Article III Bond for Wastewater Infastructure Improvements

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Thursday February 22, 2018

On March 6, residents will vote on whether to authorize a $2.98 million infrastructure bond as a final step to bring all sewer services under city control at the Bartlett Bay Wastewater Treatment Facility.

If approved, the neighborhood of Hadley Road homes, which sits just below Rice High School, would have its sewer services rerouted to South Burlington’s own Bartlett Bay Wastewater Treatment Facility, securing the last piece of water infrastructure to come under city management.

The wastewater sewer from these homes has always been discharged north to a Burlington treatment plant, with South Burlington paying fees for the services. The arrangement worked well for years, until Burlington refinanced its sewer fund, which increased the rates significantly: about 75-80 percent higher than South Burlington’s rates.

So, when the $110,00 annual payment to Burlington turned to upwards of $240,000, South Burlington considered the advantages of rerouting the sewer south, to the city’s own sewer plant on Bartlett Bay Road. The plant has plenty of hydraulic capacity and additional phosphorus loading, well within the city’s permit discharge limits to accept the additional flow, South Burlington Director of Public Works Justin Rabidoux explained at a recent informational presentation held at the library.

Why does it matter?

“You may look at this and think, ‘I don’t live in this neighborhood. What does it matter to me?’ The reason it matters to you is that we charge the residents of this neighborhood the South Burlington sewer rate,” he said. “The sewer fund, which is separate from the general fund, writes the check to Burlington every year for this cost. So essentially, all the sewer-rate payers in South Burlington are subsidizing this additional $100,000 plus, in the difference between what it would cost us versus what it costs to pay Burlington for the service. So just because you don’t live in this neighborhood, don’t think it doesn’t impact you financially,” he said.

The story behind the numbers

The city is limited in what it can include in the ballot language. When voters are asked whether they want to support a nearly $3 million project, there is more to the story than the numbers.

Of the $2.98 million, approximately $1.4 million is eligible for grants and credits right out of the gate, leaving the actual out-of-pocket expenses closer to an estimated $1.6 million. Broken down, South Burlington will receive about $750,000 from another partner in the project: Champlain Water District. Additionally, depending on the final bid on the project, South Burlington can take advantage of up to nearly $600,000 in either loan forgiveness or grants.

“It’s money that’s already in our budget to pay Burlington. We would rather use a portion of that money to pay for this project. The savings can also be used to reduce the rate,” he said. “Once the final numbers are in, we will pick a payment plan that gets us ahead of the game. We can probably handle it in about 10 years. There’s no reason to think that we would need 20, 25, or 30 years.”

The money would cover necessary improvements, including new concrete pump stations and gravity sewer and ductile iron force main piping.

“If we choose to undertake this project with the permission of the voters, on ‘Day 1, Year 1’ we are tens of thousands of dollars in cash positive,” Rabidoux added. “Once the bond is repaid, we are now hundreds of thousands of dollars annually cash positive because we’re not writing a check to Burlington and we’re not paying back the state.”

Furthermore, in an effort to reduce levels of phosphorous loading into Lake Champlain, the state approached South Burlington about a new revolving fund program for which it is eligible. The city will receive a “free” stormwater project amounting to 10 percent of the cost of the bond, which is nearly $300,000.

“The way it’s going to work financially is that they’re going to reduce our interest rate, so the total payment out would be equal to what a stormwater project could be. They are not writing us out a check, they are just charging us less money for a project in the sewer sector, and stormwater is getting a ‘free’ project out of it,” Rabidoux explained.

If the voters give it the green light, work will begin in the spring.

 

SOURCE: Miranda Jonswold, Correspondent