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), fixing the Town’s roads could cost 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 the first warrant article is about. (The second allows the Select Board to spend the money.) Both the Select Board and the Budget Committee endorse the articles.
Here are Q&As to help explain them. If you have any more questions, feel free to email them to me; I’ll see if I can get some answers. - Jay
Why weren’t these articles voted on during Town Meeting?
A last-minute change demanded by the state Department of Revenue Administration—the agency that oversees town budgets—came too late for the Town to meet the deadline to post the articles for the required number of days before the March Town Meeting. Since then, the Budget Committee and Select Board have worked in the midst of the pandemic to meet the legal requirements.
The second of the two articles actually was approved by voters at the March Town Meeting, but a mistake was made when it was amended. So we’re required to vote on the corrected version.
What is the first article?
“To see if the town will vote (1) to raise and appropriate $1,187,000 for the purpose of restoring, repairing, and improving roads which suffered significant damages during the flash flood of July 2019, (2) to authorize the issuance of not more than $1,187,000 of bonds or notes in accordance with the provisions of the Municipal Finance Act (RSA 33) and to authorize town officials to issue and negotiate such bonds or notes and to determine the rate of interest thereon, and (3) to authorize town officials to apply for, accept and expend FEMA grant monies of up to $890,250 in partial reimbursement of the Town’s aforesaid road restoration, repair and improvement expenses.”
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. Two thirds of a vote are required to approve it.
How does the Town get the money for repairs in the meantime?
On June 1, Orange would 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 would be $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: 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, the loan will be repaid over 7 years. (If the Select Board can find an even lower interest rate, they’ll try to lock that in.)
Will repaying this loan cause our taxes to go up?
Yes, recovering from this disaster will mean an increase in the tax rate during the loan’s seven-year repayment period. That rate will have to be approved 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 calculated final repair estimates from its headquarters.
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.
So what about the second article?
This is pretty much the article we approved in the March Town Meeting, allowing the Select Board to withdraw and spend money from the Road Improvement and Repair Capital Reserve Fund. A majority vote is required to approve this second article.
What’s the exact language of that second article?
“To see if the town will vote to appoint the Board of Selectmen under RSA 35:15,I as agents to withdraw and spend funds from the Road Improvement and Repair Capital Reserve Fund, only to carry out the purpose for which the fund was established. Said fund was established at the 2020 town meeting for the purpose of improving roads and making repairs to damages caused by catastrophic weather events.”
What’s the difference between this article and the one we voted on in Town Meeting?
The amended article in Town Meeting neglected to include language authorizing withdrawing and spending the funds. So this corrected article includes the language “as agents to withdraw and spend funds…”
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.
