Posted on April 11, 2020
WESTERLY — Plans to dredge Winnapaug Pond encountered a snag this week when members of the Town Council expressed surprise that a referendum may be required as a condition for borrowing funds for the project from the Rhode Island Infrastructure Bank.
On Monday, Town Manager J. Mark Rooney drew the council’s attention to a March 10 memorandum to the council from Lisa Pellegrini, director of the Development Services Department, in which she states the council would have to approve taking a five-year loan from the bank that would be paid off in $200,000 installments and then seek the approval of voters before refinancing to pay the loan off over 10 years. The council had previously discussed a 10-year loan that could be paid off in $100,000 installments, and Rooney’s recommended 2020-21 town budget envisioned a 10-year loan, but until Monday the council had not discussed the need for a referendum or Pellegrini’s memorandum.
According to Pellegrini’s memorandum, the Infrastructure Bank will require approval by voters if the town wants to pay the loan off over 10 years. The five-year repayment plan would not require a referendum. The $1 million, to be borrowed, is needed to cover the non-federal matching requirement of a grant offered by the U.S. Army Corps of Engineers. The Army Corps plans to dredge the pond sometime from October to January as part of a $2.7 million eel grass restoration project but needs assurance of the town’s financial match before it can put the project out to bid and before November when the referendum would occur. On Monday, Pellegrini provided written assurance that the Army Corps has funds for the project, plans to move forward, and anticipates awarding a contract in August or September.
Councilor Sharon Ahern, during the council’s meeting Monday, said paying the loan off over five years would be more of a strain at a time when the council is trying to keep a close eye on spending because of the economic effect of the COVID-19 virus.
“This changes everything … I’m not at all confident this would pass” at referendum, Ahern said.
Ahern later asked if town officials could speak with representatives of the Infrastructure Bank and other state officials to explore whether a 10-year pay off could be approved by the bank without a referendum and whether the state can help the town with the non-federal match.
“I think we need to try harder to keep this at the $100,000 … I didn’t understand it, to me it’s new information. I guess I overlooked it,” Ahern said.
Rooney agreed to have his staff speak again with the bank and other state officials.
Councilor Caswell Cooke Jr. said the council could simply inform the town’s voters that the council had decided the offer of federal funds to dredge the pond was too significant to turn down and that the pond must be dredged to help protect the town’s beach economy and the value of property near the pond.
“We really need to look at the fact that we are at the end of a 15-year push to dredge the pond. It’s completely teed up to do it and it’s going to protect a natural resource,” Cooke said.
Councilor Suzanne Giorno, who initially called news of the needed referendum and the possibility of having to pay the loan off in five years “a shocker,” said she agreed with Cooke but stressed the need to explain the funding plan to residents and taxpayers.
“Is it a shocker, the $200,000 vs. the $100,000? I think so, but I know we need to do it. As long as we’re open … we have to explain it to people,” Giorno said.
Councilor Karen Cioffi, who was initially skeptical of plans to dredge the pond because of her concerns with a 2018 dredge that removed a small amount of sediment, said she agreed with Cooke that the project should go forward. The proposed project would remove about 75,000 cubic yards of sediment from the pond, an initiative that scientists say will improve water quality and habitats in the pond.
The town’s non-federal match would also be used as a match for a $2.4 million U.S. Department of Agriculture Natural Resources Conservation Services demonstration project aimed at reducing nutrient loads that have a detrimental effect on the pond.
Finance Director Dyann Baker said that the town’s first full payment, whether it’s $100,000 or $200,000, would likely not be due until sometime during the 2021-22 budget year.
The council is expected to resume its discussion of the dredge project during a meeting scheduled for Monday at 6 p.m. and could vote on a financing strategy at that time.
Source: thewesterlysun
