DANBURY No choice on $102M sewer plant
DANBURY — A $102 million bond referendum planned for November’s election puts Danbury voters and city officials in an unusual dilemma.
Referendums are supposed to offer voters a choice on whether and when to borrow a significant amount of money — in this case to fund federal- and state-mandated upgrades to the region’s wastewater treatment plant in Danbury.
But city leaders say this particular referendum essentially leaves voters with no choice.
Because of Danbury’s years-long fights with state and federal environmental officials over stricter pollution reduction standards at the plant, the city has been ordered to begin these upgrades whether voters approve them this year, officials say.
“You don’t have a choice,” Public Works Director Antonio Iadarola warned last week.
If the council chooses not to put the referendum on the ballot or if voters turn it down, Danbury utilities officials could miss deadlines in their state permits, lose tens of millions of dollars in matching funds for the project, face severe fines and still have to pay for the upgrades anyway.
“At that point, it’s going to become an emergency,” Iadarola said. State authorities “will force the hand of compliance, which they’ve done in the past, as they’ve done in other communities. It eventually will come to that. The only thing we can do now is plan for the funding of this project; do our due diligence in securing as many grant monies as we can.”
But there’s one more caveat: City officials can’t say how much the borrowing will cost sewer customers — the only city residents who would pay for the project — until next spring or summer, long after the referendum needs to be approved.
“There is a gray area,” Mayor Mark Boughton said. “I wish I could tell people we’re definitely going to get so many millions in grants and so it will only effect your rate this much, but I just can’t. There are too many variables. But we know that if we don’t do this, the penalties will be steep.”
‘A little bit tight’
A majority of the 20 sitting City Council members begrudgingly agreed last week to pursue the referendum by a vote of 13-1, with several absences.
The council must vote once more at its meeting Sept. 5 to finalize the referendum in time for the state deadline to place it on the November ballot or risk derailing the plan. That vote will require a supermajority — with 14 votes in favor — which council members expect to happen.
“The timeline is a little bit tight, but there’s really no way to avoid that,” city corporation counsel Les Pinter said. “There’s enough time, but not more time than needed.”
The referendum is the last stage of a fight that began before 2008, when the state Department of Energy and Environmental Protection ordered the city increase its water treatment to remove 98 percent of phosphorous from the water leaving the plant.
Danbury and about a dozen other municipalities unsuccessfully fought that order, and the state has since required the upgrades to Danbury’s plant as part of the facility’s current permit.
That means city must overhaul the plant by 2022 to be able to meet the higher 98 percent mark, up from 90 percent phosphorous removal today.
The state will help pay for portions of the project, but only if the city designs and bids it by next year. But funding must be in place to bid the construction, Iadarola said.
If voters deny the referendum, the city likely faces three unappealing options, Pinter said. The council could ask for a re-vote with an uncertain outcome; officials could hope the state would entertain new negotiations; or the city might have to consider a last resort to privatize the system, he said.
Those parameters make the bond one of the highest stakes referendums in the city’s history.
“This is without a doubt the biggest project I can ever remember,” longtime Councilman Fred Visconti said. “Obviously, we’re looking at $102.6 million, but we’re also looking to get this done in a proper way and the safest way we can for the taxpayers.”
Dollars and sense
In another unusual twist, city officials cannot say how much the borrowing might ultimately cost certain residents.
Sewer rates increased 2.95 percent this year and Boughton expects that will continue for several more years to handle the project.
But those costs only apply to the almost 9,700 city sewer customers, even though any of the city’s almost 40,000 registered voters will have a say on the borrowing.
At least 20 percent of the project will be covered by state funds, while portions of the upgrades be eligible for more. Another 20 percent of the project will be paid for by Bethel, Brookfield, Newtown and Ridgefield customers also served by the plant.
That leaves city officials adamant that voters should approve the measure, but unable to clearly predict how much it might effect some voters, like they have been able to estimate on previous referendums.
“I’d be guessing at what the target would be for an increase, because there’s just so many factors that impact it,” Iadarola said. “It’s very difficult to even put together some numbers out there. To even give you a baseline of worst-case scenario would be impossible to do at this point.”