Cape Gazette
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Milton water referendum in question

Change in loan conditions could result in delay of improvements
By Nick Roth | Apr 10, 2013
Photo by: Nick Roth A change in terms from the state's Office of Drinking of water has prompted Milton Town Council to reconsider a referendum to borrow money for water system improvements.

Milton — A change in terms from the state's Office of Drinking Water has prompted Milton Town Council to reconsider its request for funds.

Due to a water emergency in Selbyville, the state will no longer offer principal forgiveness on any loan applications this fiscal year. Milton officials expected to receive up to 30 percent principal forgiveness on a $1.725 million loan for water system improvements – about $520,000 – but the state has designated all of its funds to Selbyville.

Vice Mayor John Booros said the emergency occurred between council's vote to set the referendum last month and the April 1 town council meeting. If he had known there would be no principal forgiveness available, he said, he would not have voted to move forward with the referendum.

“[ODW officials] recommended that if we were counting on any portion of that forgiveness, and I am always counting on forgiveness, that we may want to pull our application and resubmit it in August for next year,” said Booros.

Town manager Win Abbott said Selbyville officials found a residual amount of methyl tertiary butyl ether – a fuel oxygenate – in its water system. The state determined it was an emergency that had to be taken care of immediately, he said. The project's cost will be 100 percent forgiven, leaving no forgiveness for other loan applicants.

Timing is an issue for town officials. With the referendum set for Saturday, April 13, council has to act fast. A special meeting will be held at 6:30 p.m., Wednesday, April 10, for town council to consider withdrawing its loan application or to move forward with the referendum as planned.

Mayor Marion Jones said the town would be taking a risk if it were to hold off until the next round of funding is available.

“We could find ourselves here next year with no forgiveness just a year past without beginning the improvements,” she said.

As of now, the referendum is still on. Town officials plan to borrow money from the state to fund improvements to the water system, including the rehabilitation of an unused well, construction of a new water main and other upgrades. The upgrades would relieve stress on the current system and improve water pressure throughout the town.

Booros said he spoke with ODW officials, who told him that they expect to offer up to 30 percent principal forgiveness again in the next fiscal year.

“There is no guarantee that it's going to be any different next year,” he said. “I just don't want to see us rush into something.”

After receiving all loan applications, officials rank the projects in order of importance. Pennoni Associates engineer Steve McCabe has said at previous meetings that projects that are closer to shovel-ready are more likely to receive funding.

Heather Warren, the Drinking Water State Revolving Fund administrator, said the state receives and average of $8.5 million from the Environmental Protection Agency to use for the loan program. She said ODW often over loans because the state is receiving money back in repayments. The state has loaned an average of between $15 million to $20 million for water projects over the last few years.

Councilman John Collier expressed concern about the town's project falling down on ODW's priority list.

“Right now we're sitting at No. 6 or 7 on the list, which doesn't guarantee that they're going to have the funding to reach that far down on the list to start with,” he said. “If we pull it and wait another year, what happens when we're No. 12? Then we wait another year and we're No. 10?”

Booros said he assumes Milton's need for the funding will be just as important next year as it currently is this year.

Because the item was not on the agenda, council did not take action at the April 1 meeting. Members will reconvene April 10, when they will decide the route they wish to take.

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