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Sewer upgrade costs go way up

Updated: 07/28/2013 11:32 AM
Created: 07/28/2013 11:11 AM WHEC.com
By: Tammy Whitacre/Messenger Post

The village of Newark will have to pay an additional $5.5 million to make necessary improvements to the wastewater treatment plant, and for property owners that will mean another increase in sewer rates — eventually.

Higher-than-expected bids for the construction phase of the estimated $17.6 million capital improvement project for the wastewater treatment plant, approved by the board in November 2010, stunned Village Board members at their last meeting July 16. Another $5.5 million will be needed to complete the project as planned, bringing the total to $23 million.

“I can’t explain it,” Mayor Peter Blandino said. “We didn’t do anything wrong. If you want to blame someone, I guess you blame the DEC.”

In 2010, the board approved bonding — a form of borrowing — the project’s entire cost of $17.6 million, to be paid back over the next 30 years. At a special meeting this past Monday night, the board approved a resolution to bond another $5.5 million to complete the project as it was originally designed, which also enables the village to meet new regulations handed down by the state Department of Environmental Conservation.

“This is not good news,” Trustee Kurt Werts said. “All of a sudden we’re talking about a 25 percent increase. That’s a lot. I want to know why.”

Monday night, the board met with Bill Davis from MRB, the village’s engineers, to get some answers. Davis said in planning the project they provided some room for inflation in the numbers, but “obviously it wasn’t enough.” The high bids are directly related to new requirements for the plant from the DEC and the revamping of certain project components to meet the new requirements, Davis explained.

In March 2011, MRB sent a letter to the village officials advising them that their permit for the project was under review by the DEC with a promise that there would be changes in requirements. Davis said he expected the bids to come in a little over budget, but even he was surprised by the extent of the overage. However, there is nothing of consequence in the entire project that could be scaled back to reduce the cost of the project as a whole, Davis said. Instead, Davis recommended the village proceed with the project as planned and bond the additional $5.5 million.

“If you start to pare this back down to $17.6 million,” he said, “we’ll be right back here again in another five years.”

With more DEC regulation changes looming down the road, MRB has worked to address future issues in the project’s design as well, Davis noted. In so doing, the village will be better prepared to meet new requirements. For example, in five to seven years, Davis said disinfection at the plant will become a new requirement by the DEC. The project now includes the structure and design to simply add UV disinfection equipment when the time comes, without needing to revamp the existing system at additional cost.

 Davis said Newark isn’t alone in its present circumstance. Communities across the state are being hit by costly new regulations.

“It feels like we’re being punished for doing something good,” Blandino said.

The increased bonding will require larger bond payments, Village Clerk Steve Murawski said. To meet those payments, the village will have to raise sewer rates, but Murawski doesn’t anticipate any increases in rates until 2022, he said. Once the village receives confirmation on the additional bonding, they will know better how it could affect rates.

But in the ensuing years, a lot could change. Davis said more and more communities are running wastewater treatment facilities like a business. Blandino said they haven’t begun yet to explore the revenue possibilities the new facility could generate, including contracts with other municipalities. Planned composting efforts at the new plant may also generate income for the village, and these revenue streams have the potential to ultimately offset any future rate changes.



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