WASHINGTON -- West Virginians narrowly approved a $300 million bond referendum Tuesday that will help fund sewage treatment projects for the 15% of the state's population without adequate facilities, state officials said yesterday.
The measure, the largest bond issue approved by the state's voters since 1973, squeaked by on a 50.8%-to-49.2% vote, officials said. The margin of victory was about 3,600 votes, as only 40% to 45% of registered voters cast ballots, they said.
The state plans to spread out the $300 million in bond authority over the next 12 years by issuing six competitive general obligation bond issues of $50 million each, said Michael J. Basile, associate general counsel in the governor's office.
The referendum "will take us into the 21st century," Basile said.
Most of the proceeds from the bond issues will be put into a revolving loan fund for sewage treatment projects, but some money will be used to provide grants to localities for similar projects, Basile said.
The federal revolving loan program, authorized under the Clean Water Act, requires states to match the federal contribution, which they can leverage by issuing tax-exempt bonds to pay for wastewater construction projects.
West Virginia's revolving loan program allows leveraging of federal funds, but the revenues from the $300 million of bond authority will also be used to provide grants to rural areas that can't afford to match the state or federal funds, Basile said.
The state grants will also be used to "buy down" utility rates in rural areas to make modernization and construction of the sewer projects affordable to those residents, Basile said.
"Even with loans at 0% interest, utility rates in rural areas are too expensive," he said.
Earlier this year, the state legislature enacted a law creating an oversight council made up of state water and sewer agency heads and private-sector officials. Basile, the acting secretary of the council, said the group will review proposed projects and find the most efficient way to finance them.
A portion of the bond revenues will be used for economic development projects like construction of industrial sites and highway access roads', Basile said.
The bond issues will be repaid by a dedicated portion of the state coal severance tax, Basile said. Income, property, sales, or any other business taxes will not be affected, he said.
Although approval of the measure is expected to hold up, Basile cautioned that there is the chance opponents will challenge the vote's outcome.
The referendum "was a real squeaker, and there's always a possibility of a challenge when there's a squeaker," Basile said.
