$500 K of Bethlehem money goes down the drain every year
A developing discussion on the future of the Town of Bethlehem’s water supply is also shedding light on the present and, in a year officials are looking at cutting services, exposing the fact hundreds of thousands of taxpayer dollars are going down the drain every year.
The culprit is the town’s contract to buy water from the City of Albany. Signed in 2004 and running through 2023, it obligates the town to receive or pay for an ever-increasing amount of water from the Albany Water Board at a rate that has soared above what it costs the town to produce its own water.
The reality is since we’ve signed it, we haven’t really needed the water, Commissioner of Public Works Josh Cansler said. `We spend about $500,000 per year we don’t need to spend buying Albany water.`
This frank analysis has Town Board members ` who will probably have to approve new fees and cut services to balance a 2011 budget ` taking a hard line against the agreement.
`It is the worst structured contract I have ever seen in my life. Period,` Councilman Mark Hennessey said. `We have no control.`
`The 2004 water contract with Albany has turned out to be a Titanic mistake, helping to further sink our budget and forcing us to make decisions we otherwise might not need to make right now, all for water our DPW commissioner said we do not need,` Councilman Kyle Kotary said.
None of the members of the Town Board were in office when the contract was signed. It was brokered on the heels of a massive drought in 2002 that saddled residents with an entire summer of water use restrictions. This, along with other factors like the assumption the demand for water would continue to increase and an existing contract was near expiration, brought town officials to the bargaining table with the Albany Water Board.
`Back in 2004, there were several different things going on that were different than what’s going on now in 2010,` said former Town Supervisor Terri Egan, who signed the contract shortly after assuming office. `At the time, we were in a position where the contract needed to be renegotiated, we needed water, the town was reluctant to utilize the Clapper Road plant, we had some constraints from New Salem.`
Today, the contract looks less advantageous. It requires the town to buy more water every five years and the rate rises at the same percentage as it does for the city’s residential customers. At the time, it was thought tying rates to residential prices would be a good move since the city would assumedly be less eager to raise them. The opposite has turned out to be true.
The result is Bethlehem will pay $1.3 million for Albany water this year, 118 percent more than it did in 2004, and could be paying around $4 million per year by the time the contract expires in 2023.
At a current price of $3.63 per 1,000 gallons, it’s the costliest water source for the town.
Having the agreement with Albany does grant Bethlehem a more diverse and larger portfolio of water supply options, though, which was a pivotal part of the decision to sign the new contract, said Egan.
`There were projections being made in regard to the growth of the town … that would have put a strain on the amount of water that was being produced at the time by our own system,` she said. `It looks like it was over projected at the time.`
An economic slowdown has resulted in stunted commercial growth and the residential water usage has also declined. Thus, even in high usage times there’s not much need for the Albany water.
But a key caveat in the agreement limits its utility as even an emergency water supply. The city water board can order the town to institute water conservancy measures `at least equal to` those within the city, which would presumably occur during periods of reduced water supply.
The town is required to be able to produce enough water to handle the highest monthly peak demand in the past 10 years, which stands at 8.7 million gallons per day. With a peak output of 3 MGD from the Vly Creek Reservoir and 1 MGD from the New Salem wellfield, the New Salem Water Treatment plant can’t handle the requirement.
Although Supervisor Sam Messina said he doesn’t want to second-guess past decisions, he admitted the contract was `probably not the best thing for the town.` He said there have been recent discussions with the Albany Water Board, but no conclusions have been reached yet.
`We are interested in moving forward in a contractual relationship, looking to reduce our costs and perhaps our water requirements in the future,` he said.
But others wondered if Bethlehem won’t end up eating the cost for years to come.
`It’s a contract I wish we could get out of` said Councilman Mark Jordan. `I think it’s one of those situations where it’s so good for them that I can’t imagine they’d want to change any part of it.`
The town will have to make a decision in coming weeks, though. Bethlehem’s finished water essentially comes from three sources: the New Salem Water Treatment Plant, the Clapper Road Water Treatment Plant and the City of Albany, and one of those will have to be modified or expanded to meet approaching federal quality standards and better adjust the town to present and future demand needs.
All alternatives have a price tag of $130 to $140 million over the next 13 years, according to the town, but opening up the Clapper Road plant would have the least immediate impact because fewer physical improvements would be needed (the plant was constructed in 1994, more than four decades after New Salem).
But town leaders want to see if concerns over the quality Clapper Road waster will rise again. A plan to deliver the water to residences was shelved because the water is taken from wells near the Hudson, and the plant now operates under capacity.
Hennessey said he hopes the community makes its thoughts on the issue known.
`This is a generational-type decision,` he said. `We have the opportunity to structure what we think the water supply should look like in the Town of Bethlehem.“
