Council advances wastewater bond ordinances on first reading as town seeks RD and SRF funding

The Town Council advanced two wastewater bond ordinances on first reading and approved a short-term consulting contract as staff and consultants laid out financing options to complete the town’s long-term control plan (LTCP).

Staff and consultants described an LTCP that began in response to a 2008 EPA compliance action. They said eight of ten projects identified earlier are complete but hydraulic modeling and an updated asset-management assessment show additional storage and treatment capacity are needed to remain in compliance and to support commercial growth. "We found out that we were not going to have enough capacity to handle the storm water and we were going to be in non-compliance if we followed the 2008 plan," staff told the council.

The town pursued both the State Revolving Fund (SRF) and USDA Rural Development (RD) funding streams. According to consultants, RD provided letter conditions and an offer to support treatment-plant improvements that the meeting recorded as about $28 million for construction; RD-related ordinance language includes a not-to-exceed parameter shown in the draft documents (the RD ordinance materials included a not-to-exceed figure of $37,161,000). Bond counsel explained why the town is presenting two separate ordinances (RD and SRF have different covenant and issuance rules) and how a bond-anticipation note or bond bank process would be used for construction financing if RD terms are used.

Council approved the introduction (first reading) of both general ordinance number two and general ordinance number three; the meeting record shows the ordinances were moved, seconded and advanced on first reading. The council did not take a final vote of adoption on the ordinances at this meeting; staff said a public-notice period and next steps will follow.

To support a request for a multi-year extension from the state agency and to model rate impacts, the council approved a not-to-exceed $10,000 contract with Baker Tilly to prepare a financial-capabilities analysis. Council also voted to proceed with bond-authorizing steps consistent with the RD and SRF drafting strategy presented by bond counsel and finance advisors.

Speakers urged attention to rate impacts and timing; staff said they were seeking an extension from the state (to be decided roughly by July) that could delay major construction and reduce initial rate pressure on customers. No grant funding was available in the offers cited at the meeting because both agencies considered the town’s current sewer rates too low for grant prioritization, staff said. The council recorded the motions by voice vote and directed staff to continue coordination with Commonwealth, Baker Tilly, and bond counsel on the finance timetable and public-notice requirements.