Four-Part EIA Approach to Phase 3 Could Save $175 million ADU’s are desirable because they both add a badly needed housing unit (1-2 bedroom) and provide a potential source of income and lifestyle flexibility for today’s families. For the town, they add to assessed value, and thus the tax roll. We suggest incentivizing adoption by providing a 10 year “tax holiday” on the increase in assessed value in exchange for switching the main house and the ADU over to a new EIA at the homeowner’s expense. For the sake of our model, let’s assume that half of the potential property owners take advantage of this incentive (and possibly the state tax credit). The “cost” to the town in this case is the deferral of tax revenue based on an increase in assessed value. We model a ten-year program during which time 254 households are upgraded. We assume an ADU will add $250,000 to assessed value, which equates to a “tax holiday” of $2,200/year. Based on an average EIA cost of $46,000, here are four separate approaches to EIA rollout that when taken together, the savings equals $175 million. Four Steps to Save $175 million PART 1 PART 3 Install 254 EIAs on parcels that can build an Of the 593 parcels left to treat with EIAs, approximately ADU at a “cost” to the town of $58,000/year 308 could fall into the low-income category if we use the or $558,000 over 10 years. Barnstable County metrics of family’s earning below $75,000 ($46,000 per household. Homeowners pay full $46,000, annually. For this cohort we will assume the town pays the Town Tax Credit of approximately $2,200 per household entire $46,000 per household with the understanding that this per year for 10 years, plus potential state grant of is an oversimplification. Assume funding comes via SRF funds $18,000 = Net homeowner cost of $6,000.) or other borrowing mechanisms. $46,000 X 308 = $14,168,000 PART 2 PART 4 1,483 parcels are now left to be treated in our model. Our math indicates that 285 households remain to be addressed Our research indicates that more that 60% of these with EIA treatment, and these are all non-residents. For this qualify for a residential exemption and earn enough cohort we posit a direct payment of $16,000 (roughly the cost of money to take advantage of the new $18,000 state tax a new title 5 system) and a SRF or other borrowing mechanism credit for upgrading septic systems. We next assume for the homeowner to borrow the balance of the costs at a that each of these property owners will be asked to low interest rate for an extended term of 20 years. shoulder the same percentage for an EIA as they would for a sewer connection (14.3% or $6,578). CONCLUSION $46,000 minus $18,000 minus $6,578 = $21,422 to be Town Sewering Total EIA town financed. With 890 parcels costing $19.06 million. Phase 3 Projected Costs Direct Town Responsibility Install 890 EIAs at a cost to Town of $19,065,580 $243,180,000 $19,065,580 ($46,000 per household. Homeowners pays $6,578, ($140,000 x 1,737 total phase 3 ($21,422 x 890 Town partial subsidy) State Tax Credit of $18,000, Town subsidy of $21,422) sewering costs - $34,740,000 + $14,168,000 ($20,000 x 1,737 Homeowner costs) ($46,000 x 593 Town fully subsidized) ** To receive the full State Tax Credit, one’s income must be $208,440,000 Town responsibility $33,233,580 Town responsibility $91,000/year and one must be a resident. Median household $208,440,000 Town Phase 3 Sewer Costs income in Phase 3 area = $111,754 (61.4% of residents make -$33,233,580 Town EIA Subsidy Costs above 91,000), and residential exemptions in Phase 3 area = 1,069 $175,206,420 TOTAL ESTIMATED SAVINGS TO THE TOWN (61.54% of residents have a residential exemption) See Illustration page 10 BCleanWater.org Fall/Winter 2025 | Barnstable Clean Water Coalition | 7