The City of Burlington Board of Finance and City Council last night each advanced Mayor Miro Weinberger’s proposals to bring forward two bonds for a Citywide vote this December. The first bond is a $20 million Net Zero Energy Revenue Bond for Burlington Electric Department (BED) to accelerate progress toward the City’s climate goals. The second bond is a $40 million General Obligation (GO) bond to fund capital investments in streets, sidewalks, bridges, civic assets, information technology and public safety infrastructure, and deferred maintenance at Memorial Auditorium.
Among the first of its kind nationwide, the Net Zero Energy Revenue Bond proposal was recommended by the Burlington Electric Commission by a 5-0 vote before receiving unanimous approval from the Board of Finance and City Council on September 13.
The $20 million Net Zero Energy Revenue Bond proceeds would support numerous investments, including:
· $12.3 million for grid upgrades for reliability and to accommodate new loads from EVs and heat pumps.
· $3.9 million for technology systems to better serve BED customers and to offer new dynamic rates to help more customers switch economically from fossil fuels.
· $2.2 million for maintenance of BED’s renewable generation plants and conversion of a gas turbine peaker plant to run on renewable biodiesel instead of oil.
· $1.5 million for new EV charging stations, a new electric bucket truck, and new demand management technologies.
In addition, the proposal includes dedicating $5.3 million from a different financing source, BED’s annual GO bonds, to help double customer strategic electrification incentive funding for fiscal years (FY) 2023-2025. These incentives help customers switch from fossil fuels to electric vehicles, cold-climate heat pumps, electric bikes, electric lawn equipment, and other clean electric technologies.
In the immediate future, the Net Zero Energy Revenue Bond would reduce upward rate pressure significantly for BED customers relative to a scenario where BED made the above-mentioned investments without the bond. Looking further into the future, new revenue from strategic electrification projects between FY23 and FY25 is projected to contribute 40 percent of BED’s obligation over the 20-year debt service life of the bonds as other BED debt is being retired. In addition, BED projects $684,000 in annual savings from maturity of existing BED revenue bond debt which will provide additional capacity toward Net Zero Energy Revenue Bond repayment.
The $40 million General Obligation bond, as approved this evening by the City Council 10-1, would advance critical infrastructure investments in bridges, IT infrastructure, project management, civic buildings, public safety infrastructure, Parks, Recreation, and Waterfront, and:
· $3.5 million in bond proceeds for local match commitments that will leverage an additional $60 million State and Federal Transportation Grant funds.
· $2.7 million for sidewalks and $1.4 million for streets that, combined with $7.8 million in Street Capital revenues, will drive $11.9 million in sidewalk and street investments over three years, maintaining the Administration’s five-year initiative to triple the City’s investment historically – with the expectation Burlington will receive additional funding through the new federal infrastructure bill.
· $2.5 million for intersections and bike infrastructure, advancing the BTV Bike/Walk plan.
· Up to $10 million to address long-deferred maintenance at Memorial Auditorium.
Special Election December 7
The $60 million in bonds will be voted on in this special election allowing the City capture historically low interest rates. The Mayor also said the pandemic has set the City’s infrastructure planning back by one year resulting in a lower rate of infrastructure investment for the FY21 construction season. Waiting until spring for a vote will impact negatively a second straight construction season. In the City’s FY22 Budget Survey Burlingtonians showed overwhelming support for infrastructure investment.
While the $20 million NetZero Energy Bond is largely cost-neutral and solely repayable through BED electric revenues, taxpayers would see moderate impacts over time driven by the $40 million GO bond. Homeowners with a median-priced home ($379,100) would see an increase beginning at less than $7 a month in 2023, and reaching $13 a month once fully drawn down in 2025. Moody’s Investors Service recently affirmed BED’s existing A3 rating on outstanding revenue bonds in August and an Aa3 rating for the City of Burlington in September.
Ballots will be mailed to all registered Burlington voters by October 23 for the December 7 special election.