Bond Proposals Need Strong Municipal Support
(from Maine Townsman, October 2001)
by MMA State & Federal Relations Staff

Next month, the voters of Maine will be asked if they support six separate bond proposals totaling $146.7 million in borrowing. 

In light of the recently identified national economic downturn, reports of plant closings and layoffs across the nation and in Maine, and the general sense of uncertainty and anxiety associated with the September 11 terrorist attacks and the ensuing war on terrorism, public support for these bond issues is anything but guaranteed. 

The Maine Municipal Association's Executive Committee is asking all municipal officials to make an extra effort to promote the bond proposals on their merits to the citizens of your communities. What follows is a synopsis of all six bond proposals in the order they will appear on the ballot, including specific information about how the bond revenues will be used. 

It might be noted that this package of borrowing was initially the priority package recommended by MMA's Legislative Policy Committee this spring as the Legislature reviewed dozens of competing bond proposals and fashioned the limited package to go out to the voters. At is annual meeting in September, MMA's Executive Committee strongly endorsed the entire November ballot.

With the pressure on the property tax as high as it is, there is a critical need for non-property tax resources to support capital projects that would maintain Maine's road system, renovate public school facilities, increase the affordable housing stock, further invest in wastewater and water system infrastructure, remediate leaking landfills, and put a modest amount of capital, for the first time ever, into the Municipal Investment Trust Fund. The big bumps in the economy that Maine is experiencing certainly underscore the importance of shoring-up the state's University and Technical College facilities and its research and development programs. 

In short, municipal officials easily recognize the potential benefits to their communities, other municipalities throughout Maine, and the opportunities for Maine citizens in every element of the six-question package. 

MMA believes that some of these bond proposals could be at risk unless significant efforts are made to educate your voters about the importance of this type of state financial support. Please make an effort to promote these bond proposals in your communities before November 6th. 

Question 1: Affordable Housing
"Do you favor a $12,000,000 bond issue to provide: 
1. The sum of $10,000,000 to address the affordable housing crisis in Maine; and 
2. The sum of $2,000,000 to provide housing for victims of domestic violence?" 
This approval would authorize the state to issue bonds in an amount not to exceed $12 million to raise funds for the Maine State Housing Authority (MSHA) to address what the proponents call the affordable housing crisis, and to provide housing for victims of domestic violence. MSHA is authorized to expend up to $10 million to renovate or replace affordable rental apartments and homes, provide housing for the homeless and for consumers of mental health services, reduce the costs of acquiring land for the development of new affordable housing and pay down predevelopment costs to assist nonprofit housing organizations.

The need to renovate or replace affordable rental apartments and homes is considered a statewide issue, whereas reducing the costs of acquiring land for development of new affordable housing primarily addresses the shortage of affordable housing and real estate throughout southern Maine and along the coast.

The development of transitional and permanent housing for victims of domestic violence is a project of statewide concern, however it is the eastern and northern regions of Maine that immediately require more housing stock for this purpose. MSHA also intends to use these funds to provide housing and shelters for Maine's homeless population.

Nonprofit organizations such as the community action agencies will be able to use the grants or loans to assist in the development of affordable housing.

Question 2: Research and Development
"Do you favor a $5,000,000 bond issue for biomedical and marine research and development by Maine-based nonprofit and state research institutions?" 
This approval would authorize the state to issue bonds in an amount not to exceed $5 million to raise funds for equipment and infrastructure to conduct biomedical and marine research and development. Four million dollars would be placed in the Maine Biomedical Research Fund to support investments in equipment and capital infrastructure for biomedical research. This would include renovations or additions to laboratory space and related facilities. Funds would assist any Maine-based, private, non-profit, biomedical research institution or academic medical center that performs competitive biomedical research. These non-profits include:

o Jackson Labs: expansion of genetic research facility
o Mt. Desert Island Biological Labs: expanding to a year-round facility
o Foundation for Blood Research: renovating the Scarborough facility
o Maine Medical Research Institute: renovations/construction
o University of New England: building a research center

The final $1 million would be placed in the Maine Marine Research Fund and be used to finance investments in laboratory equipment and infrastructure. Maine-based non-profit institutes, academic institutes and quasi-governmental institutes are eligible to receive these funds. 

Question 3: Transportation
"Do you favor a $61,000,000 bond issue for improvements to highways and bridges, airports, public transit and ferry facilities; development of rail, trail and marine infrastructure; and improvements to intermodal facilities statewide that makes the State eligible for up to $120,800,000 in matching federal funds?" 
Due to the $44 million Highway Fund revenue shortfall in the FY 2002-2003 biennium, $37.4 million of highway and bridge maintenance programs that would normally be funded through the Highway Fund budget is proposed to be funded through this $61 million General Fund transportation bond. Not only will the bond raise revenue for the regular highway and maintenance operations, but it will also leverage over $120 million in matching federal funds enabling MDOT to undertake state projects in the FY2002-FY2003 Biennial Transportation Improvement Program (BTIP). 

Without the passage of the bond, the Department of Transportation will not have the funds necessary to complete the projects outlined in the BTIP that are designed to implement statewide improvements to Maine's necessarily extensive but aging transportation infrastructure. The bond will support a strong highway reconstruction budget that addresses nearly 200 miles of roadway, stimulates economic development in northern Maine, provides for improvements at more than 25 airports, assists municipalities in making capital improvements to minor collector highways and provides for improvements of harbor infrastructure in coastal communities. Passage of this bond is necessary to provide funding for rail, trail, public transit, ferry vessel and ferry system improvements.

Allocations of $37.4 million from the General Fund bond issue for highway and bridge improvements will include $12 million for principal arterial improvements, $19 million for major collector improvements, $3.4 million for the rural road initiative, and $3 million for snowmobile and fishing access.

Proceeds from the sale of the bonds will produce $6.1 million for freight-related improvements. Funds totaling $5.8 million will be used to further rail development. As an example, $800,000 of bond proceeds will be matched by $800,000 in private investments for development on the St. Lawrence & Atlantic Railroad to reduce congestion and enhance east-west rail connections from Portland to Montreal.

Passenger-related improvements will receive $13.5 million. Funds for the improvement of infrastructure of publicly owned airports statewide will total $3.25 million.

Proceeds totaling $2.35 million will also be used for ferry system improvements.

Funds will also assist in transit replacement programs for 17 urban and rural transit providers ($1.65 million), the construction of trails of statewide significance ($750,000), and intermodal facility development ($4 million).

Question 4: School Renovation
"Do you favor a $15,000,000 bond issue to capitalize the State's School Revolving Renovation Fund for repairs and improvements in public school facilities to address health, safety and compliance deficiencies, general renovation needs and learning space upgrades?" 
The four-year old School Revolving Renovation Fund has thus far provided loans and grants to Maine's public K-12 schools for priority-one health and safety school renovation projects. Earlier this year, the Legislature established that when $75 million has been appropriated, allocated and repaid to the Fund, the State Board of Education is authorized to award loans and grants for basic structural repairs and learning space needs. 

Up to now, $72 million has been appropriated to the School Renovation Fund. This bond issue would add an additional $15 million to the Fund, crossing the $75 million threshold and opening up a wider use of School Renovation grants and loans. Though the traditional uses of this fund include renovation projects such as indoor air quality, roof system integrity, asbestos removal, accessibility, and "systems" repairs, the expansion of the existing law will now provide renovation funds to contribute to general upgrades of learning space. Upgrades of this nature would include improving science laboratories, vocational spaces and increasing classroom flexibility.

Currently there are 500 applications from 350 schools for access to the renovation funds; a substantial majority of those are priority one applications. The approximate cost of renovation among those schools is over $130 million. Access to the funds is based on a rating of imminent danger and health and safety concerns.

Question 5: Environment
"Do you favor a $17,000,000 bond issue to provide:
1. The sum of $6,000,000 to construct and upgrade water pollution control facilities, providing the state match for $12,500,000 in federal funds; 
2. The sum of $1,000,000 to protect the State's drinking water resources by granting funds to cities and towns for the remediation of their solid waste landfills;
3. The sum of $1,500,000 to protect public health and safety and the environment by providing funds to remove and replace failing septic systems;
4. The sum of $1,000,000 to protect public health and safety and the environment by providing funds to remove overboard discharges;
5. The sum of $500,000 to protect the public health and safety and the environment by providing funds for the cleanup of tire stockpiles;
6. The sum of $3,000,000 to support drinking water system improvements that address public health threats, providing the state match for $15,760,000 in federal funds;
7. The sum of $300,000 for grants and loans to municipalities for public infrastructure through the Municipal Investment Trust Fund;
8. The sum of $2,000,000 to construct new or retrofit existing pollution control structures on Maine farms to protect the environment;
9. The sum of $700,000 to construct environmentally sound water sources that help avoid drought damage to crops; and 
10. The sum of $1,000,000 to recapitalize the Potato Marketing Improvement Fund?" 

The passage of this bond will raise the $17 million necessary to construct and upgrade water pollution control facilities, remediate municipal solid waste landfills, clean up tire stockpiles, make drinking water improvements and limit water pollution discharges from Maine farms.

The "Large Community Grant Program" would receive $3.5 million from this bond issue. $2.5 million of this allotment is earmarked for the Water Pollution Control Facilities grant program used to help construct a project in Corinna where existing conditions have had a detrimental effect on the environment. The Corinna project will provide remediation of the largest removable point source pollution to Sebasticook Lake. This project involves sewer rehabilitation and new land treatment systems to remove the discharge from the lake entirely. The proposed breakdown of contributions is as follows:

DEP Grant $2,500,000
Rural Development 2,000,000
CDBG 500,000
Federal Grant 967,000

The locations of other projects of substantial financial magnitude that will potentially receive funding with the passage of this bond include Waldoboro ($250,000) for the construction of a land treatment system, Vinalhaven ($500,000) for wastewater system design and construction purposes, and the remaining $250,000 will assist communities that are still considering options for major sewer projects, such as Old Town, Princeton, Jonesport and Milbridge.

Should this bond pass, the Municipal Investment Trust Fund (MITF) administered by the Department of Economic and Community Development would receive $300,000. This will be the first time the trust fund has received revenues since its creation in the early 1990's. Revenue from the MITF is given to municipalities for the development or improvement of municipal infrastructure. The passage of this bond will provide municipalities with financial assistance, on a competitive basis, for any type of growth-related or economic development infrastructure from the traditional water or sewer extension to the construction of streetscapes, downtown restoration, parking garages or gateways.

Also included in the bond package is a $1 million appropriation for the removal of overboard discharges most directly affecting clam flats and intertidal areas. Over 300 discharges in 77 towns have been removed and there are 1800 residential and commercial discharges remaining. These funds would continue the clean up progress. 

The "Small Community Grants Program" will receive $1.5 million to assist in the repair of failed septic systems. Municipal officials in Maine's smaller communities are well aware of how important this septic system construction program can be. To date, over 3000 local improvement projects have been completed. Unless this bond issue passes, the DEP will not consider any grant applications in 2002.

The bond also authorizes $1.0 million for the remediation of municipal landfills. Although the landfills have been closed, the state/local, 90/10 cost sharing continues for clean-up costs in the event of a leak or failures. These funds will be distributed as follows:

o $150,000 for additional investigation at Corinna.
o $300,000 to install a water line at Winter Harbor.
o $50,000 for an investigation at Lamoine.
o $25,000 for additional investigation at Fairfield.
o $250,000 for a water line at Wells (Indian Trail dump).
o $50,000 for additional investigations at Buxton.
o $175,000 for sampling arising from site inspections at various closed landfills where (as the DEP perceives it) the towns have failed to control residential development adjacent to those sites. 

The remaining $500,000 will be used for the continuous tire abatement activity at the Bowdoin site. This $500,000 will be matched with $570,000 from the Solid Waste Management Fund and will also provide for cleanup of some of the 300-plus smaller tire stockpiles located throughout the state. 

The Department of Human Services will receive $3 million for the improvement of public drinking water systems. This will be matched by $15,760,000 in federal funds. If this bond does not pass, however, the state will not receive the federal funds.

Question 6: University and Technical Colleges Capital Improvements
"Do you favor a $36,700,000 bond issue to make improvements to the State's public universities, the Maine Maritime Academy and other public learning centers?" 
This approval would authorize the State to issue bonds in an amount not to exceed $36.7 million to raise funds necessary for improvements to the state's public universities, technical colleges and learning centers, and the Maine Maritime Academy.

Proceeds from the sale of the bonds in the amount of $31.5 million would be used by the University of Maine System to pay a portion of the construction costs for the following projects: the creation of an arts center at the University of Maine ($4 million), an education classroom facility at the University of Maine at Farmington ($4.8 million), a health and physical education complex located at the University of Maine at Presque Isle ($5.6 million), the creation of a technology classroom and student center facility at the University of Maine at Augusta ($4 million), a health/tech center connector building and the renewal of a library/classroom at the University of Southern Maine ($8 million).

Bond proceeds would also provide Western Maine University Center with $1.8 million dollars to be used to cover the cost of renovating and equipping classroom space. The Calais Center would receive $1 million. 

The Maine Maritime Academy would be authorized to expend up to $4 million to pay a portion of the costs to construct and renovate dormitories, classrooms and laboratories. The Maine Technical College System would receive the final $1.2 million to renovate and equip classroom space at the Bath Higher Education Center ($1 million) and Katahdin Area K-Tech Center ($200,000).