 Welcome to Montpelier Civic Forum and this show tonight is one of a series where we're doing the issues and the candidates before the election on November 6th. The election that will bring us two bond issues and we're going to discuss one tonight. What we're going to discuss is the wastewater bond. It's a $16.75 million proposed bond issue and I have city manager Bill Fraser with me to talk about wastewater or sewer. Which one would you call it tonight? Well it's actually the artist formerly known as the sewer treatment plant and then it became known as the wastewater treatment plant and now we call it the water resource recovery facility but it's all the same thing. It's all the sanitary sewers and wastewater that go down into drains as opposed to the water that you drink or storm water. Now where is this located? This is down at Dog River Field. Next to where people pick up sand? Next to where people pick up sand and next to where people pay softball and soccer and bring their dogs to the river and those kinds of things so it's a big plant there. What's the history of that plant? You've been here 20 some odd years. Yeah it's older than that. The plant was initially built in 1962 and has had various modifications as time goes by but some of the original equipment is still there and it's really aging, having difficulty getting replacement parts for it, it's failing and so it's in bad need of an upgrade and we've been eyeing that for the last few years. In terms of wastewater and water, what is the difference between those two different divisions? Now are they linked together in a capital sense? Well when we're replacing water do we not replace sewer when we're doing sewer? Are those linked together? They're linked together from our operation standpoint in that the water and sewer crews are the ones that repair broken water lines or broken sewer lines and they deal with what we call either in the water case we call that a distribution system so the water comes from Berlin Pond, goes into the water treatment plant, comes down through pipes and is distributed to all of our homes and then it comes out of our tap so that's the water system. Then once it comes out of our tap or then it goes into the sanitary sewers and it becomes a collection system for collecting wastewater which at that point is stuff that you flush, the stuff that comes from your shower, comes from your sink, all that sort of thing. Comes from the streets as well. Well so the streets is storm water, some of that goes into the wastewater system but we're really trying to separate that out so that's something different. Those are storm sewers versus sanitary sewers. Now how are these linked together in a fiscal sense? Well it's all through the Department of Public Works but we do track them separately and your water rates pay for the water treatment and distribution system and your sewer rates pay for the sewer collection and treatment system and then the storm water is paid for partly out of general fund and partly out of our storm water benefit charge. So they're slightly tracked differently but the wastewater plant which is what we're talking about today, it takes all the sewer that's collected, the sanitary sewer and treats that through a very biological process where sludges, the solids are scraped off or separated out, it's treated through, they're actually bugs, they're organic bugs that eat the bad stuff and keep the nutrients and then it goes through clarifiers and ultimately through an ultraviolet treatment system and then is discharged to our river when it meets discharge standards and so it's clearly one of the most important things that we do. Clean water, clean river, this river goes down to Lake Champlain and so obviously even statewide all of these treatment plants are very important. So we, you know it's something we pay close attention to and we've had really good service from this plant for a long time but it is definitely tired and definitely in need of upgrade. Now our water plant is constantly in a push-me-pull-me with federal standards in terms of keeping our water plant contemporary and all. So our water, so again let's, I'm trying to say do the federal standards on wastewater affect our decision to upgrade this? Yes, so I want to be clear that we're separating water and wastewater. Our water plant is relatively new, it was built in 2000, that's the one up on Berlin Hill and that is pretty much state-of-the-art at least for the water source that it was designed for. It does have some, it's fine and it meets our needs and works really well. The wastewater plant, yes, there's federal standards. To some extent it's affected by, it's indirectly affected by the standards for Lake Champlain, the TMDL as it's called, total maximum daily load. We discharge phosphorus into the river so we have to keep our, we have permit limits that we have to keep within certain parameters. For the viewer there's not going to be a test on this afterwards. Yeah, I hope not, I don't know if I'd pass it. But we have standards, are those standards that are moving standards as? Not, well the state and feds certainly are seeking to make them stricter but they also have to deal with the plant design. One of the, we're going to get off topic on the bond here and hopefully we'll be effective. No, it's important for us to understand why we're paying for what we're paying for. Sure, well we're paying for clean water. This is a water pollution control facility. Back in the day, pre-62 or whatever, people's sewers just ran into rivers. And so in the 50s and 60s communities started building sewer systems and then they were just eventually this treatment technology came in so now the bad stuff can basically be stripped out of it and it meets a certain clean water standard. It's an issue in Vermont because, as we all know, the state's under federal order to clean up Lake Champlain. But a large portion of the contaminants that go into the lake are from what they call non-point sources, so farmers' fields, different places like that. And wastewater plants are actually a pretty small percentage, but it's one of the few things the state can actually control because there are outputs that they can put limits on and they can be, the technology exists to reach those limits, but really it's getting the 5% of the problem through these limits. So that's a separate topic for another day. When did we last work on the waste treatment plant in a fiscal zone? When did we last... So the last major upgrade we did was probably 10 years ago, I should have thought to check that, we added the ultraviolet technology, we used to actually have a huge chlorine tank to disinfect the last stage, and it was probably the most dangerous thing we had in the entire city. And so we've gotten rid of that and gone to UV, which is much better, more effective and also much less dangerous in terms of potential blow-up than chlorine gas. So that was the last big upgrade, we've had to, over time we've had to make incremental improvements to clarifiers and different digesters, there's a lot, I'm not that versed on the technical aspect of it, but this would be a major overhaul. This is really would be bringing it to state of art. Okay, in bringing it to state of art, could we have done this incrementally over time? Or is this... So the only alternative, we've spent the last three or four years studying this. What we could have done in lieu of is what's called an aging infrastructure project and that would be basically just take what we have and upgrade it. That would have cost us about nine million dollars right now and another three million dollars over the next ten years. So about 12 million dollars in a ten-year period. And that would have just basically allowed us to do what we do today. What we're proposing instead is what we call an organics to energy project. So even though it costs more, the net savings from the energy savings as well as new revenues that we'll be able to process additional waste, so things like from, say, creameries or distilleries, those kinds of things. I don't want to say industrial waste because that signifies, has about organic type waste. So think stuff that might come from Ben & Jerry's or Cabot Cheese and those kind of things and they will be able to be processed with a revenue strain and that energy that can be created will then be reused in the plant to save energy. Right now we use methane to reduce our energy costs. We'll be creating enough to fully heat the plant. Are we building more capacity into this plant as we renew it? As we have a new vision for the plant? We are, although the, we actually have, plant capacity has two different aspects to it. So in one aspect we have plenty of capacity now for new private development, that kind of thing. The other aspect is... Or distillery. Yeah, well, so those are different types of waste. That's, you know, there's household and regular... But still there's water coming in? It's water coming in, but there's strength of waste and the type of... So what we're doing is creating the ability to take these stronger wastes that aren't normal household wastes. They would come in differently. They would not just come through a pipe. These would still be trucked in and brought in. So much like we take septage now. So those come in separately. How would you explain what septage is? Sure, if you have a septic tank for your own personal septic system, you have it pumped and the haulers then have a tank full of residential septage and they have to get rid of it. And some of that used to be spread on fields and it could end up in the river or rivers and waters. That is becoming more and more restricted. So we actually make close to a million dollars a year in fees to collect septage and we have a special processing system. So this would expand that capacity as well as the fees for this other business of these organic waste. So when you net out the energy savings and you net out the revenues from the organic waste, it's actually going to cost us less on an annual basis than if we just did the straightforward night... Less in what sense, Bill? At the absolute minimum. So one of the aspects of this is the company that's doing this work is guaranteeing us a certain amount of savings and a certain amount of revenue. And obviously anything above that is to our good. At the guarantee level we would be saving $92,000 per year over the alternate project not from what we're paying now. I was just about to ask how does this compare to what we're paying now? So I want to be clear. And what does we're paying mean? Exactly. We'll get to all of that. But I think this is probably the most important point of this whole thing which is we're going to have a failing plant at some point if we don't upgrade it. And that will be catastrophic. So let me finish. So we either have to do with this $9 million project or the $16 million project. And I think we've spent almost two years now analyzing the options and I think the city council has really looked at it. We believe the $16 million project, $16.75 million project is better because number one it will cost us less annually than its alternative. Number two it provides much more energy saving so it's toward our net zero goal. And number three it's much more environmentally friendly because all of those waste that will now be getting processed through us are things that are being put on fields and going in even though they're not appeal you're necessarily wasting. In terms of the big picture for the state and the region it is a much more environmentally beneficial project. Now this is not a residential neighborhood we're talking about over by the plant. Can the streets support that kind of heavy traffic that would be coming in? It is now. We've been handling septage trucks for quite a while and I don't think anyone's really noticed it. You know it's right near the interstate exit. They come in and out or on route two. These are not these are truck routes. It doesn't need to go into downtown it doesn't need to go into residential area. They are 24-7 so these things can come in the middle of the night and often do. At least our current septage haulers the regulars have key cards you know that that they swipe and registers how much they're depositing and so they can come in at any time of the night. Obviously a one-off person has to make arrangements with us but and we anticipate that regular customers. So I'm understanding you correctly we have a bond payment that will be due every year. Correct. And that bond payment minus the 93,000 how does this relate to the bond? Now nine million we assume has to be spent. Correct. And I wish I had a white board behind me. Nine million has to be spent 16 million 0.75 million. So you're talking 7.75 million in borrowing in essence and what kind and that will require 770,000. So the difference and the difference is so and I want to be clear about the nine million because that also would require an additional three million in about 10 years. So over the next so 12 million right and that we're very clear that that needs to occur. The difference the delta between the borrowing the lower number and the 16.75 that's the difference made up in the revenues from the organics and the energy savings with the newer plan. Now that is some of that is guaranteed that which means that the 92,000 the savings of 92,000 is guaranteed the projections are actually will save about 200,000. So if those trucks do not appear in the volume that we hope they appear. Correct. We'll still see cost savings. That's correct. The company that we have a guarantee of a certain amount of revenue and a guarantee of a certain amount of energy savings and so those two combined would be 92,000 less than if we just did our normal aging infrastructure project. Now per year. This technology that we're dealing with is this new technology is it tested technology? It's very it's tested technology it's it's done this will be relatively this will probably be new in Vermont but it's clearly not new in the northeast. We've visited plants we visited a plant in Virginia that was built by this company and other companies do it this isn't a sole source type thing and it works well it's proven and there's a market for it. I mean I think you know you because correctly states are taking harder views at how these waste are taken care of you know companies have to deal with agricultural way and and creamery and all those kinds of things. This is an opportunity for them to have a more responsible and reliable means of disposing this so we're it's a service but it's also revenue to the city to offset the construction of it. Do we believe in the future there might be a market for the if there's such a need that another plant might emerge that would compete with our plant? We as well so I think the issue well if it did there would have to be a huge need because somebody else would have to invest 16 million dollars. We believe and what we're told from the folks we're dealing with and other consultants is that these tend to show up in regions that that there just isn't the market within certain I don't in our case maybe 50 or 100 miles so 50 or 100 miles is the state of Vermont. Well right so maybe something in Brattleboro could show up let's say but it's not likely just you know it would be a while before say something showed up in Chittin and a northern part of Chittin and Franklin maybe but you know the first one in and and we're not trying to say this like markets here but just the first one is gonna it is kind of a market share but we're not looking at it that way it's just we we have an opportunity we've got to upgrade our plant this is a smart way to do what that is environmentally friendly and financially friendly the other piece of it which we haven't quite talked yet is that there is an opportunity to spend another couple million dollars and then take it and actually create electricity from it and the city council is very interested in that and then we could you know sell that to the grid or those kind of or use it in the building whatever what we've chosen to do was to make sure this is up and running that we understand it can handle the operations of the plant before we take on electric generation again as the as a viewer is probably hearing this for the first time so am I what happens to the additional methane I think that we're generating so for now until we can find better uses during summer and those kind of things will be flared off through the proper flaring procedures not the most efficient use but in winter we believe it will heat the entire buildings we'll eliminate all of our heating costs and we can use some of it for internal we have things that need to be warmed certain things have been kept at certain temperatures all year round so some of it will be used for that but that's the issue so if we can find use for the excess methane in which we're looking at one other piece I failed to mention earlier which is that we are actively seeking other grant funding which would reduce that 16.75 and we'd still have to bond for it but you know we never want to promise that we're going to get something that we don't have in hand but we think between two and three million dollars is entirely likely or possible that we would receive so that's but you know now we have a waste we have a wastewater system that's working 24 7 4 right now it's being replaced what happens is there going to be an interim period yeah when no one can use their bathrooms well for about a summer how how will that be dealt with it's part of the construction so they do it in increments the plant will be functioning the entire time we won't notice the difference and obviously that is part of the cost because you can't just shut one down and build a new one you have to keep them operating at some point you do a switch over so that what will happen to the old plant well this will be the this is still going to be there I mean it will be it's it's basically replacing in place so the the general layout of the plant will be similar they just will be where there was an old digester there might be a new digester where there was an old tank there will be a new tank so they'll be replacing these things incrementally as and putting in new technology now we're working with another company on this on the second aspect of this will they have staff there or will our staff handle the entire project so once it's up and rolling this will be a city operated project this will be our plant just as it is now city staff will run it the the the company that we're dealing with esg energy systems group their design engineers and they arrange so they will they are they've done all the cost estimating maybe the design we've actually retained a local vermont company to review all their designs so we've second not second-guess them but we've proofed their work and they will put the project together obviously bid it out and help us through the construction phase so overseeing construction how long is that period estimated to be I don't exactly know I'm guessing a year but I don't that seems to be something in this will city staff existing city staff be sufficient yes yes yeah we don't think we'll we don't we we won't need any additional staff to do this it's you know it'll be because even though we're taking on the new technology I mean the new loads a lot of that more of it will be automated and so some of what we're doing now will become easier and less staff dependent so we're we think that we'll be well we're very confident actually that we'll be able to do what we're going to do with the same staff that we have has this technology been used in cold weather settings like we have yeah yeah yeah like I said throughout the northeast Pennsylvania so I'm in trying to think with the further New York state you know it's a it's cold weather isn't really I mean there's a lot of heat generated with these so you know they they're they're still organic systems I mean we have our I don't know if you've ever toured the the wastewater plant but they're not picked up sand next to it you know there are open pools that and and they have covers so in the winter we put the covers on them and you know there are designs for weather conditions how does this affect our our sewer bills well the project itself will depends on how we choose to structure it but we're looking at over the 10-year period someone's bill would probably go up on average about 35 dollars a year over the course of what's what's that as a percent roughly roughly between so I'm not I will give you an answer if I have I have some cheap shoes numbers here absolutely better to use those exactly exactly so it would be between sort of five and three and a half percent this is over the course of time and some of those depend on exactly how much revenue comes in how much other you know and whether we pick if we pick up the grant will that and that would reduce those yeah so we would see the five percent pretty much immediately in our bills yes yeah we probably would have have that in the up front because that's when our biggest payments will be and and also when we don't know exactly what the revenue stream will be wouldn't that's some of that is you know the projections that could go up to six percent if we only hit the guarantee level so ninety three thousand is going back into the boundary payment that the cost savings of this thing I've so the it's it's not quite as clean as that we have to pay the whole bond right but the net to the rate payers but then that's offset our whole budget is offset by revenues so let's say the the the bond payment let's say seven hundred thousand I'm making that up we're talking about a 20 year bond right right or 25 or 25 right so let's just say the bond payment was a million dollars right so we have to pay that million dollars every year but if we're getting five hundred thousand dollars in revenue for these enhancements and and from these outside right the organic sources as well as that much in savings from energy then the net to the rate payers only five hundred thousand whereas if we just did the ai we'd be paying six hundred thousand so in theory that's where the savings twenty five dollar twenty five dollar a twenty five year bond in theory could turn into a twenty three or twenty year bond if we're paying extra into this thing so yeah so I don't maybe I didn't explain it we're not paying extra what we're doing is the net savings the net that we're paying out of your sewer rates each year is less for this project than it is for the we still have to pay the whole bond amount right right but if there's a profit to be made in this where is the profit going to go it will then presumably be in lower rates okay if we were taking in more than we needed then we wouldn't need to raise the rates as much to make how long have the rates been for the last five ten years um they've been up and down although lately the last few years the city council has you know we've embarked on a process to try to deal with this aging infrastructure which included the plan includes our old sewer lines and water lines so basically they've adopted a policy of one percent above um above uh inflation and so I'd say the last couple years the rates have been around three percent you know it's hard to say but some of that included projections for this future plant upgrade so how does this affect our ability to replace our aging sewer system underneath the streets uh it doesn't really I mean we have to we have the so two things one the feeder to this thing right but if there's if there's a failed treatment system it doesn't really make any difference so that's you know that's kind of the key factor um so that's number one this is highest priority number two um we do have a long-term plan to do the street that them and that is built into these things so I mean those aren't necessarily bonded they are sometimes but not usually and as bonds expire right deal with it we curl them over that's right and and bond the way our bonds are typically structured is that the early payments are the biggest ones and they decline over time so you can build up that capacity to take on other debt to fix the other you know we try to keep it as steady as possible our overall borrowing because this has a dedicated revenue stream to it does it affect our city's general overall borrowing well of course because the city council has set a recommended target does this factor into that as well yeah this would fall within the target because the target is um is a um percentage of total revenues so this this will add to the total revenues the the 700,000 per year so when so even though when you figure this debt in um it still falls within the city policy we're very careful about that with this along with the parking garage taken together how does that affect the city's borrowing and and doesn't that push towards the upper end of yeah well it does but it's the same issue remember the parking garage is also bringing in a fair amount of revenue right that is so that increases the number that you're taking a percentage of so um they kind of offset each other if that was clear to you it was it was clear to me actually um and i can't say do you have any questions but if you do have questions i'm going to say this and i think your email is public absolutely in fact i'll add to that on october 29th monday october 29th at 6 30 at city hall we're having a public hearing on all the ballot items the parking garage item this wastewater plant item and there are two charger changes so that's the plastic bags and and the non residents right so uh anybody who's interested in having a more in-depth conversation about any of these please join us on the 29th at 6 30 in addition there's a lot of information about these projects on the city's website and uh double you phraser at montpelier-vt.org is my email please feel free to email me with any questions and we'll get any answers now of course i have to put the pitch in for orca orca will be at that meeting uh filming that meeting and there were a number of council discussions in the past on this very issue that you could find on on orcas website correct and basically uh it's your choice to make i think we've informed you a little bit if you have more questions certainly go down to council uh and you'll have them answered quite and i thank you so very much for watching this show i hope that you'll watch the show on the parking garage i also hope that you'll watch all the candidate shows but what's most important on showing is to show up on election day and make sure that your friends and neighbors vote it's not only a civic duty but your responsibility thank you so very much for watching this