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Waitsfield Water Task Force recommends cost shift to all taxpayers

Waitsfield’s Water Task Force is recommending that the town shift some costs of the municipal water project from system users to taxpayers in general because some of the costs are associated with improved fire protection.

The select board received the proposal and discussed it at its October 8 meeting. The Water Task Force is recommending that water project costs associated with fire protection should be shared by all taxpayers.

Since its conception, engineering, financing and construction, all costs associated with the water project were to have been paid by its users. To shift these cost now to taxpayers in general is a significant change, although the cost is not significant now; the task force estimates the costs to be shifted to the taxpayers equals about $8,000.

The $8 million project is slated to go online in November. It will provide water to Waitsfield Village, Irasville, Old County Road, the town offices, school and fire station as well as the Wait House and VerdMont mobile home park.

As originally presented, and as presented to voters for bond vote approval, users of the system would pay for both the debt service and the annual system costs. Annual operating costs are estimated at $50,000 and debt service is anticipated at $124,720 annually.

Earlier this year, faced with project cost overruns, the task force and select board sought out additional USDA Rural Development funding. While awaiting word on whether the town would receive the additional funding, the select board discussed with the task force the fact that the water project included hydrants for fire projection in the service area and the fact that the water main size was doubled to accommodate those hydrants. Additionally, the holding tank for the water project was increased by 60 percent to supply water for fire protection.

According to the task force, the construction cost of the hydrants, water main and tank that can be attributed to fire projection are $1.3 million-plus.

Taking that information one step further, the task force came up with an estimated cost of that additional fire protection for those who live in the service area.  According to the task force memo, “Operation costs include significant costs that are attributable to the fire protection provided by the water system.”

“The select board has always been clear that the connected water customers must pay for the cost of the water system. The Water Task Force, however, believes it is not fair that the connected water customers subsidize the cost of fire protection for the town,” task force members wrote in their memo to the select board.

The task force notes that in addition to the ERUs which the town will use for town offices, Wait House, fire station and library, the fire department itself will be a user of the water as well, using 11 ERUs per year. An ERU is an equivalent residential unit that is approximately how much water a three-bedroom house would use.

The task force laid out several different scenarios for how the entire tax base could pay for the fire protection infrastructure and water usage.

  1. The 170-plus properties in Irasville and Waitsfield Village could pay a prorated portion of the fire protection costs annually.
  2. Properties within 1,000 yards of a hydrant pay a prorated annual charge (these properties save insurance of approximately $35 per year for residential and higher amounts for multi-family and businesses); or
  3. Fire protection costs in the annual budget at an estimated annual cost $0.0025 on the town’s tax rate.

The task force is recommending the third option and suggests that the annual cost either be collected by adding it to the budget of the volunteer fire department that serves Waitsfield and Fayston or that the town add to its budget a sum equal to 19.2 percent of the annual operational costs of the system.

Billing for fire protection costs through the fire department budget would cost $8,041 and through the town’s budget, at 19.2 percent, would cost $8,127.

The task force also recommends that, unlike regular system users, the fire department would not have its water metered nor pay for its per gallon usage via metering.

The select board discussed the task force memo, considering the impact of adding to the town budget or the select board budget and whether it should be brought before voters as a separate article at Town Meeting in March. If the fire protection costs are added to the fire department budget, those costs will be shared by Fayston taxpayers as well. The fire department serves Waitsfield and Fayston with Fayston covering 40 percent of the costs of the budget.

 

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# cost shiftMichael Egan 2012-10-18 07:59
send Virginia Houston the bill!! she is very generous
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