PLYMOUTH, Mass. — Finance Director Lynne Barrett is finalizing a plan for paying off the $48 million debt the town incurred when its force sewer main collapsed two years ago this month.
It's a complex plan that depends on a variety of elements that are still in flux.
The state's Department of Environmental Protection, through its Clean Water Trust, has been reimbursing the town for the ongoing costs of the repair work and force main replacement at zero percent interest.
That free ride will end soon, however, likely in fiscal year 2019 (which begins July 1, 2018), when the town will have to begin long-term borrowing to pay off this debt.
Even then the state seems ready to help. The DEP looks likely to agree to let the town borrow the money in four installments, $12 million each, over four years.
The first four to six years will be the hardest, because the town will be paying off the debt it incurred when it built the municipal sewer system over 15 years ago and simultaneously paying for the force main repair and replacement.
The original debt will be paid off by 2024, leaving the town with another 20+ years of payments for the force main repair and replacement.
What will the effect on tax rates or sewer fees be? Barrett is not ready to make those predictions.
The town could tap into its reserve fund to minimize the effect on tax rates. By 2020 there might be as much as $10 million in that account.
But the town may not want to use that fund, if possible, because of its positive effect on the town's bond rating: the better the bond rating, the cheaper the cost of borrowing money.
There is also the possibility that the town's suit against Veolia North America for mismanaging the municipal sewer system might be settled in the next few years.
Any funds the town receives from that legal action would be used to reduce the amount of money the town needs to borrow.
Barrett promised to provide a detailed proposal — and an explanation that can be understood by the average taxpayer — in January.
