Middlebury explores a single bond for new bridge
January 24, 2008
By JOHN FLOWERS
MIDDLEBURY — Middlebury selectmen on Friday, Feb. 1, will finalize a Town Meeting Day warning that will have huge implications for the proposed in-town bridge project.
As the Addison Independent went to press on Wednesday, town officials were still working with financial analysts to determine whether to ask voters to endorse the $16 million Cross Street bridge in a single vote this March, or divide it up into two or more referenda spaced over two town meetings.
The decision is likely to come down to which scenario will get the town the best interest rate on 30-year bonds it will have to float to proceed with the plan. Officials are hoping to craft a financing scheme that will depend on little or no property tax revenues. Selectmen want to pay back the principal and interest on bonds through a combination of local option taxes, federal highway funds and a promised college contribution of $600,000 annually for 30 years.
“The appealing aspect is the rather attractive interest rates which would be available to the town should we bond for the entire amount,” said Selectman Dean George, chairman of Middlebury’s bridge committee.
Middlebury Town Manager Bill Finger noted officials originally estimated a 5-percent interest rate on bonding for the bridge project. Those estimates are now at around 4.2 percent, with the potential for even lower rates during some of the earlier years of the bond issue.
“The implications of the lower interest rate are pretty profound, with the potential savings over the life of the bond of $4 million to $5 million in interest,” Finger said. “It makes a big difference.”
George added that the town may be able to reinvest the bond during the early years of bond repayments and apply those proceeds toward interest payments.
Selectmen at a meeting on Tuesday acknowledged that they — and the community at large — will be dealing with a flurry of new information and decisions on the bridge during the next few months. Helping drive the process are two looming deadlines — first, the Legislature must give the town the enabling authority to enact local option taxes before it adjourns this spring; and second, bonds must be purchased in June or July to lock in to the best interest rates.
The town also wants financing to dovetail in a manner that does not require property taxpayers to fill a temporary void in the payment schedule.
“The college’s intent … is that its funding begins when the bridge goes into operation; it does not start earlier,” selectboard Chairman John Tenny said. “We have to look to craft a package with that in mind. I’m sure that we can do that. The idea is not to have a property tax obligation in the middle of this while we go from the beginning to a point where the college monies begin to flow.”
With project planning on a fast track, selectmen know they have precious little time to bring taxpayers up to speed before Town Meeting Day.
“I think there’s a tremendous level of uncertainty in the community as to what this project really entails, both financially and design-wise,” said Selectman Bill Perkins.
He said several citizens have asked him about the availability of artists’ renderings of the bridge, and if the public will be asked to “authorize a lot of monies at town meeting.”
“It think we have a lot of selling to do between now and March,” Perkins said.
Officials said some initial drawings could be available next week.
Board members acknowledged the need to give voters more information.
“We want to do our best to catch people up as well as possible,” Tenny said.
NO FUNDING FROM PORTER
In other bridge-related news on Tuesday, Tenny announced that Porter Hospital will not be able to contribute financially toward the bridge, though the hospital will continue to be a vocal supporter of the project.
“(The hospital) has many stresses in the work that it is trying to do financially, so it doesn’t feel it would be prudent or correct for them to be offering a gift,” Tenny said. “They do continue to be wholly supportive of the effort.”
In other action on Tuesday, Middlebury selectmen:
• Approved, for the Town Meeting Day warning, a proposed 2008-2009 municipal budget of $6,776,857, of which $5,423,004 would be raised through property taxes. The spending plan — which would require a bump of 2.53 cents in the municipal tax rate — drew no comments from citizens at a public hearing convened by selectmen at the outset of their Tuesday meeting.
If approved, the new budget would require a 2008-2009 municipal tax rate of 81.61 cents per $100 in property value, up from the current rate of 79.08 cents.
• Endorsed a proposal by the Middlebury Fire Department to buy a new, 2,200-gallon tanker truck for $155,578, using money already contained in the municipal Fire Equipment Fund.
The new truck will replace a 1986 model that is currently stationed in East Middlebury.
Fire officials said they received four bids from truck providers. From those, they selected the bid from the company Four Guys out of Meyersville, Pa.
Firefighter Pat Shaw, leader of the department’s equipment committee, explained the proposal from Four Guys satisfied the department’s needs and met all standards prescribed by the National Fire Protection Association (NFPA).
Selectmen OK’d the purchase, but voiced disappointment that the department couldn’t reach a deal with a local vendor who bid on the contract — G. Stone Commercial Division.
Shaw said that while the department would have like to have contracted with G. Stone, he said the company could not furnish a tanker that would have met all NFPA standards.
G. Stone officials presented two separate letters to selectmen conveying their concerns.