Lamoille County taxpayers will continue to foot the bill for the village of Hyde Park’s water and wastewater infrastructure upgrades — for now.
Vermont Superior Court Judge Robert Mello in a ruling released last week denied the preliminary injunction sought by the county in its lawsuit against the village for forcing county-owned buildings to pay much higher rates for water and wastewater use.
The injunction was sought by the county as amelioration for a tiered payment rate structure implemented after the village took on a $4.9 million bond debt to finance state-mandated upgrades to its water and wastewater infrastructure.
In this new rate structure, village residents pay as little as a $20.25 fixed service charge for water each month and the courthouse, Lamoille County Sheriff’s Department and Hyde Park Elementary School pay a charge of $1,417.50 per month.
This has caused the county’s annual budget to grow and left its other nine towns footing the bill, with Stowe paying for over half of the budget. Stowe is set to pay over $286,000 of the $531,000 fiscal year 2023 budget.
Assistant judges Joel Page and Madeline Motta in March brought a lawsuit against the village in protest of what they allege to be exorbitant utility charges.
The county requested the court implement a fixed service charge of $59.30 for all users of Hyde Park village water while the court considered its claim that the amount that the village was asking county taxpayers to pay for water was “unfair, inequitable and unreasonable.”
For the county to get a preliminary injunction, Mello would need to find that there was a threat of irreparable harm to the county, decide it was in the public interest and believe the suit was likely to succeed on its merits.
Mello did not find substantial justification for the county in any of these areas.
First, Mello was not persuaded by the county that the village of Hyde Park would be unable to refund the estimated $70,000 the county claims it has overpaid so far if the suit was to succeed. He also said the timeline for the suit’s consideration will be expedited and resolved by the end of the calendar year, so the county has no reason to be concerned about a drawn-out legal battle.
Mello was also concerned that setting a $59.30 fixed service charge for village residents would cause substantial burden.
“There are only 462 residents in Hyde Park, compared to the 25,318 residents who comprise the County of Lamoille, and many of the Village’s residents earn lower incomes, or live on a fixed income or on governmental assistance,” Mello wrote. “It is foreseeable that many Village residents would find it difficult, if not impossible to pay such higher rates for water and wastewater, both of which are essential services”
He also wrote of his concern that forcing the village to alter its rates could adversely affect its status with the Vermont Municipal Bond Bank and found that, overall, village ratepayers would face far more adverse effects if the injunction was granted than county taxpayers would if it wasn’t.
Mello also expressed doubt that the county’s lawsuit, based on the evidence presented in the preliminary hearing, was destined to succeed on its merits, noting that Vermont’s laws give broad authority to municipalities to set rates for water service.
In casting this doubt, he noted two arguments put forth in the case.
Mello cited testimony from Hyde Park village manager Carol Robertson that rates were much higher for county institutions because they stood to benefit the most from the infrastructure changes, which were primarily made to increase pressure availability at fire hydrants in front of those buildings.
But the county pointed out that there were many fire hydrants throughout the village, not just in front of county properties, and disputed that the fire hydrant upgrades were even the main purpose of the project.
Mello said that “based upon the record presently before the court, the court cannot conclude that the County has met its burden of establishing that it is likely to prevail on the merits in this case,” and while both sides made compelling arguments the “facts are not yet sufficiently clear to overcome the presumption that the Village’s rates are reasonable.”
In his order, he said both sides must agree on a schedule and be ready for trial by Sept. 30.