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City seeks mechanism for funding Otay sewer system

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In Otay Mesa, a region that foresees explosive growth in the coming years, the city of San Diego is looking for ways to create a mechanism for the payment of developer impact fees for a future trunk sewer.

The cost of the trunk-sewer project is estimated at $128 million over a 50-year period. The city of San Diego has funded the first two phases and is starting to construct the third phase (2b1), a total contribution of approximately $35 million according to Allan Navarro, associate engineer with the Metropolitan Wastewater department of the city. The rest is up to developers eager to build on Otay's untapped land reserves. The sewer was designed by national engineering firm PBS&J.

So far, there are three options: fees for new development in the maintenance assessment district will be assessed equally for all developers, fees will be assessed based on use of a future pump station and fees will be assessed based on the location of the new development -- whether it be on the east side or west side of a pump station, located on Cactus Road south of Camino Maquiladora.

In 2002, the city began construction on the trunk sewer and created the Otay Mesa Surcharge District to fund the new project.

In the late 1980s, the city established a similar system surrounding the Otay International Center (OIC). The center financed much of the initial sewer infrastructure in the region, and was guaranteed reimbursement from future developers by the city. Council established benefit areas and assessed developer fees to anyone who built within that boundary to repay the center. The trunk-sewer plan will operate in conjunction with the OIC reimbursement.

"(We said) 'We're either creating a new district or amending an existing one,'" said Navarro, deciding how to manage the reimbursement of the trunk sewer in the network of previous sewer infrastructure financing.

The going rate for reimbursement is $1,700 for every equivalent dwelling unit (EDU), which is based on the water intensity of a building.

Unlike the former reimbursement plan, paybacks for the trunk-sewer construction would not include a 20-year sunset clause in which investors had to be reimbursed.

"The reimbursement is ongoing until the full infrastructure has been paid for," Navarro said.

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