News

Peabody Finance Committee approves pond bond (again)

By Matthew K. Roy
Staff Writer
Published: May 16, 2008

PEABODY — The Spring Pond bond has new life.

The Finance Committee last night voted in favor of recommending that the full City Council endorse the city borrowing $960,000 to clean up Spring Pond.

Mayor Michael Bonfanti has asked the council to adopt a bond order in that amount. The request comes on the heels of his asking to borrow $950,000 for the job in March. That request earned the Finance Committee's support and a simple majority, 6-5, of the council, but fell short of receiving the eight votes it needed to take effect.

Councilors who opposed the bond preferred borrowing $550,000 and drawing upon the city's cash reserves to cover any difference in cost. But after the vote last month, Bonfanti chose to submit a near identical request. He upped the amount because he can't, according to council rules, submit a request that matches a motion that's already failed.

Bonfanti last night said again that borrowing the full amount is the most cost-effective option for the city.

"I'm normally very, very willing to make compromises," the mayor said.

But he explained to the committee, which consists of councilors, that the city would make more in interest by investing its reserves than it would pay in interest to borrow. It translates into a $180,000 savings, he said.

The larger amount is also more attractive to lenders. And Bonfanti said that the city risks hurting its bond rating if it depletes its reserves. A lowered bond rating would make it more expensive to borrow money to cover future expenses, such as a new firetruck and improvements to Higgins Middle School, he said.

The mayor's stance resonated. The committee voted a favorable recommendation 3-1, with Rico Mello dissenting. Two councilors who previously voted against adopting the bond, Anne Manning and Arthur Athas, changed course. It means the full council, with all members in attendance, will likely vote to adopt the bond at its meeting next Thursday.

The state leveled a $28,000 fine against the city in July 2006 for allowing drinking water treatment plant residuals, including particles of dirt, iron and aluminum, to leak into Spring Pond. The fine was reduced to $6,000 in October 2006, when the city signed a consent order and promised to clean it up.

The problem for the pond originated between 1997 and 2006, when litigation involving the South Essex Sewerage District, the state Department of Environmental Protection and the federal Environmental Protection Agency prevented the city from discharging plant residuals through the sewer system. Without sewer access, the city chose to continually overload two lagoons at the plant, which led to leakage into the pond.

Public Services Director Dick Carnevale told the council in March that the residuals did not pose a public health risk and that allowing them to accumulate was the least expensive way Peabody had to solve the problem.

The city has until Oct. 1 to finish the job or it faces a $1,000-a-day fine.

"It's the right thing to do," Councilor Ted Bettencourt, the committee chairman, said of adopting the bond. "The city of Peabody wants to be on the right side of the Department of Environmental Protection."