Hartford board addresses possible $1.3M shortfall in bond repayment

Valley News Staff Writer
Published: 2/1/2019 10:24:53 PM
Modified: 2/1/2019 10:25:03 PM

WHITE RIVER JUNCTION — Hartford officials are hopeful alternative resources won’t be necessary to help repay a potential $5.5 million tax increment financing project for infrastructure improvements downtown.

The Hartford Selectboard on Tuesday approved plans to submit a “substantial change review” to the Vermont Economic Progress Council and Vermont Agency of Commerce & Community Development, agencies that in 2011 approved $13 million in TIF funding for projects in White River Junction. The funding model allows TIF districts to repay bonds with the additional tax revenue generated by increased property values where the improvements are made.

Hartford’s district still has about $9.3 million remaining in its TIF finance plan, which must be utilized by March 2021. Voters at Town Meeting next month will decide if nearly $5.5 million of the remaining TIF money that can be tapped will be used for upgrading water and sewer lines, reconstructing roads and sidewalks and other improvements on parts of North Main Street, South Main Street and Gates Street.

But because of inflation and interest payments that will be due on the bond, Hartford officials project a shortfall of up to $1.3 million over the final seven years of the 20-year bond period, barring additional tax revenue from development that would offset it.

At a public hearing at Tuesday’s Selectboard meeting, Planning Director Lori Hirshfield expressed confidence that additional development revenue will come. If not, however, the town may need to either turn to resources such as user-fee supported enterprise funds or request an extension allowing Hartford a longer time period to use the property tax revenue for downtown improvements.

Hirshfield hopes that won’t be necessary.

“What we’re saying to the state is that we’re still within (approved TIF funding) parameters because we have not yet hit the $13 million, and we have sound plans in place to address minimal shortfalls in cost over time,” Hirshfield said at the meeting, according to a CATV video. “That shortfall is occurring at the very end of a 20-year bond period. … We still maintain viability and have a solid plan in place. That’s our argument to the state.”

The downtown infrastructure project’s $5.5 million estimate is about $2.5 million higher than a pre-engineering estimate Hartford officials submitted with the town’s original TIF-project proposals to the state nearly a decade ago, Hirshfield said.

“We came up with these estimates in 2009. We had a recession which delayed the implementation (of TIF funding),” Hirshfield said at the meeting. “When you really go and do the final engineering, you find things out you didn’t know before, when you see what’s under the ground.”

Added Town Manager Leo Pullar: “I think we’re in good shape. We have a plan. We just need to articulate that inflation happens.”

The substantial change letter, signed by both Pullar and Hirshfield, states that the downtown infrastructure improvements, are “critical to supporting the continued private sector development in the TIF district,” but acknowledges that other potential projects need further analysis.

In December, the Selectboard chose to table an estimated $811,700 TIF project to reconfigure and add green space to the Town Square municipal parking lot across from Hotel Coolidge.

Hirshfield’s letter to the state says “a review of and engineering analysis of remaining TIF projects for cost and need through March 31, 2021, is necessary before moving forward on the remaining TIF projects.”

A public hearing on the TIF article and other muncipal and school bond requests going before voters at Town Meeting in March will be held Tuesday at 6 p.m. at Town Hall.

Jared Pendak can be reached at jpendak@ vnews.com or 603-727-3216.

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