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Soggy ground, decreased tap sales cause sewer plant cost concerns
10/24/2008 By: Carole McWilliams
Sales tax, the life blood of town governments, is looking good in Bayfield this year despite national economic conditions.
Sewer tap fee revenue to pay for the new $7 million sewage treatment plant is another matter.
Town trustees got that information on Oct. 7 along with presentation of the first draft of the 2009 town budget.
The budget shows $2.4 million being spent on the new sewer plant this year, and $4.6 million in 2009. Site work started in July. It has been complicated - and the costs increased - by boggy conditions.
Town Manager Justin Clifton advised that the number of new sewer taps being sold is below the estimated 30 per year that the town was counting on to make debt payments on the new plant.
He told the Times that around 24 taps have been sold this year.
Payments on the loan principal were deferred for a year, but then they will be $367,000 a year, and 30 tap sales covers half of that, Clifton said. "Even if we are only short five taps, that's $30,000," he said.
"The alternative is to raise rates as high as they need to be," he warned trustees.
"As soon as you get the loan, you have to start paying it back," he told the Times. The loan was originally awarded to the sanitation district, which dissolved at the end of 2007, with all functions and obligations taken over by the town.
The first payment was $23,000 in 2007. It increased to $133,000 this year. In 2009 it will be $182,000. In 2010 it will jump to $367,000 and stay at that level through the life of the loan.
Clifton said his goal is to get a year’s worth of extra debt payments set aside in case there is a year with really poor tap sales, but escalating plant construction costs are making that hard. He said the increases are due to general construction cost increases, as well as dealing with the boggy site.