GREENBELT – It’s been 16 years since the city of Greenbelt asked voters for their approval of a bond measure, but the escalating cost of repairs to the Greenbelt Lake dam have convinced the council to do just that. At Monday’s meeting, the council voted unanimously to authorize the city to borrow up to $2.5 […]
GREENBELT – It’s been 16 years since the city of Greenbelt asked voters for their approval of a bond measure, but the escalating cost of repairs to the Greenbelt Lake dam have convinced the council to do just that.
At Monday’s meeting, the council voted unanimously to authorize the city to borrow up to $2.5 million through either a loan from the Maryland Water Quality Financing Administration or issuing its own general obligation bonds. The council also unanimously approved a companion measure to put the question to voters in a binding referendum during the municipal election on Nov. 7, as required by law.
The dam is 81 years old and has not had any major repair work done in that time. Maryland has classified the dam as a “high hazard” and issued a consent order to the city in 2010 requiring its repair. The project was planned for four phases to allow the city to space out costs, but the price tag has risen significantly since 2010. The first phase alone rose from $110,000 to $320,000, with the total cost climbing to $1.9 million. The $2.5 million loan amount would give the city a 25 percent contingency fund for unexpected costs.
“We would actually only borrow what we needed as we move forward, but this would give us the authorization up to that amount,” Mayor Emmett Jordan said.
The Water Quality Financing Administration is a revolving loan fund specifically designed to help municipalities across the state afford large capital projects like this, according to city staff.
“I consider this offer from the state a lifeline. Two percent – we couldn’t get a loan for more than double that,” said City Treasurer Jeff Williams, referencing the loan’s interest rate. “Given that our investments are now earning almost one percent, this is almost a no-cost loan. So this is a very good deal for the city.”
The city’s debt payment would be $151,000 a year for 20 years, which is well within Greenbelt’s debt capacity. The loan would also allow the city to complete all three phases of the repairs simultaneously.
The council was united in agreement with city staff that the loan is the best way to finance the project.
“This is kind of a lifesaver for us. The dam has to be fixed, there’s no question about it,” said Councilman Edward Putens. “Otherwise, we’re in deep trouble with the state. They have been known to take certain measures and empty and drain it- drained the lakes in certain jurisdictions here.”
Voters still have the final say and can choose not to authorize the city to take the loan. However, Assistant City Manager David Moran warned of the consequences of such a decision.
“Other options (exist), none of them recommended and in my professional opinion, none of them good. For this fiscal year, the one we’re in now, the city’s entire capital projects program is $1.97 million. That’s everything,” he said. “Nothing else would get done. The city’s got a fund balance, but our fund balance is currently right at the 10 percent recommended level… you’d have to take two-thirds of that or more.”
The city could also raise taxes significantly to cover the costs of dam repair in the event the referendum fails.
In 2001, Greenbelt voters did authorize the city to borrow money to complete improvements to parks and build a new public works building. City staff will be preparing an informational brochure for city residents to inform them about the ballot question, the facts of the dam repair and consequences of not taking the loan.
Mayor Pro Tem Judith Davis said residents have been aware of this issue for quite some time and thinks they will give their approval.
“This is not like a big surprise that we have this repair to do. It is required and we are mandated to do it,” she said. “I think that, with the information that they get, I’m hoping that this will pass.”