The Wellington Village Council on Tuesday rejected its engineer’s report recommending $23 million in flood prevention measures, saying that it did not cite enough positive results to justify the cost.
However, council members agreed to a $30 increase in assessments for the Acme Improvement District in order to step up maintenance on the village’s drainage and roadways.
Included in the preliminary 2015 capital budget is $2.4 million toward Acme’s 10-year flood mitigation program.
Councilman Matt Willhite noted that some of the Acme drainage infrastructure put in place 30 years ago has started to fail. He also pointed out that some of the projects on Acme’s capital improvements list had actually already been started this year.
“We didn’t start the assessments but we started the improvements, and we’ve already started moving forward on some of those,” Willhite said. “We’ve said collectively over the last year that we need to do some of these improvements. We need to do them at the request of our residents.”
Willhite pointed out that they had talked about the engineer’s report but had not decided how to move forward.
Councilman Howard Coates said he was concerned about a $100 per unit assessment increase for stormwater mitigation on Acme residents.
Coates asked Village Engineer Bill Riebe how he arrived at the benefits to Acme residents as opposed to an ad valorem increase.
“As I understand it, the $23 million in capital projects that you are estimating, approximately $8 million is very specifically related to Acme and approximately $15.4 million are of village-wide benefit,” Coates said. “I think this is going to be a very important issue for a lot of the people in this room tonight.”
Riebe said his analysis was not based on village-wide benefits but on what projects they could attribute to Acme, which has more specific guidelines it must follow as a special taxing district.
“I broke out drainage-specific projects, and then the other projects, roadways, were attributed to ad valorem,” Riebe said.
Coates also asked about the council’s policy to “pay as you go” in order to reduce debt, which he said might not benefit residents who will not be in their homes for the lifetime of the benefit, as opposed to a bond issue, which would be paid off over a period of years.
Riebe said the pay-as-you-go strategy is often the cheapest option due to inflation as well as interest on a bond, but that strategy can backfire if inflation or high interest rates set in, as they did in the 1980s. “If you use a bond, you lock in. I used 4 percent for this analysis. You lock in that risk so you know that it’s going to be 4 percent and you’re not so much at risk of inflation,” Riebe said.
He added that construction costs, which have been very low for the past several years, are starting to go up again with the economy rebounding. With a bond issue, they can also complete projects more quickly, he said.
Village Manager Paul Schofield said that with a bond, they can shorten the construction horizon, but there are advantages of having the assessment through Acme.
“The advantage the Acme assessment has is scope,” Schofield said. “You have a plan that is defined. You have specific projects that are defined.”
He added that if they finance $23 million, Acme would pay back $2.3 million for 20 years, which would amount to a total of about $46 million. “I don’t think we’re looking at inflationary pressures anywhere near that,” Schofield said.
Councilwoman Anne Gerwig said she thought that the engineer’s report stated that the overall benefit of the improvement project was questionable because the project would not gain water storage or discharge.
“This doesn’t really make a whole lot of difference to the drainage issue,” she said. “The only real way to solve our problem is to discharge faster or store more water, and this plan does neither one of those. To me this seems like more of a maintenance issue.”
Vice Mayor John Greene said he would prefer not to have the assessment tied to what he felt amounted to a maintenance program.
Mayor Bob Margolis agreed that it is difficult to have an assessment where the benefits cannot be seen right away, and agreed with Willhite’s suggestion to do a smaller assessment and tend to the more pressing projects in the engineer’s report.
“I’m in agreement with Councilwoman Gerwig,” Margolis said. “I don’t see the benefit.”
Willhite made a motion to reject the report’s recommendations, which carried 5-0.
