As many of you know, during times of high water use, Bennington's water system experiences periods of low pressure in certain higher elevations of the system, more specifically the Crescent Boulevard and Jefferson Heights neighborhoods. That is, the water pressure falls below the amount required by federal standards for municipal systems. During these times, the hospital may suffer some reduced pressure or inconsistent pressure flows. The state has mandated that the town address this problem beginning 2018.
The town's planning efforts to determine the most cost-effective solution to this problem have long focused on the construction of a new water tank on the easterly slopes of Mt. Anthony above Southern Vermont College. The entire project includes a water tank (750,000 gallons), water mains to serve it, and improvements within the system to provide adequate water pressure to those areas not now in compliance.
The total estimated cost is approximately $5 million. The worrisome part of this project has been the financing. Given the state's ranking system, the project is not eligible to take advantage of the state's Water System Loan Program that provides extremely low interest rates.
Within the last year or so, the town became aware that SVC is high on the state's water infrastructure priority list for monies to improve its internal water system now fed by wells. Recognizing that SVC can address its water system issues by tying into the town's system, and the town's water tank project requires the installation of water mains on the college's campus, the town and SVC agreed to pursue the town's project together.
The cooperative approach means that both entities benefit by SVC's placement on the priority list and by the town's readiness to move forward with this much needed water tank project. In this agreement, SVC becomes a town water system user at its cost, participates in the financing of the project at an appropriate share, and provides the town access to the appropriate elevation for its tank.
The advantage to using the state program is that the interest rate is fixed at a low 3 percent, and the first payment is not due until two years after the project is completed. If the project goes forward next year (2014) and is completed in 2015, the first payment will not be due until 2017.
This portion of the project will cost an estimated $3.3 million. It includes a water main running off Monument Avenue at the entrance to the SVC athletic fields, a pump station in that vicinity to pump the water up to the tank, water mains running up through the college thereby providing service to the various college facilities, and the water tank that will be located above the college on the slopes of Mt. Anthony.
SVC has agreed to participate in a portion of the cost of water main construction and the pump station, and will pay the entire cost of the connections for its facilities. The town will cover the remainder, including the cost of the tank. SVC will pay its share annually as part of the financing cost as well as pay for the water it uses.
How will this impact the water rates? The current estimated annual payment for the $3.3 million is $230,000. SVC will pay approximately $50,000 annually leaving the town's share at $180,000 annually.
There are two possible impacts: The town, now spending $400,000 each year on system improvements such as Northside Drive, would cover the annual loan payment by reducing the amount it spends on water line improvements thereby having no impact on the rates; or the total cost would be added to the budget's bottom line and raise rates by $35 annually (based on current FY14 budget) for the flat rate customer. This increase would be mitigated to a small extent by the elimination of the bond payment for the Burgess Road water tank. Ultimately, a decision will be made by the Select Board.
Remember, if anyone has any questions or suggestions arising from this column or on any town matters, please contact me at 442-1037 or stop in at the Town Offices on South Street.
Stuart Hurd is Bennington's Town Manager. He writes a monthly column on town issues for the Banner.