Proposed gravel/water projects draw questions from Chester residents

By Shawn Cunningham
© 2015 Telegraph Publishing, LLC

More than 20 Chester residents crowded onto seven benches set out for a special Select Board meeting to discuss the proposed upgrade of the town’s water system on Thursday, April 9.

Town manager David Pisha gave a PowerPoint presentation laying out the plans but suggested that the audience not mix purchase of land as the site for a second water tank with the possibility of extracting gravel for the town from that same land.

A hand-out prepared by the town separated the issue in two sections – the Chester Water Project and the Chester Gravel Project.

‘Saving the town $1 million, land negotiated down from $500,000’

Pisha told the group that purchasing the 139-acre tract of land from Mike and Amy O’Neil for $399,000 would save the town about $1 million overall. In various meetings in the past, Pisha has quoted the savings as “$400,000” and “half a million,”  but project engineer Naomi Johnson of the Dufresne Group said the total savings to be realized by using the O’Neil site instead of a town site behind the school would be $1 million.

Town manager David Pisha, standing, explains the project as Select Board chair John DeBenedetti listens.

Questioned about paying $95,700 over the assessed value — which is $303,300 — Pisha said that the assessment was for bare ground while a road had been built on the land raising its value and that a box of documents including engineering surveys comes with the land. When asked by phone on Tuesday when the documents were created, Pisha said some are “Act 250 work” and some were the O’Neils “exploring on their own.” He could not say whether all were pre-2011, when — because of the devastation caused by Tropical Storm Irene that August, the O’Neils’ company and many others throughout the state were allowed to reopen closed pits to extract gravel for recovery efforts.

In addition to documents, Pisha told the crowd that a pile of gravel extracted from the property is still sitting there. Estimated at 10,000 to 15,000 cubic yards, Pisha asserted that this would more than offset the difference between the assessed value and the purchase price.

Citing a figure and a situation that had not been mentioned in any public meeting before, Pisha said that the O’Neils originally asked for  “in the high four hundreds” but that he had negotiated that price down to $399,000.  This was the first indication in all the meetings since December that there had ever been any price except that brought to the Select Board by Pisha in a closed meeting in November.

Eminent domain, land deals and land use

Frank Bidwell asked whether eminent domain (where a property is taken – with compensation to the owner – for a public use) was an option. Pisha said the neither he nor the board had considered that route. He added that he has since been told that it could wind up in court costing time and money. According to Johnson, federal rules – which Vermont has adopted – mandate that such loans can only be made when the property is being acquired from a “willing seller.”

Eric Law of Vermont’s Drinking Water State Revolving Loan Fund, speaking with The Telegraph on Tuesday, said that the property could be taken by eminent domain as long as the purchase funds did not come from the state fund. This could be done by a obtaining a separate bond for the land. The nominally higher interest rate of a bond from the Vermont Municipal Bond Bank would presumably be offset by the lower price of the land under eminent domain.

“The land purchase is going to have to be vetted more and more,” said Law. “You’ve got 100 and some acres when maybe 2 to 5 are required. We haven’t had to deal with that too often, but we are sensitive to Chester’s problem – only wanting a small amount of property when the seller says take it or leave it.”

Law added, “We don’t want to use public money for anything more than is needed, but if the alternative is much more expensive, it may prove out that it’s defensible.” He said he would have a decision on what portion of the land purchase the fund would pay for by the time the project goes to a public vote.

“The land purchase is going to have to be vetted more. You’ve got 100 and some acres when maybe 2 to 5 are required. We haven’t had to deal with that too often, but we are sensitive to Chester’s problem.”
Eric Law
Vermont Drinking Water
State Revolving Loan Fund

Sweetening the pot, Pisha also raised the idea that a hiking trail could be part of the town’s plan for the property during reclamation, linking to the trail behind the high school. “Arne and I were talking with Alison (Green Mountain School Board chair DesLauriers) at the schools, she said, ‘yeah, why don’t you come up and talk with us at a future meeting.’ ”

“Alison said she’d find time in one of her main meetings,” Pisha told The Telegraph on Tuesday. “She did say she’d put us on the agenda.” He added that they were waiting to hear back from her. “She did seem positive” about the project, Pisha said.

Later on Tuesday, DesLauriers confirmed that Pisha approached her at the Post Office with the trail idea. “I told him that it sounds interesting, but that I can’t speak for the board and that he should get on the agenda for the May meeting,” she said.

During the special meeting, Bill Dakin asked why the timing of this is so critical. Pisha and Johnson said that it had to do with $400,000 that is available to the project until June 1. After that date, the funds are no longer guaranteed and the project may lose its priority status. The town is also pursuing a survey of the water district to see what the true median household income. A lower income number than the Census data that the state is using would bring down the cost of borrowing. The survey will not be finished until after the vote.

Chester town manager David Pisha, standing, presents a PowerPoint presentation to about 20 members of the public on a proposed water-gravel project. All photos The Chester Telegraph.

A wild card in the deal is what will happen when the town applies for an Act 250 permit to extract gravel on the site. The O’Neil property was the subject of a protracted Act 250 battle over the establishment of a quarry that would have involved blasting bedrock and crushing it. That proposal was turned down by the district commission, a decision upheld by the Superior Court. Whether that will have an effect on the town’s proposal to dig gravel out of an area is unknown.

In March, April Hensel, Act 250 District 2 coordinator, told The Telegraph she had been asked to research the questions around this purchase. On Tuesday April 14,  Hensel reiterated that she had yet to complete her research and could not comment on a project, although she confirmed that she had spoken with Pisha. 

 Water Department selling gravel to the Highway Department

Remixing gravel with water, Pisha proposed to use the proceeds of selling gravel to the town on behalf of the Water Department to offset a portion of the bond payments. “Things get even better,” said Pisha showing how gravel sales would offset some of the increase in water rates that would result from the upgrades.

He also proposed to use the Cyprus Minerals Fund to fill in anywhere that the state would not lend money. This could include the difference between the asking price and the appraised price for the land and the expense of an Act 250 review.  Board member Heather Chase pointed out that the Cyprus Minerals fund is town money, not for the exclusive use of the water district.

Real estate transactions that are in excess of the town assessments shift the Common Level of Appraisal which has the effect of raising education tax rates, but Doug Lay, supervisor of property valuation and review for the Vermont Department of Taxes, told the Telegraph on Monday that sales involving governments are not included in the Common Level of Appraisal. “It will have absolutely no effect,” said Lay.

At its regularly scheduled meeting Wednesday, April 15 the Select Board will sign a warning for a town meeting on Monday, May 18 and a town-wide vote on the project on Tuesday, May 19.

— Cynthia Prairie contributed to this article.