KEITH WHITCOMB JR. Staff Writer

BENNINGTON -- Voters will say "yes" or "no" to a $3.3 million water bond in March, and on Monday, Feb. 24, the Select Board will offer more information on what the vote means for ratepayers.

The money will be borrowed from the Drinking Water State Revolving Fund at a 3 percent interest rate, said Town Manager Stuart Hurd. The project will consist of building a pump house at the base of Southern Vermont College, running a main line to the campus’ dormitories, then a line to a 750,000 gallon water tower.

The informational meeting will begin at 6:15 p.m. on the third floor of the Bennington Fire Facility at 130 River Street. It will be part of the Select Board’s regular meeting.

Hurd said the annual payment on the bond will be $230,000. The town’s portion is $180,000, while the college will kick in $50,000 and become a metered rate payer. The estimated quarterly water bill for the college will be $3,690, or about $14,760 per year.

The town will not have to begin repayment on the bond until two years after the project’s completion, so no payments until calendar year 2018. Rate payers will foot the bill. Hurd said customers are either billed a flat rate, or have a water meter. The current flat rate is about $111 per quarter, or $444 per year. This will increase by 8 percent if the board does not cut anything from the water budget to offset it. Metered customers are currently paying $4.12 per thousand gallons of water. With the rate increase, they will pay $4.44 per thousand gallons if the board takes no steps to reduce water department spending.

While the cost will fall on rate payers, all registered voters can cast ballots on the bond issue. Hurd said there are between 3,500 and 4,000 customers on the town’s water system. There are roughly 3,000 properties not connected, but some of them are in North Bennington and are customers of the North Bennington Water Department.

The town benefits from the arrangement, Hurd said, because by partnering with SVC the project gets a higher priority on the list of entities seeking money from state revolving fund, which offers lower interest rates than the Vermont Municipal Bond Bank or a private bank.

"Our water system now is not in compliance and at some point we are going to have to face the music," said Hurd.

The Agency of Natural Resources has told the town it must begin getting its water system up to standard by 2017. Hurd said the rate increases over the past three years, a total of 37 percent, have been because for a number of years the board was keeping the water rates artificially low by not accounting for depreciation.

This new project will solve issues with water pressure the town has had with Southwestern Vermont Medical Center, and the neighborhoods of Crescent Boulevard and Jefferson Heights, according to Hurd. At a past board meeting, SVC President Karen Gross said the state has also encouraged SVC to move to the town water system given its size and expected rate of growth.

Gross spoke at a meeting where the board voted to place the bond question on the ballot for Town Meeting. Previously the board had voted to enter into the cost sharing agreement with SVC.

Contact Keith Whitcomb Jr. at kwhitcomb@benningtonbanner.com or follow him on Twitter @KWhitcombjr.