Lisa Loomis's editorial of April 23, 2009, entitled "Impressive" has
termed this project a "critical infrastructure for Waitsfield." The
water pipeline which is going to benefit a limited number of users, who
hunted for a municipal bond, suddenly assumed an elevated status. The
term "critical infrastructure" has been adopted to recognize only the
structures, like roads or bridges for example, which if significantly
damaged or destroyed would make it impossible for an entire community
to evacuate or receive aid. If indeed the editorial is right that this
is a "critical infrastructure" than the town can mandate the use of
taxpayer's money for the system.
The bond vote passed because the residents were assured that this
project is self-funding and that there is no tax exposure; that all
costs and expenses would always be fully covered by user fees. This
brings up a second problem. The Waitsfield municipal project contains
holes: $1.5 million engineering debt, litigation costs, underfunded
operation and maintenance, etc. The critics continue to allege that
user fees are not large enough to keep up with the cost. The editorial
mentions the misinformed critics, but it doesn't explain where these
opponents miscalculated.
The town website is not self-explanatory and details on the plan are
few. Moreover, one cannot have a dialog with a website. Based on the
website there is a gap between essential cost and projected revenues.
This is because the operation and maintenance was projected below the
real cost so the user fee could be lowered. The low fee attracted more
users, but it cannot cover the cost. Rather than presenting the bona
fide operation and maintenance costs and projecting the user fee
accordingly, the select board moved a portion of the operation and
maintenance expenses to the "Initial Costs" section, which is not
funded with user fees.
This contradicts the principle that the project is self-funding. Many
of these expenses are not "initial" expenses. They will keep popping up
every year long after the government funds assigned to the "initial"
cost are gone, leaving us with a dire shortfall. At that stage
Waitsfield will not be able to close the gap between essential funding
and actual revenue. The residents may find out only after the fact that
they had been given a project with escalating tax cost hidden under
poorly explained arrangement.
Problems with municipal infrastructures are being reported by the media
across the nation and abroad. The European Union, for example, flooded
municipalities with easy money and grants generating a wave of grand
infrastructure projects which are too expensive to sustain. According
to the media, 5 percent of households in England cannot now afford
municipal water and the number has been growing rapidly. Like the
mortgage crisis, which grew out of governmental policies based on good
intentions and wishful thinking, these ventures are destructive.
In the EU the support for risky projects was often gained through
deceptive practices, and proponents left financial transparency in dust
so the true tax cost was hidden until it was too late. Then the
strapped community was forced to borrow rather than default on the
bond. When a project is allowed to play down the risk, it is
ill-equipped to manage that risk when it finally emerges from the
shadow. Contrary to the private projects, the municipal ventures are
exceedingly difficult to reverse even if the cost outweighs the
benefit. They often weaken a community's economic health.
So is there a problem? The taxpayers can carry a bigger load if the
town connects to the system municipal facilities and the school. In the
future the town can build larger facilities adding more ERUs paid with
the tax money. Certainly operating the system will require
administrative work, which can be done routinely by the town and thus
paid the by the taxpayers. Still, the low user fees might have to be
increased.
The project, which split the local community roughly in half, continues
to generate serious concern, especially among homeowners with lower
incomes. Even if we get through the current severe economic crisis we
are going soon to be confronted with inflation, higher income taxes and
crushing cuts in Social Security.
The funding problem could be solved, however, if the town allows a
dense urban growth in the area thus adding new ERUs. This is a
possibility since there are no mandatory restrictions which would
prevent the planning board from allowing it to happen. But it will
certainly inflate other problems, and especially environmental.
Based on the website it looks that municipality described the financial
exposure too vaguely while advantages were exaggerated. The details are
increasingly technical in nature and one would thus hope that the
select board would write, as promised earlier, a letter to the editor
clarifying the apparent funding problem. This would help the Valley
residents to properly assess the situation, including those with no
access to the internet and those with no technical and analytical
skills.
Matthew Jarosinski lives in Waitsfield.
