How Webster's town debt reached $132 million, and who pays it back

Webster has authorized roughly $132 million in capital borrowing across eight active projects, has actually borrowed about $103 million of it so far, and this year saw the cost of paying that debt back climb about 18 percent. That increase was a major driver behind the town's 2026 tax-levy increase.

This is a look at what the town borrowed for, how municipal borrowing works, and which taxpayers and ratepayers repay each piece.

How much the town has borrowed

The town's 2026 Budget Presentation, dated October 16, 2025, lists eight active capital projects with a combined bond authorization of $132,050,000 as of August 31, 2025. Authorization is a ceiling, the amount the Town Board has given itself permission to borrow, not the amount actually spent. Of that ceiling, the town had borrowed $102,621,000 and had incurred $74,089,701 in net project costs, or about 56 percent of the total authorized.

The largest project by far is the Wastewater Treatment Plant Phase II upgrade, authorized at $81.5 million, of which $67 million has been borrowed. Next is the Highway Building at $28.25 million authorized and $24.5 million borrowed. The Tebor Road to Phillips Road sewer conveyance pipe is authorized at $7.1 million and nearly finished, with $6.9 million borrowed. The Vosburg Road pump station is authorized at $5.7 million but has barely begun, with $380,000 borrowed. Four Sandbar Park sub-projects account for a combined $9.5 million in authorization.

In August 2025 the town completed its most recent major financing, renewing a 2024 bond anticipation note and issuing a serial bond that together totaled $101,141,000 across five of those projects. The sale carried the town's Aa1 bond rating, the second-highest tier Moody's issues, and drew a $1,276,292 premium from bidders. The net interest rate was 2.6662 percent on the note and 4.4529 percent on the serial bond, which amortizes over nine years.

How municipal borrowing works

Towns rarely pay cash for large capital projects. Webster uses two debt instruments.

A bond anticipation note, or BAN, is short-term borrowing, typically for one year, issued while a project is under construction and sized to the cash the project needs at that stage rather than its full cost. The town renews the note each year, paying interest and re-borrowing the principal, until the project is substantially complete. At that point the note is converted into permanent long-term financing. The town renewed its 2024 note in August 2025 rather than converting it, because the Highway Building and treatment-plant projects are still under construction.

A serial bond is that permanent, long-term debt. It pays down principal in installments each year, called serial maturities, rather than in a single balloon payment at the end. Each year's debt-service line in the budget is one of those installments.

Most of the town's borrowing is general-obligation, tax-exempt debt backed by its full faith, credit, and property-taxing power, which is why the interest rate is low relative to what a private borrower would pay. One slice is different: the Tebor Road to Phillips Road pipeline was issued as a taxable bond, because federal rules disqualify tax exemption when a private company is the primary beneficiary of the financed asset.

Why the cost rose this year

Across all funds, the town's net debt service rose from $5,271,174 in 2025 to $6,230,728 in 2026, an increase of about 18 percent. The town's finance office described the figure as expected to stabilize as the treatment plant and Highway Building projects finish drawing down their borrowing.

Who pays it back

The debt does not fall on one group of taxpayers. It splits along the projects.

About 71 percent of the authorized borrowing is tied to the sewer system. The Wastewater Treatment Plant Phase II project alone, at $81.5 million, is 61.7 percent of the $132 million total, and it is repaid through the town's Sewer Fund rather than the general property tax. To service that debt, the town more than doubled its sewer capital charge, from $43.28 to $94.03 per unit between 2025 and 2026. That charge is paid by the parcels connected to the sewer capital-charge district. Growing commercial sewer revenue is the town's second sewer-side repayment source; commercial sewer charges and entrance fees rose to about $6.2 million in 2026 (per the 2026 Budget Message), largely because a new commercial user, the fairlife dairy facility, came fully online in January.

The Highway Building, the largest general-fund project at $28.25 million, is the piece repaid the conventional way, through the property tax levy. Its debt service appears in the 2026 budget as $325,000 in principal and $967,306 in interest. Because that project is nearing completion and its note will convert to a permanent bond, its cost is rising, which is the largest driver of the general-fund, tax-levy portion of the debt-service increase; the sewer fund's debt service grew by a larger dollar amount but is offset by sewer revenue and recycled bond premium.

The four Sandbar Park sub-projects, at much smaller dollar amounts, are repaid through the General Fund and a standing transfer from the Parkland Trust Fund earmarked for Sandbar Park debt.

The town also recycles the $1,276,292 premium it received on the August 2025 sale. Rather than spending it, the town books it as future revenue and transfers it back into the General and Sewer funds to offset interest cost while the note is outstanding.

What fairlife covers

The Tebor Road to Phillips Road conveyance pipe was built primarily to serve the fairlife facility, and fairlife reimburses 96 percent of that bond's annual debt service; the Sewer Fund covers the remaining 4 percent. The town budgeted $770,161 in reimbursement in 2025 and $825,041 in 2026.

Fairlife also pays a fixed entrance, or connection, fee of $21,900,000 under its agreement with the town, spread across ten years from 2025 through 2034 at a flat $2,190,000 a year. That is the only piece of fairlife's obligation with a hard contractual total.

The rest of what fairlife pays is usage-based and grew sharply as the facility ramped up. Its sewer rents for operations and maintenance rose from $179,100 in 2025 to $590,400 in 2026 as its billed capacity grew from 900 units to 3,600. Its sewer capital charge rose from $34,200 to $331,200 over the same period. The town also budgeted about $1,235,000 in 2026 for high-strength organic waste fees based on the facility's projected discharge. The entrance fee continues on its fixed schedule through 2034, and the usage-based charges and debt reimbursement continue for as long as the facility operates and the pipeline bond remains outstanding.

A recent pullback

At its July 2 meeting, the Town Board voted 3 to 2 to halt a separate renewable natural gas project, an add-on to the treatment plant estimated at about $9 million. Councilman John Cahill, Councilwoman Jennifer Wright, and Councilman Garrett Wagner voted to cease payments; Supervisor Alex Scialdone and Councilman Nick Hunter voted no. The project depended in part on a federal tax credit whose eligibility a hired consultant had been retained to assess but had not confirmed before the board acted. Members who voted to stop cited a pipeline-interconnection contract with RG&E that placed liability on the town, a revised RG&E estimate that raised projected annual operating costs from $15,000 to $100,000, and a potential loss of as much as $22 million over 20 years. That project was never bonded and is not part of the $132 million capital-debt total. The Ledger reported that vote in its July 3 recap.

Staying under the cap

For 2026 the town set a total tax levy of $22,855,143, an increase of 2.91 percent over 2025, and an equalized tax rate of $5.52 per $1,000 of assessed value, up about 2.4 percent. New York limits how much a municipality can raise its levy each year. Webster's 2026 levy came in $6,107 under that state cap.

The full 2026 budget, budget message, and budget presentation are posted on the town's website at websterny.gov.

AI tools were used in drafting and research.