By Cindy Hoffman and Hunter Hine, Staff Writers
The debate over what the Town of Berlin could and could not do with EDUs was one of the key factors that sabotaged the deal with Palmer Gillis of Coastal Ventures Properties to purchase parcel 57 on the Heron Park tract, once the site of the Tyson’s chicken processing plant on Old Ocean City Boulevard.
During the Oct. 23 council meeting, Mary Bohlen, the town administrator, sought to clear up the confusion via a memo that explained what EDUs (equivalent dwelling units) are and how they are acquired.
EDUs are a water and wastewater capacity measurement that is required for any development that intends to use or discharge water. One EDU equals 250 gallons of flow a day, the amount of water and wastewater needed for an average home, although EDUs are associated with resident and commercial properties.
Currently, the town itself is paying a minimum bill of $1,100 a month or $30 per EDU for the water/wastewater units it owns on the parcel 57. This is a locked-in rate from the purchase date of the property. This appears to be a deal that was cut by a previous town administrator. Today, the minimum bill would be $61 per EDU, saving the town $13,000 a year.
If a private entity purchases a wastewater EDU, the price would be $16,686 said Jamey Latchum, director of water resources. A water service EDU is over $4,200, he added.
Bohlen said the initial purchase of an EDU is different than paying the minimum bill on it.
While council members discussed moving EDUs from parcel 57 to other parcels in the future in preparation for any development in Heron Park, they did not decide to write any motions to do so yet.
Councilwoman Shaneka Nichols said that with the a skatepark set to be added to Heron Park, along with a potential public works building, moving some EDUs around to different parcels should be considered at some point.
A potential public works facility is not a “done deal,” but still in the planning phase, said Mayor Zack Tyndall.
“As long as we own the properties, you don’t really need to do anything. It’s there, it’s not going anywhere,” Bohlen said.
During the debate over the sale of parcel 57 to Gillis in early September, Councilman Jay Knerr suggested that the town charge Gillis more money for the EDUs on parcel 57.
“EDUs are attached to the property. You don’t charge additional fees for the EDU,” Town Administrator Mary Bohlen responded.
On Monday, council members discussed how a misunderstanding seemed to form on whether the EDUs were valued into the price of parcel 57 in the canceled sale to Gillis.
Bohlen said that while the EDU may not have been specifically valued into the price of the sale, developers might consider that the EDUs are part of the price since EDUs are inherent in the value of a property. Without EDUs, a developer can’t build anything.
In an email exchange where council members asked questions about EDUs, Knerr asked whether the EDUs from parcel 57 could be transferred to parcel 410 or 191 or give them back to the inventory of unassigned and available EDUs, according to Bohlen’s memo.
If the town gave the EDUs back to the inventory, it would forfeit all the money paid to date, and the rate would no longer be locked in for future EDUs, but it would avoid paying the monthly changes going forward.
At the Oct. 23 meeting, Knerr asked what it would mean to forfeit the money. Bohlen explained it with the example of a residential property. If residents stop paying the minimum bill on and EDU then the town can take back the EDU. In that scenario, any money the resident had paid to date on the EDU would be gone, she said.
Bohlen’s memo says that if the town transfers all or some of the EDUs away from parcel 57, or if the town reverted the EDUs back to the inventory, it’s staff’s opinion that parcel 57 would decrease in value.
“A potential purchaser will take into consideration that both water and sewer EDUs will need to be purchased separate from the purchase of the parcel. Staff would agree that it may be prudent to transfer a few of the sewer EDUs to parcel 410 and/or 191, but to leave the bulk of the EDUs on parcel 57 and continue to pay a monthly bill on all,” according to Bohlen’s memo.