Sewer plant upgrade moves forward, despite legal threats

Below is my coverage of last night’s council action on bond funding for the Winslow sewer plant upgrade. The council’s narrow approval came hours after an utility ratepayer group threatened legal action to block bond funding.

Despite the threat of a lawsuit, the City Council on Wednesday narrowly approved the first step in issuing a bond to pay for a $15.5 million upgrade of the Winslow sewer treatment plant.

The council, by a vote of four to three, approved a line of credit to set the bond process in motion. On March 25, the council is scheduled to vote on the bond’s final approval.

Hours before the vote, the city received a letter from an attorney hired by the Bainbridge Ratepayers Alliance warning of “appropriate legal recourse” if the city approves the bonds.

Attorney Richard Stephens, who did not return calls for comment, charges in the letter that the city failed to fully disclose its “dire financial situation” as it developed its bond proposal. Poor financial footing, according to Stephens, could dampen the city’s reputation, leading to higher interest rates, more stringent loan conditions and higher bills for ratepayers.

Stephens also asserts that bond funding for the sewer plant would violate city rules restricting capital facilities financing and that ratepayers were denied proper due process in the plant’s planning.

“Ratepayers have been denied a seat at the table because a utility advisory committee was never formed,” alliance member Sally Adams. “It’s mandated by law that we have a seat at the table.”

City officials say the Bainbridge Ratepayers Alliance has no legal footing.

“Our attorneys say there’s no merit to the claim,” City Administrator Mark Dombroski said.

The project’s proposed budget includes $7 million in bonds, $7.5 million in Public Works Trust Fund Loans and about $1 million in cash from the sewer fund, according to city documents.

Councilwoman Kim Brackett, who voted against the bond, said the cost to ratepayers and the city’s financial risk are unclear.

“I’m not comfortable with any of this because I don’t know if we can pay,” Brackett said. “I don’t know if the general fund s going to have to pay for the plant. What’s plan B if we can’t finance this?”

Councilors Bill Knobloch and Debbie Vancil also voted against the bond. Both councilors had voted to initiate the project in November 2005, but have lost confidence in the project’s financing and are skeptical about its scope.

“I supported it and was very excited about it,” said Vancil, who estimated that the project has swelled over budget by $10 million since 2005. “I don’t know if this (is going to grow) to $18 million or $20 million.”

City staff strongly disagree with Vancil’s budget figures.

“The idea that the cost has exploded is untrue,” Dombroski said. “And the idea that this started at $6 million – it’s never been that.”

According to Dombroski, the project was approved in 2005 at $9.5 million for construction and $2.4 for design work. Inflation over the last four years has brought the project to about $14.5 million. Additional work related to the project that occurred prior to 2005 brings the total to about $15.5 million.

“This project is on budget and on time,” Dombroski said.