water under the bridge?
Two weeks ago, the Selectboard announced our intention to bring two votes to our community related to our water infrastructure in the next two months:
A floor vote on October 29th to acquire the Woodstock Aqueduct Company for $920,000 (about half of the funding coming from grants and half coming from our undesignated fund balance) and;
An Australian ballot vote on December 10th to bond the purchase of the Vondell Reservoir and certain capital projects.
Some common questions I’ve gotten since then:
Why the floor vote then the Australian ballot vote? (aka “Quit Playing Games with my Vote”)
Here we go again. Until we permanently change our mechanism of voting to Australian ballot we will be voting from the floor by voice/raise of hands. Ironically, Vermont statute requires bond votes to be voted on by Australian ballot, so we’ll have one of each.
Of course, someone can make a motion for a paper ballot when we vote from the floor, which I expect to happen on the 29th.
What is an undesignated fund balance?
It’s the part of our budget that isn’t earmarked for specific expenses. As of our last audit, our undesignated fund balance was $1.7m. So, after this expense, we’ll be sitting at ~$1.2m, roughly 15% of our budget which is where auditors like to see it.
Why aren’t we buying it for $X amount?
$920k is the currently the debt of WAC, which we are all currently paying towards in usage and hydrant fees. In exchange for this purchase, we are receiving the company and their inventory (vehicles, machinery, property excluding the Vondell, all listed here). We have been in negotiations for months trying to balance the value of controlling our water system, the necessary investments to be made, and the timeline with which we want to see this achieved. This has been no small feat for our staff, our legal counsel, and our board. WE ARE NOT ASSUMING THEIR DEBT.
It’s important to note that there isn’t an alternative water company we could purchase for cheaper. Our residents are paying either way, and I consider it to be less offensive/maddening to own the company than to pay their debt (and the interest on it) while they still own it and poorly manage it.
Why aren’t we suing WAC ownership?
The board has no evidence to believe a lawsuit would be less costly or faster than acquiring the water company through a public vote. The State regulatory body recognizes that current WAC ownership has been taking loans to make improvements to the system. Our legal counsel recommends (as does the State) the path we are currently taking to acquire the water company.
Why is the Vondell Reservoir priced at $1.6M?
For starters, it’s 350+ acres in Woodstock 😬 We have negotiated the purchase of the Vondell without restrictions on the land. In addition to being the site of the only water storage tank and the reservoir which was a water source in the past and could be a water source in the future, the land could be an investment for the town. While it is mainly used for recreation now (by hikers and mountain bikers), there are pieces of the parcel that are able to be developed.
It’s 100% up to voters if you want the town to own this land. (It’s in current use right now, so it’s tax bill is roughly ~13k). I am personally for this purchase. I think this land is incredibly valuable to us as a community and could be instrumental in our future (something we have not spent an appropriate amount of time thinking about/talking about/changing for the better)
What am I going to pay?
The board met Tuesday to kick off discussions on this. We agreed that Option 1b (the new water main), the new well & pump, and the Elm Street bridge suspension were priorities for this bond. So the current plan is to exclude the second tank from this bond. With the Vondell, that takes the bond to ~$8.3M.
Let me explain why every parcel is going to pay for the bond: Right now, each parcel pays hydrant fees in their property tax bill. And as the hydrant deficiencies are the main driver of the cost of the bond, I think it’s reasonable for each parcel to continue contributing. The alternative again, is that WAC increases the hydrant fees to cover the costs of the projects necessary to bring them into compliance.
I also think it would be more than strange for only some residents to pay for an asset like the land of the Vondell.
Finally (and at the risk of using a term I loathe in the public sphere) there exists a very slippery slope if we are to start drawing lines where only users are paying for the public goods provided by the government. Should we only ask parents to pay for the costs of public schools? Should we only ask those who use the roads to pay for them? Doesn’t a rising tide lift all boats? We all benefit, directly or indirectly, from a safe and secure water utility - for our businesses, our schools, our municipal buildings, our public safety.
For users, it’s no secret we have been under-paying for water for a very long time. In order to run a successful utility and start capital reserves for future projects, rates have to increase significantly. I don’t think it will be unreasonable to expect at least double digit growth for user rates, but we have to work on what we expect the operating budget to require first.
What’s next?
We will be discussing other funding avenues at the Selectboard meeting this Tuesday - including the local options sales tax we approved this year, and the meals, rooms, and alcohol tax that funds the Economic Development Reserve Fund. I have a lot to say on that but in the spirit of brevity, I will end it here.
Please let me know if you have any questions and please, for the love of cider donuts, limit your exposure to the listserv.
