Board brainstorms on how to cover sewer funding gap

Aug 2, 2013

A number of ideas were bandied about at a workshop Thursday afternoon at which the Board of Selectmen discussed how the town is going to cover the $1 million gap created by the capping of sewer betterment fees at Town Meeting in the fall of 2012.

The board discussed options that included dipping into retained earnings and using money generated by the meals tax.

The point of the cap was to make right what residents and members of a neighborhood group argued was an unfair assessment method that left residents in Oakdale and Cromesett paying more than their fair share of the cost of the town's sewer expansion project.

Here's some background:

A "betterment fee" is the fee paid by residents to connect to town sewer, as many have had to do after the "Comprehensive Wastewater Management Plan," identified seven "needs areas". The intent of sewering these "needs areas" is to reduce pollution and otherwise maintain the town waterways.

Residents may pay the betterment over 20 years.

Betterment fees for other projects have ranged from $12,000 to $17,000, and the neighborhood group argued that dividing the cost of the sewer expansion project by the total number of properties being sewered would have resulted in a fairer assessment for everyone.

A number of neighborhoods were bundled under sewer expansion contracts. Rather than dividing the cost of the project by the total number of sewered properties, the fee was calculated by dividing the total cost of the sewer project by the number of households in the neighborhoods under the contracts.

When the cap was put in place the task of figuring out how to handle the financial burden fell to the town.

A proposal from Selectman Alan Slavin to use money from the meals tax seemed to be the most popular idea thrown into the mix.

"Basically, that difference could be considered a capital item for the town," said Slavin.

Under this proposal the town would pay $50,000 a year out of the meals tax fund over a 20 year period.

Slavin argued that this method would spread the burden out over the whole town.

"It's not singling out a group of people," said Slavin.

Selectman Patrick Tropeano said that this solution may not fly with people who are not connecting to town sewer.

"It's hard for people who are not getting betterments," to see their taxes go toward paying it off. "I really don't know how we do it fairly."

Selectman Judy Whiteside compared the situation to funding the school system.

"Not everyone who pays taxes has a child in the school system," said Whiteside.

She pointed out that the goal of the sewer project is create a cleaner environment in Wareham which ultimately benefits everyone.

"We need to be able to support a clean community."

Selectman Chair Peter Teitelbaum agreed that as the using money from the meals tax seems like an option with potential.

"The meals tax solution is probably the most creative one I've heard to date," said Teitelbaum.

Town Attorney Richard Bowen said that this potential solution is not without its pitfalls, as the expenditure would have to be approved by Town Meeting voters yearly.

"Once the money goes into the account, to actually appropriate the money out for any particular purpose would require Town Meeting approval," said Bowen. "It would have to be an annual choice for voters."

Tropeano pointed out that the fact that voters would have to approve the measure year after year could render the solution ineffective.

"Town Meeting could say no...and you can see the argument," said Tropeano. "The people who haven't been bettered are going to have a case to make."

Resident and former Chair of the Finance Committee, Frank Heath addressed the board saying that the town of Barnstable used its meals and hotel tax to cover the cost of a similar situation it faced.

"I would recommend that you talk to officials in Barnstable because they've done this," said Heath.

Heath went on to say that Town Meeting voters are a relatively small sample of the population, and part time residents don't get to vote on the sewer issue even though they are affected by it.

"When you sit here and talk about sewer users you are - at least in my mind - representing all sewer users," said Heath. "Use the best solution, not the political solution."

Resident, and former Chair of the recently disbanded Clean Water Committee Edward Pacewicz, said that he opposed dipping into retained earnings to cover the gap, but the  meals tax solution sounds like it could work.

"I think the solution you came up with is the fairest solution if you can do it," he said.

Another potential solution discussed was to take the money from the Water Pollution Control Facility's retained earnings fund. This fund is comprised of any surpluses and is generally used to pay for unforeseen issues.

The fund currently stands at approximately $3.5 million. The retained earnings fund is comprised of any surpluses, and is generally reserved to pay for any unforeseen issues that may arise.

Campinha has stated at previous Board of Selectmen's meeting that the facility spends approximately $125,000 per year on emergencies. The sewer systems in Onset and Swifts Beach are aging, and unexpected repairs are a big reality.

Teitelbaum pointed out that even as they look for a solution the gap is a "fluid number" due to the potential for residents to seek abatements, as some already have.

"In the layout of the sewer project it's become apparent that not enough was done to identify suitable properties," resulting in betterments being assessed on an unknown number of unbuildable lots.

In addition to finding a way to cover the funding gap created by the cap, the town is dealing with the aging sewer systems in Onset and Swifts Beach. Some of the systems date back to the 1970s.

"Anything you build will break. Anything you build in a water table will break faster," said Whiteside.

Many sections of the Onset and Swifts Beach sewer systems are in the water table, some all the time and some when the tide is high.

"The actual potential is quite great for pipes collapsing," said Slavin.

The board will revisit the issue as they try to come up with an equitable way to fund the gap.

"This is just the first step and we really need to make a tough decision about what the next step will be," said Slavin.