Despite the economy villages borrow to upgrade services
VALATIE — In the midst of hard economic times and shrinking government assistance, the villages of Valatie and Chatham are investing millions of dollars in their sewer systems to bring those systems into compliance with state regulations.
Officials in these communities see growth as a way to support local infrastructure. But like many other small municipalities, both the villages need to address capacity issues as new homes and businesses seek to connect to these essential services.
In Chatham the water and sewer bills will go up about $15 a quarter to cover the payments on a $2.3 million loan for sewage treatment plant upgrades. To finance these necessary improvements, the village is signing a loan agreement with the state Environmental Facilities Corporation, EFC, at a 2% interest rate over 30 years. “That’s doable,” said Mayor Tom Curran in a recent interview with The Columbia Paper.
That may sound odd to residents who have heard that the village is facing a deficit this year of $70,000 in the general fund. But water and sewer services in municipalities are paid for from budgets separate from the general fund and are intended to be self-supporting through usage fees.
By coincidence, Valatie is also anticipates spending $2.3 million upgrade its sewer plant and plans to take out a $3-million interest-free loan, also from EFC. That debt will not change sewer bills for users, according to village Mayor Gary Strevell. Valatie taxpayers already pay a maintenance fee of $18.12 a quarter added to every bill for upkeep of the plant.
Both municipalities want to make it easier for new users to connect to the systems, which officials say will generate more revenue in the form of use fees.
Valatie Mayor Strevell said that users should see an increase in the efficiency of the 35-year-old system with the new “channel grinder” and other tools designed to process waste more effectively. Chatham is looking at increasing efficiency and lowering energy costs, though one key component of its plan is to add a tank to handle the overflow of rainwater runoff that sometimes swamps the capacity the village sewage treatment plant.
The difference in the interest Chatham residents will pay and the interest-free Valatie loan available to Valatie is in part a reflection of a disparity in the calculation of the relative wealth of the two villages. Working with Delaware Engineering, a private firm that helps local municipalities with water and sewer issues, Valatie conducted an income survey last winter that allowed that village to qualify for no-interest hardship loans from the state, meanwhile the village and its consultants continue to look for grants as the project starts in the coming months. “I’m happy with the results” Mayor Strevell said of the survey that showed the median household income in Valatie was $39,000.
Chatham Village Clerk Carol Simmons said village officials there also met with Delaware Engineering, but the consulting firm determined that Chatham wouldn’t qualify for hardship loans unless the board increased the water and sewer rates.
That conclusion may surprise some observers familiar with the two communities. The detailed 2010 Census figures for villages are not yet available, but the 2009 estimates by the Census Bureau show that Valatie and Chatham have a nearly identical number of residents, just under 2,000. The same government estimates list Valatie’s median household income as $58,977, almost $20,000 higher than the figure in the Delaware Engineering study. By contrast, the Census shows that Chatham’s median household income is $46,902, not only far lower than Valatie but much lower than the national average of $51,400.
Right now Chatham residents pay 4 cents per cubic foot of sewage, with a $20 minimum rate for the first 1,000 cubic feet. The amount of sewage is estimated based on the amount of water a homeowner or business uses.
In Valatie, village Clerk Donna Schneider said the rate is $7.05 per 1,000 cubic feet, but the rates are adjusted quarterly depending on water usage.
Regardless of the rate, the question arises as to why municipal governments would undertake all this work now, when the economy is so bad, the tax base is stressed, taxpayers are restive and the no one yet knows how the new state property tax cap will affect municipal finances. The answer in Chatham stems from pressure being applied by the state Department of Environmental Conservation for the village to comply with state regulations. Ms. Simmons says the village is under a consent order from the state to address its sewer problems.
“Rather than pay the fines we’re going to upgrade the system,” said Mayor Curran. Plans for the Chatham upgrade have been sent to DEC for approval, and Mr. Curran said village officials expect to sign the paperwork for the loans and break ground this September.
The Valatie Village Board has approved issuing bonds to cover the work and will put the first phase of the project out to bid soon.
These two villages, only six miles apart, are not unique in dealing with aging, outdated infrastructure. And upgrading the waste treatment plants is only the beginning of the work that needs to be done. Mayor Curran talked about having Chatham’s leaky water tower tested and the work it would take to fix the tower and the reservoir that supplies it.
Mayor Strevell said that last year his village had to spend $100,000 to install a wastewater chlorination system, which he described as an unfunded mandate from the state. He hopes that after the upgrades are made to the sewer system the business district of in the neighboring Village of Kinderhook can use it as well. Kinderhook village does not have a sewer system.
To contact reporter Emilia Teasdale email eteasdale@columbiapaper.com.