CENTREVILLE — Whether or not to liquidate Centreville’s permanent or investment fund to supply the money needed to finish the upgrade to the town’s 100-year-old water and sewer system remains a hotly contested topic. Town Council President Jim Beauchamp recently spoke to the Record Observer about why he thinks liquidating the fund for the $4 million is the best solution.
The permanent fund was from the sale of Centreville’s utility, and what better way to use it than to help complete this sewer project, Beauchamp sad.
If the residents of the town were to vote yes and decide to liquidate that fund, there is no effect on the town’s financial health and no impact on the general fund, which has about 13-15 months of cash available, he said. The enterprise fund, which runs the day-to-day water and sewer operations, has about a year’s worth of funds at present.
The permanent fund is restricted funds and can only be expended for specific use, Beauchamp said. With a value of $3.45 million, the fund currently has return rate of 1.79 percent, of which about $54,000 is transferred to the general fund annually, according to earlier reports.
Spending the permanent fund has no direct effect on the general fund or the enterprise fund, but if the town were to borrow against the permanent fund, an estimated $100 a year would be added to each resident’s water bill, Beauchamp said.
But is there any guarantee that the money in the permanent fund will cover the remainder of the project?
“We are getting regular estimate revisions (from the contractor) so that whether borrowed against or spending it that amount in the fund would likely cover it,” Beauchamp said.
Replacing the aging infrastructure is a once in a century project, and the thought of stopping it really doesn’t make sense, he said.
“The council is unanimous in the decision that we are going to finish the project, we have to,” Beauchamp said.
By upgrading the lines, the town’s water and sewer system is going to gain efficiency, he said. Presently ground water leaks into the system and the town is treating rain water and storm and river water, in addition to its water supply — with the new sealed system, this will no longer be an issue, he said.
“We can’t quantify the savings, but we will see savings (on routine operations),” he said.
Centreville residents continue to question how the town underestimated the cost of upgrading the water and sewer by $4 million dollars.
Beauchamp said he is furious the cost went over the projected figures. The council is now faced with three problems, he said: How did we underestimate so badly? Why did it take so long before the funding shortfall was presented to the council to see if they could address the cost or plan more timely to provide additional funding? And lastly, how is the extra expense going to be paid for?
Paying for it has to be solved first, said Beauchamp. Funding the project in a timely manner is necessary to stay on target for completion (and meet the state’s anticipated timeline for repaving).
“Then we need to know what happened and address those issues so we should never find ourselves again in this position,” he said.
Invoices for the ongoing work are billed monthly, said Beauchamp, and the team is now much more acutely aware of the finances surrounding the project.
Beauchamp said he wants the people of the town to vote how they believe is best for their town and to realize exercising their vote is important.
The language for the special election was not finished by press time. The special election will be held March 4 at the Queen Anne’s County Office Building at 110 Vincit St. in the Planning and Zoning meeting room from 7 a.m. to 7 p.m.