Council seeks up to $3 million bridge loan for East Side water tower after bond paperwork delay

The Financial Reporting and Fiscal Practices Task Force told residents the city needs a short-term bridge loan to cover the East Side water tower project because the formal application to the Vermont Municipal Bond Bank was not completed earlier. Laurie Grimm, introducing Article 2 on July 21, said voters previously approved about $4,985,000 for the project in spring 2021 and that the city used American Rescue Plan Act (ARPA) funds, grant funding and a construction line of credit to advance the work. Grimm said the city is now asking voters to authorize up to a $3,000,000 bond anticipation note — a bridge loan — to pay off the construction line and remaining water-tower expenses until the municipal bond bank accepts and awards the bond. Grimm said the city’s charter limits how long the municipality may carry a construction line of credit without converting it to long‑term financing, and the current construction line reaches its one‑year limit this fall. She said the bridge loan would be repaid from the previously authorized bond once the Vermont Municipal Bond Bank completes its award process, which staff estimates could occur as early as April 2026 but possibly later. Task force members said ARPA and grant dollars reduced the amount now requested; Grimm said the city will not ask for more than $3,000,000 and hopes to come in under that figure. Council members warned the article for the Aug. 12 ballot and said the bridge loan is intended specifically to protect the city from having to repay construction credit before the long‑term bond is in place. Task force members said they discovered the paperwork lapse only after revisiting the project during a broader review of grants and bond records; the council directed staff to pursue the bridge loan and to continue coordinating with the Vermont Municipal Bond Bank.