Come Tuesday, Nov. 6, Mainers will make a decision on five referendum votes: included among those questions are bond issues addressing transportation infrastructure funds and drinking/wastewater funds.
Next week’s issue of the Aroostook Republican will contain articles on questions 1, 2 and 3.
Question 5
By Natalie Bazinet
Staff Writer
At the bottom of their referendum question ballot, Mainers will have the option to vote yes or no on a $7.9 million bond that will replenish the revolving loan fund for public drinking water systems and for wastewater treatment facilities.
Formally, Question Five will read “Do you favor a $7,925,000 bond issue to be expended over 2 years for revolving loan funds for drinking water systems and for wastewater treatment facilities, which will make the State eligible to secure $39,625,000 in federal grants?”
It’s no coincidence that the $7.9 million amounts to 20 percent of the potential federal grant funding; according to officials with the Maine Water Utilities Association, Question Five is the 20 percent match needed for the 2012 -13 State Revolving Fund Capitalization Grants.
The $7.9 million bond actually allocates funds for two separate revolving loan funds — $3,590,000 for the Department of Health and Human Services over two years for the revolving loan fund for drinking water systems, and $4,335,000 for the Department of Environmental Protection over two years for the revolving loan fund for wastewater treatment facilities.
These programs allow for departments and utility districts to apply for loans that fund wastewater or drinking water facility improvements and upgrades.
This summer, for example, the Caribou Utilities Department completed a water main replacement project that was funded by a loan from the State Revolving Loan Fund (SRLF), through the Maine Drinking Water Program which is through DHHS.
“The pipe we replaced on High street, at least part of it, was some of the original water pipe that was place in Caribou in 1889,” explained Caribou Utilities District General Manager Alan Hitchcock.
By utilizing the loan fund, the district was able to obtain a loan at approximately 1 percent.
Hitchcock explained that had they not been able to access a low-interest loan through the SRLF, the district would have had to borrow through conventional borrowing with much higher interest rates.
Having borrowed $431,420 for the project at an approximate one percent interest with a 20-year payback period, the water main replacement will cost roughly $501,233.
“The project was crucial,” Hitchcock explained. “It’s a fairly high density commercial area,” he said, explaining the structures that line the street include a supermarket, the fire department, a bank, the library, Caribou’s municipal building and a gas station, as well as various shops, stores and residences.
“It is important that we replace infrastructure on a regular schedule, and the ability of districts to borrow from the revolving loan fund allows us to do this at a lower cost than if we had to borrow commercially — and that’s reflected in the rates we charge to our customers,” Hitchcock explained. “If we had to borrow at higher rates, our customers would have to pay more in our rates.”
“The bond issue allows replacement while keeping rates as low as possible,” he added.
In neighboring city Presque Isle, the Superintendent of the Presque Isle Water District Steve Freeman explained that his district was able to obtain SRLF funding for a project they completed this summer as well, a reconstruction project on South Main Street right in front of the University of Maine at Presque Isle campus that utilized both water and sewer loan funding.
Though the final cost of the project was less than anticipated, the district originally secured about $100,000 for wastewater improvements and $686,000 for drinking water improvements — loans that were secured with a very low rate of approximately one percent.
“It’s almost two percent below the market rate, so it’s a good time to do projects if you have projects to do,” Freeman explained, adding that one section replaced through the project was older than 1910.
Question 4
By Lisa Wilcox
Staff writer
AUGUSTA — Maine voters will decide five referendum questions on the Nov. 6 ballot. Referendum Question 4 reads: “Do you favor a $51,500,000 bond issue for improvements to highways and bridges, local roads, airports and port facilities, as well as for funds for rail access, transit buses and the LifeFlight Foundation, which will make the state eligible for at least $105,600,000 in federal and other matching funds?”
Based on information obtained from the Secretary of State’s Guide to the Referendum Election, the League of Women Voters Voter Guide and the non-partisan website Project Vote Smart, this act would authorize the state to issue bonds in an amount not to exceed $51,500,000 to raise funds for many projects. The bonds would run for no longer than 10 years from the date of issue and would be backed by the state.
Proceeds from the sale of these bonds would be administered by the Department of Transportation for the following purposes:
• Highways and bridges. The bulk of the funds, $41 million, would be used to repair and reconstruct highways and bridges deemed vital to expansion of business interests and essential to public safety. It is anticipated that this would make the state eligible for at least $72 million in federal matching funds.
The act requires the DOT to consult with the business and economic development sector in order to determine projects of the highest priority to that sector. In addition, a stakeholder group of municipal officials, highway safety officials and members of the general public must be formed to develop a priority list of highway and bridge projects to address the safety of the general public.
A recent amendment to existing law also provides a system by which the department is required to establish priorities, customer service levels and goals for capital improvements to the state’s public highways.
• Medical helicopter service. LifeFlight Foundation, which provides a medical helicopter service that transports critically ill and injured patients to hospitals statewide, would receive $300,0000 to install a network of automated weather observation stations as well as to construct helicopter landing pads located in remote areas and in rural communities with high levels of usage. These funds would be matched by $300,000 in funding from local governmental sources.
• Port facilities. Three million dollars would be spent to dredge the commercial shipping channel in Searsport, which serves the existing port operation at Mack Point. It is expected that this funding would make the state eligible for $10 million in federal funds through the Army Corps of Engineers.
An additional $2 million would support the purchase of material handling equipment for use at Mack Point. This funding would be matched by an equivalent amount of investment by private entities.
Another $1.5 million in bond proceeds would be used for construction of warehouse facilities at the port of Eastport, which is owned and operated by the Eastport Port Authority.
• Bus service. One million dollars would be used to help purchase new transit buses operated by governmental entities located across the state. It is expected that these funds would secure approximately $9 million in federal funding through the Federal Transit Administration.
• Industrial rail service. One and a half million dollars would support the Industrial Rail Access Program, which is an existing DOT program that provides 50 percent matching grants to private businesses for improvements necessary to increase freight transportation by rail. Because these are matching grants, this funding would trigger an additional one and a half million dollars in private investment.
• Aviation facilities. One million two hundred thousand dollars would support projects at publicly-owned aviation facilities across the state. This funding is expected to be matched by $10,800,000 in federal funds administered by the Federal Aviation Administration.
If Question 4 is approved, the authorization of these bonds would take effect 30 days after the governor‘s proclamation of the vote.
According to figures compiled by the Office of the Treasurer, the total estimated lifetime cost of borrowing this amount of money is $64,246,250, representing $51.5 million in principal and $12,746,250 in interest, assuming 4.5 percent over 10 years.
A “yes” vote favors the issuance of up to $51,500,000 in general obligation bonds to finance these projects. A “no” vote opposes the bond issue in its entirety.
Arguments for a “yes” vote include: use of bond funds could result in jobs and may help economic growth in the state of Maine; this bond could improve public safety; and the federal government will help pay for the work. It will give Maine $105 million more.
Arguments for a “no” vote include: it would add $51 million to Maine’s debt; and other projects may be more worthy of the state’s money.
No public comments in support of or against the referendum had been filed at presstime.
