Capital budget would finance loan fund (12/3/09)

Town may finance stormwater repairs

Dec. 3, 2009

By Greg Elias

Observer staff

Williston Town Manager Rick McGuire has proposed a long-range budget that could establish a loan fund for homeowners facing state-mandated stormwater improvements.

The capital budget outlines spending for big-ticket projects over a six-year period. It is an evolving list of expenditures totaling tens of millions of dollars, but it does not actually obligate money.

McGuire said the capital budget aligns with the guiding philosophy for the operating budget that he plans to unveil next week: No spending for the next fiscal year that boosts property taxes during a recession.

“We made a conscious decision not to have any increase in the capital budget that would increase the tax rate,” McGuire said.

Many of the expenditures have for years been in the capital budget, including a new public works building and grid streets around Taft Corners. A pair of ambulances is back after voters in 2007 rejected bond funding to pay for the vehicles and additional staffing.

But the loan fund is new. Under the proposal, the town would use its borrowing power to obtain $2 million from banks, then make low-interest loans to subdivisions that need to upgrade stormwater facilities.

The state is developing rules that would impose more stringent rules on stormwater runoff. The regulations could force homeowner associations to spend thousands of dollars ensuring that stormwater does not end up in waterways classified as impaired, including Allen Brook in Williston.

“I’m kind of floating this as an idea,” McGuire told the Selectboard on Nov. 16. “We have a fair number of neighborhoods that are going to have to spend a fair amount of money to bring stormwater systems up to state standards.”

The problem is that homeowner associations may have limited ability to borrow money, McGuire said. The loan fund could provide low-interest financing for neighbors while costing the town little or nothing.

Details on how the program would work are still fuzzy, but McGuire thinks that existing staff could administer the fund. Money would be loaned at the same interest rate paid by the town.

Scott Hubbard, president of the Brennan Woods Homeowners Association, said as far as he knows his subdivision, Williston’s largest, complies with current stormwater rules, although he still awaits word on updated regulations.

The association could levy a one-time assessment if upgrades were required, Hubbard said. But he acknowledged that the loan program could offer an alternative, particularly if the price tag for stormwater improvements was high.

The capital budget is subject to Selectboard approval. It draws on several funding sources, including state and federal grants and impact fees charged to developers.

The spending plan over time would increase property taxes. But immediate tax hikes were staved off in part by pushing back the projected start date of many projects.

Voters may, however, be asked to approve bond funding for one of the two proposed ambulances as soon as Town Meeting in March. Also on the ballot could be the proposed purchase of additional sewer capacity.

The budget calls for one ambulance to be purchased at a cost of $235,290 for the fiscal year starting next July, with a back-up vehicle to be bought in 2013.

The ambulance proposal rejected by voters two years ago included six new employees to staff the service. A grant would have paid some of the costs.

But the proposal this time would not involve a grant and would add less staffing, McGuire said, noting that he would only include the ambulance service in next year’s operating budget if it does not increase taxes.

A vote on a sewer bond hinges on ongoing negotiations with Essex Junction, which operates a treatment plant also used by Williston and the town of Essex. Williston has exhausted most of its allocated sewer capacity and needs to purchase more to serve future development.

The cost of additional sewer capacity would not increase property taxes. It would instead be funded through connection fees and rate increases for users.

Other bonded expenditures outlined in the capital budget include a $1.2 million public works building to be built in 2013 and grid streets around Taft Corners. The latter project could by be paid for with impact fees, special assessments or by establishing a tax increment financing district.