Eastham Finance Committee
December 14, 2011
Eastham Police Conference Room
5:00PM
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Members Attending: Cole, Beyle, Knox, Cannon, French, Balmer, Krum
Others Attending: Town Administrator Sheila Vanderhoef, Chief Kulhawlik, Selectman John Knight and Paul Gabriel and Mark White of Environmental Partners
Chairman Russell French called the meeting to order at 5:05 pm.
Replace Pick-Up Truck
The Town Administrator reviewed the need to replace the Police Department pickup truck and recommended its replacement before the beginning of FY 13. The estimate to replace the vehicle is $40,000. The trade-in value is $9,000. Depending on how a lease for the replacement vehicle is set up, an additional $5,000 to $10,000 over the available funding is needed to replace the vehicle. The Reserve Fund balance is $65,000. The Finance Committee agreed to fund the balance of this expense. The Town Administrator will return to the Finance Committee in January to finalize.
Water Discussion Environmental Partners (PowerPoint Presentation is attached) Engineering and financial plans to provide Eastham residents and businesses access to municipal water in affordable phases were presented. Mr. White and Mr. Gabriel presented a PowerPoint describing the proposed Eastham municipal water project. At buildout, the system would provide an average of 1 million gallons a day year round and 1.88 million gallons a day in summer to 1400 connections. Wells exist on public land to meet the town's water needs with pristine water. Water mains would be on both sides of Route 6 outside of the state paved roadway. After the project's first phase, 75% of the town would have fire protection and most of the town's commercial enterprises would have access to municipal
water. Mr. White and Mr. Gabriel emphasized their efforts to refine data so that there are no surprises as the project unfolds.
Eastham could add to or substitute development of its own water supply by purchasing water from the Town of Orleans. The costs for Eastham to purchase Orleans water have not been determined. If using Orleans' water, Eastham would still need to pay for and construct its own water delivery system. Orleans may not be able to supply 100% of Eastham's municipal water needs so Eastham may still need to construct and pay for the development of wells to provide treated water. Orleans’ additional supply of treated water may not be necessary or advisable for Eastham except to provide an inter-connect for emergency water supply for both towns. Even if Orleans could supply 100% of Eastham's water over the long term, a disadvantage to Eastham of relying solely
on
Orleans' water supply is that Eastham will be subject to the control of another town regarding water supply.
Ms. Vanderhoef explained the proposed 30 year financing plan which includes several bonds. Costs will be funded by taxation, betterments and user fees. The use and timing of betterments for this project will match the users' phased access to municipal water. The betterments would be similar to real estate taxes because they are best on property valuation and are deductible from federal taxes. The financial plan is conservative an includes no grants at this time. At the end of the project, there would be an $18 million reserve fund.
Some Finance Committee members asked for more information to promote public understanding Including 1) Data on financial benefits to residents, such a potentially reduced homeowners’ insurance, that will offset project costs to consumers, 2) Information on how a purchase of water from Orleans could fit into the Eastham municipal water plan, 3) How the project relates to the town’s wastewater needs.
The relationship of the municipal water project to proposed municipal wastewater collection and treatment was discussed. Eastham groundwater samples show that 40 to 42% are impacted by seepage from septic systems of nitrates and other chemicals including pharmaceuticals affecting drinking water and the town's ponds and embayments. The town's wastewater study's top recommendation is for the town to first build a municipal water system. Sewering the entire town would cost at least five to ten times more than municipal water. Because groundwater moves slowly, even after sewering is complete, it will take 20 years until the water was not affected by septage. For these reasons, the water project should proceed before the wastewater project.
Ms. Vanderhoef noted her concerns about over-selling potential consumer savings from “cost avoidance” that may result from a municipal water system. Cost avoidance as the sole basis to promote the municipal water project at Town Meeting risks making promises that can’t be kept.
The next steps will be an updated report to the Board of Selectmen in February on available grants and on the costs and value of a potential purchase of water from Orleans. The Board of Selectmen will consider whether to ask Town Meeting to approve authority to borrow the remaining $35 million of the $111 million needed for the project. $76 million was approved by ballot by Eastham voters. Before the project can proceed there must be authority to borrow the entire cost of the project.
The meeting adjourned at approximately 7:45 PM.
Respectfully submitted, Nan Balmer
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