City of Longmont Water System Improvements Ballot Question 3C
Revenue Bonds for Funding Water System Improvements Shall the City of Longmont be authorized to borrow up to $80,000,000 for the purpose of financing water system improvements, including but not limited to the Nelson Flanders Water Treatment Plant Expansion Project and replacement of aging water system infrastructure like treated water storage and raw and treated water transmission lines; and shall the borrowing be evidenced by bonds, loan agreements, or other financial obligations payable solely from the City's water utility enterprise revenues and be issued at one time or in multiple series at a price above, below or equal to the principal amount of such borrowing and with such terms and conditions, including provisions for redemption prior to maturity with or without payment of premium, as the City may determine? Major ProvisionsReferred to the voters by City Council, the proposal is to borrow up to $80 million to improve the water system, including the Nelson Flanders Water Treatment Plant Expansion Project, and to replace aging infrastructure such as transmission lines. The debt will be paid with funds generated by the City’s water utility enterprise. In 2019, the City Council approved a 5-year rate schedule for the City's water utility enterprise that contemplated selling bonds and paying the debt over several years to spread out the costs of the upgrade. The Longmont City Charter requires voter approval to issue revenue bonds for any public purpose. BackgroundAt a recent City Council meeting, members unanimously voted support for this proposal, but believed it should be referred to the voters in the upcoming election. The Newton Flanders Treatment Plant was built in 2005, in anticipation of the increasing inadequacy of the Wade Gaddis treatment facility, built in 1983. The improvements ensure undisturbed and economical continuation of clean water as a general matter of public health and in compliance with Federal law. The borrowing will be covered by a series of water rate increases that were put in place by the City Council last year.
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Yes - For the Measure
No - Against the Measure
• City engineers say that this proposal is the most efficient and economical way of effecting the transition from an aging system to a newer one.
• Using bonding and debt servicing spreads out the cost of needed infrastructure improvements over time to avoid rate spikes, which keeps rates more predictable for users.
• Bond financing results in user rates that are initially lower than if cash were used to fund the improvements and distributes costs more equitably across both current and future residents.
• Bond financing allows the City of Longmont’s Water Utility to make improvements in the near future, rather than waiting until funds become available. Many of these improvements are required by federal regulations such as the Safe Drinking Water Act.
• Short-term, less-expensive repairs are unlikely to adequately extend the life of the water infrastructure system at the level required by regulations.
• Residents will pay more over time due to the bond interest. Although cash funding the improvements would result in higher rates for several years, the long-term rate impact would be lower because there would be no bond interest to be paid.
• The City should not go into debt to fund projects of this type; other sources of funding should be found.
• The COVID-19 pandemic has made life unpredictable; now is not the right time to issue these bonds.
• Short-term, less expensive repairs may extend the life of the water infrastructure system.
• Better ways can be found to maintain older systems in conjunction with the newer one.
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