Assessing Cleanout Costs for O'Brien County Drainage Part III

By Loren G. Flaugh

Paying down the high costs for the Drainage District (DD) #5 cleanout and repair in north central O'Brien County may become as problematic as other issues surrounding the 3317-acre DD cleanout project itself.

When county auditor Barb Rohwer brought up the cost issue halfway into a lengthy Oct. 4 DD #5 discussion, Jacobson-Westergard engineer Richard Hopper replied, “I would not levy landowners no sooner than the fall of next year in 2017.”

Hopper anticipates that the public hearing and bid letting will be done this winter and actual cleanout work will not start until the spring of 2017.

Part of Hopper's engineering report included a detailed cost estimate for cleaning out DD #5. Hopper calculated that 29,200 cubic yards of dirt has been carried downstream in a waterway and deposited in the DD open ditch since it was built 95 years ago. Hopper speculated that a complete cleanout of the open ditch has never been done since DD #5 was created, other than perhaps a spot cleanout once or twice.

Hopper's estimate shows the cost to remove the 29,200 cubic yards of silted in dirt at $116,800. Other direct costs related to the restoration of DD #5 brought the estimated subtotal construction cost to $139,400. Adding other anticipated costs like engineering, related legal work, publishing official notices, classification of DD #5 and interest brings the total estimated cost to the DD to $194,840.

Hopper strongly recommended that the Board needs to annex the 7,119-acre area going west and northwest from the end of DD #5. Hopper said that once DD #5 is cleaned out, then those landowners will benefit from using the ditch in DD #5 as an outlet for their excess water to drain during wet periods.

One reason why Hopper is adamant in suggesting the annexation is the dramatic cost reduction it will bring to landowners in both the DD #5 area and the 7,119 acres that could be annexed. Hopper's figuring shows a $57.80 cost per acre, if only the 3,371-acre area is impacted. If the 7,119-acre area is annexed into DD #5 bringing the total acres to 10,490, then the cost share for landowners plunges to $21.

The estimated total cost to the DD rises to $220,340 when adding the incidental costs for the annexation and $18,000 for reclassifying the 7,119 acres that drain into DD #5. I've been told there's been a lot of pattern tiling in that 7,119 acre area in recent years. It's just full of tiling, said Hopper.

“Drainage is a big deal. It’s spendy, but you've got to have it. Or, you will not get a crop.” Hopper pointed out.

In response to a question about how long it might be until another ditch cleanout is required, Hopper speculated, “You might do one or two spot cleanouts in the next 10 years. For a good cleanout, it's going to be 20 to 25 years probably. If the ditch is functioning well enough, then nobody is going to want to petition for another cleanout. If it's working fine, then nobody will want to spend the money.

“This would be a whole lot easier with $7 a bushel corn. If we would have done it two years ago, with where corn and bean prices were at, landowners wouldn't even have thought much about cleanout costs,” said supervisor Tim Farnsworth. “Right now, it's not going to be an easy task.”

“I think it will help if we can get the DD cleanout costs down to around $21 an acre,” Hopper reiterated.

Does this annexation extend into Melvin?

“Yes,” replied Hopper. “Any landowner in that 7,119-acre area could become part of DD #5.”

Does the Melvin City Council become part of this issue?

“Yes,” Hopper answered. “They will be considered simply as landowners because of their streets. It could be hard to explain to them how they are benefitting. Water drains from their streets and flows into the existing waterway that goes into DD #5. I hope that their assessments are so low that they are able to pay them.

“There are some landowners that are really going to accept it and they are going to see that it will help them. But, you're still going to have that portion of landowners that may absolutely not want to pay for it,” said supervisor Tom Farnsworth.

“Some people you won't get it explained to. I can understand that. But the majority usually understands It sometimes takes landowners a few years to get over paying the hit for the cost. But, when the ditch is working, it solves a lot of issues,” Hopper pointed out.

Rohwer asked how the public hearing costs will be allocated. “Will that go towards the DD #5 account, too?”

“Yes,” answered Hopper.

Rohwer reminded everybody that the DD fund itself was already in debt. “So, what do we do?”

“Are you issuing any stamp warrants on anything else?” asked Hopper.

“No, we haven't,” said Rohwer.

“It's a fairly simple procedure for the county to issue stamp warrants. It's basically a check that's stamped 'insufficient funds' and then you'll have to decide when to pay them off. That's the means that's been developed to pay dirt contractors and engineers. Then, once you levy the landowners, then the stamp warrants will be called in and paid off,” explained Hopper.

“What about selling bonds?” asked Rohwer.

“If you are going to sell bonds to raise cash, you can do that. Most of the counties are now issuing warrants for something like this,” Hopper noted.

“So, you wouldn't sell the bonds?” Rohwer questioned.

“No. You wouldn't even have to sell any bonds, if you issue the stamp warrants. That way a stamped check that says 'insufficient funds' just accumulates as debt for the DD. Then that debt is brought down once you start to levy the landowners,” Hopper explained.

The Board then voted on whether or not to approve the engineering report and set a date for the public hearing. The Board approved the matter and set Tuesday, Nov. 29, 2016 as the date for a public hearing.

Rohwer then raised one last question about raising funds to pay the cost for the DD cleanout. “Aren't we almost going to have to sell bonds, more than likely?” asked Rohwer.

“You may want to consult with several other area county auditors to see what has been working best for them. It may be the best solution to issue the stamp warrants. You start paying them off as soon as you levy the landowners following the completion of the project. It does create a lot of work for the county treasurer.

What's happened in other counties is that the treasurers are buying a lot of these warrants back themselves because it's a good investment. There's all kind of angles with this. Sometimes, a financial institution will buy them,” Hopper clarified.

This article was first published in the Cherokee Chronicle Times. CLICK HERE to read the article on their website.