Among the 11 articles in the Town Warrant—to be voted on at Town Meeting on March 11—Article 6 is the most complicated. It has to do with paying for repairs of Town roads after the July flood.
While the state repaired Cardigan Mountain Road and replaced the bridge at no cost to the Town budget (it’s a state road, after all), the cost to fix the Town’s roads could be as much as $1,187,000. The federal government will cover 75% of that, and Mascoma Bank has offered a 2% interest rate on a loan for the rest. And that is what Article 6 is about. Both the Select Board and the Budget Committee “enthusiastically” endorse the article.
Here are Q&As to help explain it. You’ll see a version of this in your copy of the Town Report. If you have any more questions, feel free to email them to me; I’ll see if I can get some answers. - Jay
What’s the article?
“To see if the town will spend $1,187,000 on road repairs and receive $890,250 from the federal government if the town is willing, able, and authorized to accept such funds and to pay the balance (up to $296,750), which Mascoma Bank (through its community banking program) will loan to the town at 2 percent interest with a payback time of 7 years.”
What does the money pay for?
It pays for repairs and some improvements to Town roads damaged in the July 2019 flood.
What do the voters need to decide?
It’s one package: (a) to spend $1,187,000, three-quarters of which will be reimbursed by FEMA; and (b) to borrow the remaining amount over seven years at 2% interest.
How does the Town get the money for repairs in the meantime?
On June 1, Orange will open a bank account with a one-year revolving line of credit for $900,000. The cost to the Town for this line of credit is $2,000. As the money comes in from FEMA, the account gets replenished. This covers the 75% of repairs FEMA will eventually reimburse.
Is there a name for this revolving line of credit?
Yes, and you will hear it at Town Meeting: FRAN. It stands for FEMA Reimbursement Anticipation Note.
What about the rest of the money?
That’s where the Mascoma Bank loan comes in: up to $296,750 at 2% interest. This low rate is reserved for disaster-related repairs. If approved by voters on Town Meeting, the loan will be repaid over 7 years.
Will repaying this loan cause our taxes to go up?
Yes, recovering from this disaster will mean an increase in the tax rate next year. That rate will have to be approved as usual at the 2021 Town Meeting.
Who determined the repair amounts?
FEMA did the estimates, working with Road Agent Scott Sanborn. The agency sent its own inspectors and is calculating final repair costs from its headquarters. Orange officials do not expect to have final numbers before Town Meeting.
What if the costs exceed the estimates?
The estimates assume the maximum amount to be spent on repairs. Actually, the cost could end up being somewhat lower than the estimated $1,187,000—in which case, the Town’s share would be proportionally lower.
What if we decided at Town Meeting to spend less than the amount FEMA recommends?
While that option might result in lower taxes in the short term, not all roads would receive permanent repairs, leaving them vulnerable to future damage. The Town would then foot the entire bill for future repairs.
The July 2019 flood was a thousand-year event. Are we fixing the roads for a disaster that won’t occur for another thousand years?
According to the National Oceanic and Atmospheric Administration, such “rare” storms are becoming increasingly common. Houston, for example, had three “500-year” storms in three years (2014-2017). The FEMA money should enable some upgrades to culverts, preventing the sort of catastrophic failure that resulted in the near total loss of Tug Mountain Road.