JAMESTOWN – A plan to use the city’s Wastewater Treatment Plant to leverage money to help address infrastructure and capital equipment expenses, as well as help stabilize the local tax base, may no longer be necessary.
That’s according to Jamestown Mayor Sam Teresi, who told WRFA earlier this month that circumstances have changed since he announced a year ago the possible plan of transferring ownership of the Wastewater Treatment plant in the Town of Poland from the Board of Public Utilities to the Jamestown Local Development Corporation.
Under the proposal, the BPU would sell the plant to the JLDC, which would take out a multi-million dollar bonds to pay for the plant and would pay off the bonds using wastewater fees collected by the BPU.
According to an information sheet from December 2017, the money the city would receive from the transfer proposal would be an estimated $16 million. That funding would then be used to:
- Address aging infrastructure in the BPU’s water and wastewater service system along with upgrades to the wastewater treatment plant itself ($3.5 million);
- Continued energy/structural improvements to city facilities ($2.5 million);
- Enhanced storm water management improvement program ($1 million);
- DPW/Parks Equipment Replacement Fund ($2 million);
- Debt service / Sewer Rate Stabilization Fund ($ million); and
- A Future projects reserve and additional property tax and rate relief ($6 million).
Despite concerns voiced by several individuals and groups in the community, both the City Council voted and the JLDC board voted in December 2017 to start the process of looking into the matter.
Since then, nothing new has been brought forward in public meetings of the city council, BPU, or JLDC.
But last week, WRFA asked Teresi about the status of the proposal and he told us the city now has other options to pursue to address some of the items on its list.
“Things have changed. That model may or may not be necessary any longer,” Teresi said, adding, “But it really never was a structure that we were going to be selling it to the ‘American Sewage Treatment Company’ and parting with control. Much like somebody goes out and takes a home equity line in their property that has equity built into it in order to raise funding to purchase a care, do upgrades, send their kids to college, the city was looking at one point in time to use the equity value in one of our assets to be able to go out and raise capitol to invest in things that would have a payback to the city.”
Teresi specifically noted Jamestown has a stronger bond rating since the wastewater treatment plant proposal was first considered, meaning the city can now borrow money at lower interest.
“The city had its credit rating reduced but it’s since gone up back into the ‘A-‘ category. Standard & Poor’s just bumped our credit rating up in recognition of the steps we’re taking, the progress being made, the state’s willingness to continue to work with us, and an economy that’s looking stronger and healthier. So our credit rating was bumped up for all those reasons,” Teresi noted.
Because of the city’s better bond rating and the fact that the city has less debt to pay off today compared to other recent years, it now has the option if it wants (and if the city council approves) to borrow money to address some equipment issues, including its aging vehicle fleet in both the city fire department and department of public works. Both those departments have lamented to the city council in recent years – including this year – about the pending crisis they could face due to some vehicles being unreliable because of age.
The city would be able to borrow some money if need be. Its debt limit is an estimated $45.3 million and according to city comptroller Joe Bellitto, the outstanding debt at the end of this year will be $13.2 million (29.12 percent of the debt limit). Another $1.7 million of that debt would be paid off by the end of the year next year, under the current 2019 executive budget proposal.