Vergennes sewer extension policy draws scrutiny

FERRISBURGH — Car dealer Tom Denecker recently abandoned a two-year effort to persuade Vergennes to extend a city sewer line a few hundred feet across Route 7 to his Ferrisburgh auto dealership.
It is the latest in a series of episodes in which city officials have weighed the impact of new Ferrisburgh hook-ons to the city sewer system vs. increased revenue the city could secure.
 Denecker had been talking since 2009 to officials in both Vergennes and Ferrisburgh about an agreement to extend Vergennes sewer to his sales branch — his service operation remains on the city’s North Main Street, and his newer sales building is on Route 7 in Ferrisburgh.
Denecker, a Chevrolet dealer, would like to consolidate on Route 7. But to do so, he needs more septic capacity than is available on his Ferrisburgh lot. The city sewer line runs to a shopping plaza — in Ferrisburgh served by city sewer — across Route 7 from his dealership.
But Denecker, who is pursuing a different path he prefers not to disclose at this point, said that distance now seems a lot longer.
“I was going to pursue this issue to completion,” he said in a Nov. 12 email. “However … at this time … I feel that my best option based on time, money, probability, potential negative feelings and personalities is to seek an alternative option.”
The central issue for Denecker is that Vergennes aldermen have insisted since 1994 that they will not agree to extend a line from the city’s municipal system into a neighboring town unless that town shares tax revenue with Vergennes.
They have stuck to that position even though businessmen like Denecker, and before him others who wanted to develop the parcel that now houses the Ferrisburgh Solar Farm, have offered to pay the city for sewer service.
“The fees are the least of the problem,” Denecker said. “It’s the consensus amongst all parties that has not occurred in 17 years.”
In 1994, Vergennes voters backed a proposal in which the city would extend sewer service to a pair of Ferrisburgh parcels, but only if Ferrisburgh would guarantee Vergennes fees equal to half the annual tax revenue created by new buildings or additions served by a city sewer line. Ferrisburgh residents said no, however, and neither town has voted on the issue since.
At their Aug. 29 meeting, aldermen discussed a letter from Denecker regarding sewer extension. Ultimately, according to minutes, they unanimously supported a motion “to reaffirm the City’s policy to extend sewer outside city limits only through an Intermunicipal Agreement that has been approved by the voters of the participating town.”
At the meeting aldermen said they believed they had no choice but to follow the 1994 will of city voters. City Manager Mel Hawley expressed the council’s sentiments at that meeting.
“We have our specifications. We want to deal with a municipality, and we want to be guaranteed our money,” Hawley said.
Ferrisburgh Town Clerk Chet Hawkins later said he understands that point of view.
“They want to get paid, understandably, and municipalities can force you to pay,” Hawkins said.
Ferrisburgh selectmen in January had referred Denecker back to the city in a letter board chairwoman Loretta Lawrence addressed to Denecker and also sent to Hawley and Vergennes Mayor Michael Daniels.
“At this point in time, the Ferrisburgh Select Board believes that you should pursue contacting the City of Vergennes, as an individual business, to continue talks about extending a sewer extension to your business,” Lawrence wrote.
Capacity of the Vergennes sewer system does not appear to be an issue, although heavy rains can pose problems that officials are taking steps to address. 
According to Hawley, the city’s plant can handle up to 700,000 gallons per day of septic waste and rainwater. The current daily average, he said, is 360,000 gallons, an amount that has dropped in recent years because of measures to reduce run-off entering the system. Hawley said that average could rise again close to 400,000 gallons once this unusually rainy year is figured in.
Daniels put the capacity issue in perspective. Even if the average use rose to 400,000 gallons a day, he said the remaining capacity is enough to handle as many more homes as there are already in the city, about 800.
“Some people have voiced concern about over-extending ourselves,” Daniels said. “But we have the capacity to take on more, and not interfere with the open lands in our city. We can still accommodate both.”
There are potential financial benefits to the city if it were to extend the sewer.
Denecker’s North Main Street facility in Vergennes is assessed at about $396,000, a figure that includes land value. That figure also, however, takes into account depreciation on a decades-old building.
If Denecker were to build a new building in Ferrisburgh with an assessed value of $400,000, it would generate $7,012 of taxes in the current year, according to Ferrisburgh’s Hawkins. 
A deal between Vergennes and Denecker could thus theoretically net the city about $3,500 in annual revenue, if Denecker agreed to a payment deal structured along the lines of the 1994 agreement. According to Hawley, Denecker’s 2011 bill for his Vergennes facility will be about $1,000.
Daniels said it might be time for the council to at least consider how to structure deals to enhance city finances.
“There is a possibility for additional revenue,” Daniels said. “All cities and towns are looking at their bottom lines and really need to look at what revenues we have … so we can keep our tax rates as low as possible.”
The council has also three times wavered from its 1994 policy. Before Specialty Filaments folded its tent in Vermont, its management in 1997 briefly considered consolidating its operations on land at the junctions of Routes 7 and 22A that now, in part, provides a home to the Agency of Transportation’s commuter lot. Aldermen, excited by possible jobs in the community, backed sewer extension to the site.
Later, Country Home Products also eyed the same site for a new plant, and again aldermen said yes. And in 2006, the council OK’d a deal to extend a line two miles north to serve a Ferrisburgh parcel that would have paid Vergennes $1 million up front plus ongoing fees.
Existing Ferrisburgh properties now being served by city sewer are also being charged at different rates.
In October, aldermen agreed to a rate change for a half-dozen Ferrisburgh homes that are hooked up to the city sewer: Their owners will be charged 140 percent of the rate that a Vergennes homeowner pays.
At the same time, the owners of the plaza across from Denecker’s lot are paying a rate that resembles the 1994 deal. Hawley said the owners were happy to agree to pay an annual amount equal to “50 percent of the real estate taxes above the 1993 level” for ongoing sewer service that would also allow them to expand the plaza.
He acknowledged that, unlike Denecker, the owners of the plaza could at least theoretically pass along the sewer costs to their tenants: Chamberlain Flooring, People’s United Bank, Aubuchon Hardware, Carquest, Subway and Shuen Lee Chinese Restaurant.
Daniels said he would like to see some discussion among aldermen to create a more consistent approach as well as one that might generate more revenue for the city.
“Whatever we end up doing, we’re going to end up on one sheet of music,” he said. “Everybody will be treated uniformly across the board.”
At the same time, Daniels said Vergennes must be careful to take steps to ensure it is paid and protected, not only in one deal with a businessman such as Denecker, but in setting a precedent for the future. 
“From a business point, you can look at it from both sides … If you’re going to be in business, you have to pay what is a reasonable rate,” he said. “We want to protect ourselves so if another developer comes up we have a good method to charge a fair and equitable fee for the services we provide.”
Any decision on sewer extension ultimately rests not with the council, but with residents, either by a measure put forth by aldermen or by petition. The Vergennes city charter requires voter approval for sewer extension.
Daniels would like residents and aldermen alike to consider the question.
“Different people have different mindsets and don’t always have or take the time to talk about what could be done differently … with time and the right people at the table, much could be accomplished,” Daniels said. “I’d like to see things as a win-win situation. Sometimes there has to be a little give and take.”
Denecker said, “I haven’t dismissed anything,” but he suspects his time for waiting for a sewer extension agreement has run out.
“Remember,” he wrote, “that this topic has been in discussion since 1994.”
Andy Kirkaldy may be reached at [email protected].

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