While much attention has been given to the four major capital projects — namely an elementary school, fire station, public works facility, and the Jones library — other large capital projects that will directly affect residents’ pocketbooks have been advancing, and growing in cost, with much less fanfare.
Multiple capital projects for both the sewer and water systems were bundled together last July for a total estimated cost of $18,650,000, and borrowing was authorized by the Town Council. There are separate enterprise funds for sewer and water, and funding for capital improvement projects for those systems comes primarily from water and sewer rates rather than from property taxes, as is the case for most other capital projects.
Last week, the Indy featured an article about the cost creep of the Centennial Water Treatment Plant project, from an estimated $7.44 million in 2017, to $11 million in 2019, to $13.2 million in 2021. In addition to the water system upgrades, capital improvement projects for the sewer/wastewater systems estimated at $7.3 million are also planned.
One such project is for a gravity belt thickener (GBT), a piece of equipment used in the wastewater treatment plant that reduces the amount of water in sludge that must be shipped off for processing, thereby cutting down on disposal costs from the plant. Public Works Superintendent Guilford Mooring in 2018 asked the previous legislative body, Town Meeting, for authorization to borrow $1 million to replace the GBT, which he reported was 20 years old and beginning to fail.
In July 2020, Mooring submitted a new request for the GBT, this time to the Finance Committee of the Town Council, for $2.3 million. The memo from Mooring describing the request did not mention the previously-authorized $1 million. When committee member Marylou Theilman recalled that Town Meeting had “dealt with the GBT” a couple of years earlier, Mooring replied that the 2018 request was “for the design of the GBT, this is actually the construction and installation cost.” A review of the videotape of that May 2018 meeting does not support that claim, however. Mooring did not inform Town Meeting that the $1 million was only for the design and did not indicate that he would be coming back for more funding two years later. [Video here from minute 28:40].
The Finance Committee did not request further explanation from Mooring, or ask why design costs would amount to one third the cost of the project.
The Indy requested clarification from Mooring, and asked if there are any other water or sewer capital projects expected to require funding in the next few years. Mooring responded that the questions should be asked through the Town Manager. “Many of the items are still in development and the information is not finalized,” he said. Town Manager Paul Bockelman has not responded to the Indy’s requests for further information.
In the FY20 Town Budget, a number of future water projects were identified but no cost estimates or timing was provided. Such projects include “significant capital improvements” to the Atkins Water Treatment Plant, and water line upgrades on Northampton Road, North Pleasant Street, Canton Avenue and Harvard Street. Requests for funding authorization for these projects have not yet come to the Council.
Regarding the GBT, confirmation was received from the town finance department that, while $1 million was authorized in 2018, only $500,000 was borrowed since it was reportedly thought the design could be accomplished for that amount. According to a financial report obtained by the Indy, almost $300,000 of the borrowed funds have been spent to date. If the $500,000 balance of the borrowing authorization is not needed, it would be rescinded once the project is complete.
Another sewer fund capital project approved by the Town Council last summer is a “Reuse Water” treatment system, currently estimated at $5 million. According to a memo from Mooring to Bockelman, the need for the reuse water system was driven by UMass’ impact on the Town’s water resources, and will treat effluent water from the Waste Water Treatment Facility so that this non-potable water can be used by UMass, and possibly other customers. The memo states that the $5 million will cover costs “to finalize the process design, procure the equipment, and install the system.” This system could generate revenue for the sewer and possibly the water fund, and would increase resiliency in the water system. While UMass would be indirectly contributing to the cost of this project through sewer rates, residents too will bear the burden of this capital investment that primarily benefits UMass. Mooring and Bockelman did not respond to an inquiry by the Indy about whether the Town has asked UMass to contribute to this project beyond sewer rates.
In order to cover the cost of these sewer-related capital projects, sewer rates are projected to increase for all users from $4.00 per 100 cubic feet in 2020 to $5.94 in 2025. The average annual sewer bill is projected to increase from $480 to $712.80, lower than, but closer to, the state average of $862. Coupled with the projected increase to water bills to cover the Centennial plant and other water system projects, the average Amherst household will likely see a $420 increase in their annual water and sewer bill from 2020 to 2025.
This anticipated increased burden to taxpayers was not mentioned this week when the Finance Committee discussed a proposed plan to fund all four major capital projects, and the likely impact of a debt exclusion override for a new school on property tax bills. For home values of $350,000, the maximum annual increase from a school override is projected to be $341.84, which, when added to the average $420 increase in water/sewer rates, could pose a significant burden on some taxpayers.