Lisa Reitano, FinCom member's analysis of the Water Tank Replacement Issue

Very informative letter from Lisa Reitano, member of the Weston Finance Committee. It is a very important read for anyone considering voting at the Special Town Meeting on Wednesday March 12 and is among the most complete and direct explanation of the situation Weston finds itself regarding our water system, and our options for improving it.

Please Read it.
Alan Day

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I am a member of Weston’s Finance Committee, but I am not speaking for the committee as we have not discussed my article below, which began as a response to some questions that a resident sent to me. I will note that FinCom voted unanimously to support this project both prior to the December Town Meeting and again for the March 12 Town Meeting. I would like to address some financial issues concerning the water tank replacement project.

Why are We Doing This Project at All?

The main reason to do this project ASAP is that we are at risk for not having enough water to fight a fire if it occurs during a high use time. For example, this could occur during a drought where people are using a lot of water for both domestic purposes and their lawns so the tanks won’t have enough water to fight a fire. The entire town is subject to this fire risk. The plan to drive around town and tell heavy users to shut off their irrigation systems if water tank levels get too low is not a good risk management strategy.

This occurred in 2016, when tank levels were very low and we would not have had enough water to fight a fire if one broke out. We lucked out in 2016, we may not luck out next time. Our water tanks are also old and need to be replaced before we have structural problems.

Why the Rush to do This Project Now?

I agree that a project of this magnitude should not be rushed. I know that it feels like it is being rushed to some who have started to follow it more recently than those of us who have been involved for the past few years.

However, various alternatives have been considered, including different heights and sites, adding pumps and pumping stations and more tanks, etc. There have been forums on all aspects of the tanks, the FinCom has had presentations on the project at our meetings, and it has been discussed at many Select Board meetings over several years.

There were also numerous site walks with abutters. When one abutter hired his own engineer to come up with alternatives, those alternative sites were carefully reviewed and considered by the working group and our consultants and were the subject of Select Board meetings as well. I should also mention that Wright Pierce, our consultant, has built around 90 water tanks in various towns and they are engineers. I wish there was an answer to “heights and sites” that would make everyone happy, but it is not for lack of trying.

I have been asked if we should wait to vote on this project until Annual Town Meeting in May rather than have a March Town Meeting vote, and if we should consider constructing all three tanks at once or one at a time. Legally we have to hold a Town Meeting in March to vote on this, as enough citizens signed the petition to force one to be held, so we will be voting on it.

Financial Reasons to do all Three Tanks Now

The water tank project involves replacing our three water tanks in town at a cost of $43 million. This cost includes larger tanks to handle current water needs as well as those needs arising from population growth resulting from mandatory 40(B) and MBTA 3A projects.

• If we don’t vote to do the project, we will need to spend $4-$5 million for some repairs to the tanks because the state will demand that we do that as our tanks are old and deteriorating. That’s a waste of money if we are going to replace the tanks, but the state isn’t going to continue to let us slide if we don’t go ahead. Nor do these repairs solve our water storage problems.

• There are economies of scale with doing all three together. We would expect that someone who is bidding on the project would be able to do it for less than it would cost to do all three separately. We don’t want to end up with different firms doing different tanks. And we save time and resources by working with the state (MEPA) by doing conservation land swaps for all three tanks at once. In fact, MEPA strongly recommends that all three be done together.
  The three tanks function as a single system requiring that they are built to the same elevation. If we do them separately, we do not get the benefit of additional active storage until all three come online. If one or two are constructed first, they can still be used but not to their design elevation or they will overflow the third tank.

• We have debt reasons for wanting to do this sooner rather than later. We currently have some town debt that is wearing off, but we need to add more debt for three big projects: water tanks, fire station rehab/replacement, and a High School /Middle School rehab or replacement. Actually the water tank replacement project may prove to be the least expensive of the three.
  We need to space out these projects or we will be overwhelmed with a lot of debt at one time and could jeopardize our town’s AAA rating. So doing the water tanks soon, and doing all three together, will help us space out the debt as well as the debt service impact on our tax bills. The fire station project is not ready to go yet, and the HS/MS project is even further down the road, but all three may involve some debt at the same time. The more debt we have paid off towards the water tanks when we add the others, the better.

• We hope to get a low interest rate loan from the state (2.4%) which is available for water tank replacement projects. We may not get the loan, as there are limited funds available, but we have applied. Typically we have construction bids in hand when we vote on a project at Town Meeting but that is not necessarily the process here because there are time stipulations with applying for this loan. If we qualify for the loan, we are required to submit fully engineered plans suitable for construction bids prior to the approval of the funds. The process requires that we have fully appropriated the estimated costs of the project, as we pay the costs and the state reimburses us.
  Also a water tank contractor does not want to bid on a project that they don’t know is definitely going to happen (i.e. a project that we haven’t secured money for yet) as that limits their bonding capacity for taking on other projects.

Do we need to vote on both design and construction funds now, or is it okay to delay the vote for construction funds to next year?

• Again, we don’t want to pay $4-5 million to repair tanks that will soon be replaced. We have been asking the state to allow us to avoid repairing our tanks as we are planning to replace them, and so far they have agreed. We can make a better case to the state to avoid spending money on repairs if we have actually allocated funds for both design and construction.

• We may potentially get better bids from more water tank construction firms if we have fully committed to the project, i.e. voted the construction funds. There is a more limited group of companies that do water tank construction than do general construction, and they have a limited ability to take on projects.

• If we were able to get the low interest rate loan from the state for even a part of the project, we would need to have the construction funds approved prior to June 30 to qualify.

• Many town construction projects, like buildings, have lots of design options that require discussion and many choices to be made and perhaps revisited. Water tanks not so much. Once heights and sites are chosen, there is not a lot of variability in what needs to be decided. The Planning Board will still have an influence to address landscaping, lighting, fencing, etc. around the tanks.
  But this lack of options makes it much easier to estimate the full costs of the project, and as Wright Pierce does many of these projects, they have made a reasonable conservative estimate of the cost including contingencies. Funds are not borrowed until needed. If the project ends up costing less than expected, the extra funds are not borrowed, and any excess is returned to the town as “free cash.”

Further information on all aspects of this project is available at the town website,

https://www.westonma.gov/1828/Water-Tank-Replacement-Project

Lisa V. Reitano