SALISBURY — Members of the tiny Ring's Island Water District have a big decision to make tomorrow night, when they decide whether to spend $1.7 million to replace their problematic old water mains on Bridge Road.
Depending on how the decision goes, it could raise water rates by 40 percent on the island's homeowners and businesses.
The discussion and subsequent vote on the project takes place at the 7 p.m. meeting at the Community House on Fourth Street. The water district commission and its manager, Paul Colby, will be on hand to discuss the pros and cons of the proposal and other alternatives. But according to Commission Chairwoman Nancy Sanders, even if the project isn't approved, the need to replace Bridge Road's aging water mains is critical.
"No matter whether (members) agree on the project, it's an issue that has to be faced," Sanders said. "We're hoping for a good turnout on Thursday because this issue isn't going to get any better."
The Ring's Island neighborhood sits on the bank of the Merrimack River, directly opposite downtown Newburyport. It's not an island per se, but it is separated from the rest of town by salt marshes.
To be replaced are 8,400 linear feet of water mains that were laid in 1938, Colby said. Since 1999, there have been 30 incidents along the piping that have needed to be addressed, costing about $100,000. If simple age weren't enough, the mains exist in a corrosive environment, which makes them more vulnerable to breaks and equipment failures, Colby said.
The present opportunity before the members comes from a loan/grant opportunity through the U.S. Department of Agriculture, meant specifically for small water districts. It's money the town of Salisbury wouldn't qualify for because it's too big for the program.
If accepted by district members, the project offers a $1,059,000, 40-year, 3 percent interest loan, along with a $393,000 grant. In order to get the money, the district will spend $248,000 of its own money.
"What makes this work is that it's a 40-year loan at 3 percent interest," Colby said. "And we'd be getting $400,000 for free. That's 23 percent for free."
Kicking in the $248,000 of the district's own money would still leave it enough to cover operating expenses, since there's more than $300,000 in the account, he said.
"Over the years, we've set aside that money specifically for this purpose, to replace the Bridge Road mains," he said.
The budget has $1,270,000 in construction costs, including the costs related to performing the project on a state highway, since Bridge Road is a busy part of Route 1. Some $240,000 is budgeted for engineering, design, oversight and permitting, $20,000 for legal/adviser fees and $170,000 for contingency costs.
The downside of the project is that the loan has to be paid back. The cost will raise residents' water fees by about 40 percent, if the repayment strategy is hiking user fees only, Colby said. An option would be a combined strategy of raising water fees and adding a real estate tax assessment, for the district has the authority to levy taxes. Such a two-part repayment plan would lessen the increase needed in water fees but increase annual tax bills.
The reason the increase would be so steep is because the district is so small, encompassing numerous businesses on Bridge Road from Pleasant Street to the Gillis Bridge, plus homes on First, Second, Third and Fourth streets and March Road. With only 154 customers within the area, dividing up the cost of the new mains isn't spread out much.
"Most of our users — 92 of them — use less than 40,000 gallons of water per year," Colby said. "That's our minimum. The cost is $381 a year."
An interesting facet in this issue is who is qualified to vote on this or any other district issue. To be a voting member of the district, one must be both a registered voter in Salisbury and a resident of Ring's Island, Colby said. That means some of the district's largest water consumers can't vote because they aren't Salisbury voters or Ring's Island residents.
"But we welcome them to come to our meeting on Thursday," Sanders said.
According to district Treasurer Lance Wisniewski, the state Legislature created the district in 1936 when Salisbury's water company didn't want to bring water pipes to the area. The district works as a water distribution system, buying its water from the town and delivering it to its customers on Ring's Island. The town supplies water at two junctions, one at Pleasant Street and one at Second Street.
Going with the USDA loan/grant proposal isn't the only way to handle the deterioration of the district's infrastructure. Some believe there is a possibility of merging with Salisbury's town-owned water system, if both entities can agree on how to do that. But there are a number of hurdles to jump before that might happen, Wisniewski said.
Colby wonders if the town would even want the district, considering the liability of knowing it had to replace all the mains along Bridge Road. Although new meters have been installed and the other mains are relatively new, laid in the 1970s, a project like Bridge Road main replacement isn't extraordinarily attractive, he said.
Salisbury Public Works director Don Levesque can commiserate with the district. He's familiar with that stretch of aging piping.
"I know the town would want to examine the infrastructure in the district, its capital improvement plan and the entire system, just like we did when we purchased the (private) water company (that serviced the town) 10 years ago," Levesque said. "But people who live on Ring's Island are Salisbury residents like anyone else. I know town officials want to help their residents if they can."
Colby said there could be a third alternative. That would be to go ahead with the current proposal, while researching if and how it could merge with the town. Then, the town wouldn't have the liability of replacing the pipes, and the district could still get the benefit of the long, low-interest loan and the almost $400,000 in grant money.