ANALYSIS: Town Borrowing Twice, Spending Once

Cape Charles Wave

December 16, 2013

Cape Charles Town Council has voted to borrow $1 million for “new” projects including sewer repairs, freshwater wells, and a multi-use trail. But a Wave analysis reveals that the Town had already obtained money for these same projects, either from borrowing or from budgeting with tax money.

At a December 3 work session, Town Council reviewed “Capital Projects Priorities” (click to read) for spending $1.1 million. The priorities are:

FIRST PRIORITY: Repair 100 manholes to reduce rainwater inflow and infiltration: $100,000

An August 14, 2008, staff memo by Bob Panek (click to read) states: “The Town is correcting many problems associated with fresh water inflow and infiltration (I&I) into the wastewater system . . . So far, we have . . . fixed broken cleanout caps and installed nylon manhole inserts. Additionally, a contract has been awarded for raising the manhole covers.”

SECOND PRIORITY: Install a comminutor (grinder) for rags and other sewer debris: $50,000

THIRD PRIORITY: Upgrade sewer pump stations at Plum and Pine streets: $350,000

The 2008 Panek memo states: “Repairs and upgrades to the Mason Avenue, Pine Street, Plum Street, and Washington Avenue pump stations:” $550,000.

Town Council approved a resolution the same day authorizing (then) Assistant Town Manager Heather Arcos to sign documents for an EPA grant for “55% of project costs.” According to the resolution (click to read), “the Town has budgeted for the required 45% match.” A Project Narrative dated August 2008 states: “The proposed project will complete our efforts to eliminate the potential for wastewater overflows.”

The total projected cost of the projects was $1.2 million, with 55% funded by the EPA grant. In 2010 the Town borrowed the remaining $540,000 as part of a $2.6 million Recovery Zone Economic Development Bond. The bond application (click to read) states the following Town projects to be financed by the Town: [Read more…]

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