now GAI) feasibility study underway.
(2) June 14, 2006 - WACF agrees to project support (non-monetary).
(3) July 12, 2006 - WACF requests info from Bonar re: route thru WACF land.
(4) August 16, 2006 - WACF reviews Bonar report.
(5) September 2, 2006 - KBHPOA meeting / sewer vote; 77% in favor.
(6) September 13, 2006 - WACF contacts DNR for opinion re: sewer route.
(7) October 18, 2006 - DNR support; WACF OKs route through WACF land.
(8) November 15, 2006 - Work w/Bonar, DNR to address impact, set limits.
(9) March 14, 2007 - WACF considers financial support of KBHPOA project.
(10) April 11, 2007 WACF liaison (Stanger) meets with KBHPOA officers.
(11) April 21, 2007 - WACF approves to pay up to $25,000 in costs for KBHPOA
to set up KLACD as the legal entity to obtain funding/grants.
(12) April 25, 2007 - KBHPOA meets with Dick Green (attorney) to start petition.
(13) June 2, 2007 - KBHPOA meeting; Dick Green discusses process with
members; cost est. $3.8 million, 3 years to complete, $50+/mo. per household.
(14) July 25, 2007 - Green & Cates files Petition for Creation of 'Knapp Lake
Area Conservancy District' (KLACD) with 114 signatures from 210
freeholders (54%); 30% minimum was required; notice sent to freeholders re:
petition hearing set for 9/25/07.
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Project milestones (slide 2 of 4).

(15) Sep. 8, 2007 - KBHPOA meeting / new officers; Dave Rowe resigns after
years of service and kicking off this project - Thanks Dave! Dean Bickel
elected President, later elected President of KLACD; confirmed support for
sewer is still strong.
(16) Sep. 25, 2007 - hearing: petition to create KLACD deemed valid & proper.
(17) Nov. 30, 2007 - hearing: matter of forming the KLACD referred to DNR.
(18) Jan. 22, 2008 - hearing: Natural Resources Comm. (NRC) approval.
(19) Mar. 31, 2008 - hearing: court order KLACD decreed to be created.
(20) July 9, 2008 - KLACD Board of Directors elected; District Plan filed.
(21) August 13, 2008 - KLACD met with North Webster (NW) Town Council to
discuss possibility of connection, handling the waste (est. (40,000
gallons/day), billing and administration for the KLACD. They have capacity
and were receptive.
(22) Fall 2008 - 'income survey' underway (to prove need for % grant vs. %
loan; need 67% = 140 / 209 households to return survey) and water quality
testing by county health department continues (to prove need for project; four
E.coli failures, so result not good and count was high).
(23) Spring 2009 - worst flooding since 1983 on Knapp Lake chain and other
local lakes; financial crisis takes hold, but more grant money for 'shovel-ready'
projects may be available with new administration in Washington, so we need
to move fast to get ahead of the pack. Project cost now estimated at $4.8
million, up from $3.8 million two years ago; est. split 45% grant/55% loan
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depending on final income survey.

Project milestones (slide 3 of 4).

(25) April 14, 2010 (now 5 years into it) - H.J. Umbaugh & Associates updates
project costs - $4,833,000 ; this is a low pressure / Airvac system with 158
packaged grinder pumps serving 200+ households. Final paperwork for USDA
application to lock up revenue bond rate, set rate hearing, finalize design
work. This is it - KLACD faced with 'Go / No Go' decision as 'real money' will
now be spent, no going back; board unanimously approved a motion to go
ahead. Funding and permit apps prepared.
(26) December 2010 - setback! Project delayed a year due to federal
budget and state funding issues and confusion over grant filing requirements.
Lots we can do in the mean time, but we lost a year; it will be 2012 to submit
apps for the next round of funding.
(27) April 11, 2012 - A huge milestone: funding is assured! KLACD
receives and votes to sign the 'Letter of Intent to Meet Conditions'
officially accepting the grant and loan for the sewer project; local
newspapers articles with photos follow the announcement that was 7
years in the making.
(28) May 26, 2012 - 'Open House' KBHPOA / KLACD give update and answer
questions.
(29) July 18, 2012 - BAN (Bond Anticipation Note) @ 2.75% was created so
KLACD can start to draw and pay pre-construction bills monthly until grants
and loan received.
(30) September 1, 2012 - 'Open House' with KBHPOA / KLACD (incl. GAI
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engineers, USDA, legal counsel) - drawing/map from each property owner

Project milestones (slide 4 of 4).

(31) Spring 2013 - 'Open House' with KBHPOA / KLACD, Legal Counsel, GAI
engineers and USDA reps to provide latest information and answer questions.
Defined ' customer' (Equivalent Dwelling Unit'/EDU - occupancy, fixed to
foundation, vacant lots). Notarized easement from property owners allowing
access to property for sewer lines, pumps, and maintenance needed; lots of
door-to-door follow up work required by KLACD directors.
(32) Summer/Fall 2013 - vendor selected to provide grinder pumps (last piece
needed to finalize design specs for construction bid packages); finalized
purchase of small land parcel south of Knapp Lake for the lift station needed to
push waste to NW facility; all needed permits obtained, 40-year agreement
with Town of NW to handle waste was signed, ready to go to bid over the winter
with construction and connections in 2014.
(33) Spring 2014 - setback! Project delayed another year as Town of NW
committed to sign our capacity certification letter based on existing conditions
but now requires us connect to Lift Station 10 (north side of town) rather than
vacuum station A (south side of town); so GAI must redesign/cost out the entire
sewer route with propose alternatives then re-works specs / construction bid
packages, and file for new permits.
(34) Summer/Fall 2014 - new route agreed; new permits and final easements
obtained; Interlocal Cooperation Agreements between KLACD and Town of NW
is signed.
(35) March 2015 - we will publish in newspaper that construction is being put to
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bid, send spec packages to construction firms, obtain and evaluate bids; select

Funding / budget / household costs (updated Dec.

2015).
Total cost $5.5 million including $4.1M construction (CSU Inc. awarded low bid 9/2/15)

and$1.4M to cover engineering / design (GAI), inspections, geotechnical / archeological

studies, pre-construction BAN/bond counsel and fees, consultants and other legal fees,
capitalized interest etc. This is a positive displacement package system (no vacuum
systems components) with 158+/- packaged grinder pump stations (manufactured by
e/one - Environment One Corp. in NY) serving the 200+ households. Construction started
October 2015 and will continue for 1 year, then hook-up to individual homes will occur.

Funding: 75% ($4.1M) from USDA RD grants + 25% ($1.4M) low interest RD loan (2%) for
39 years.
Final income survey of residents shows 75% with income under the poverty line so the
maximum USDA grant obtained (75% grant / 25% loan). The Median Household Income
(MHI) for Noble County is $47,117 so $90/mo. is 2.29%; the USDA guideline for
affordability is in the 2% range.
The debt service (principal and interest) for the loan portion plus current
administrative & billing costs = $26.30/mo. per household starting with
December 2015 billing; once the system is operation & connected, the costs of
annual operation (handling waste, maintenance & repairs etc.) will be added to
the monthly billing for an estimated total of $89.95/mo. per household. This is
comparable to, and in many cases much less than, other sewer districts with
similar income levels.
Residents will pay no fee for hook-up but are responsible for the cost of the connection on
their property from the grinder pump to their home; grant money may be available for
residents to help cover this.
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Property owner interaction and involvement.

1. 'Open House': sewer board members (including legal counsel, engineers,
USDA/RD rep etc. as needed) in conjunction with the lake property owners
association (POA) meetings, starting from the time of the first vote to
gauge initial interest, then throughout the entire process. Semi-annual
(late spring & early fall) update with the latest news, time table, cost
estimates, information needed; leave time for Q&A.
2. Face-to-face with property owners: (a) court hearings for creation of the
district and legal entity; permits (IDEM / DNR etc.); rates; (b) monthly
sewer board meetings - encourage attendance by the public; (c) when
door-to-door to address individual questions and concerns as well as follow
up on outstanding info needed - drawings of utility locations, easement
forms etc.; the 'hold-outs' are most likely the ones with issues resistance / objections etc. - and spreading a negative message, so this is
the best opportunity to address those 1-2-1 and try to get them 'on board'.
3. Newsletters: POA & others, to provide progress reports at least twice
annually.
WE WANTED TO BE AS INCLUSIVE AS POSSIBLE !
Resources & special thanks to (1) all past and current KBHPOA and KLACD
board members over the years; (2) The WACF staff and board; (3) Mike Novac Indiana
Rural Assistance Program; (4) Mark Jesse and Steve Henschen - GAI 11
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Consultants / Engineering (formerly Bonar Group); (5) Dick Green - Green,