City Council

CITY OF SARATOGA SPRINGS CITY COUNCIL WORKSHOP MEETING CITY COUNCIL ROOM THURSDAY, OCTOBER 16, 2003 1:00 P.M. PRESENT : Kenneth Klotz, Mayor Commissioner Thomas McTygue, DPW Commissioner Stephen E. Towne, Accounts ABSENT: Commissioner Thomas Curley, DPS Commissioner Michael Lenz, Finance ALSO PRESENT: Rich Straut, Barton & Loguidice Doug Ward, attorney representing the City STAFF PRESENT : Hank Kuczynski, Deputy Mayor (left at 1:20 p.m.) Commissioner Thomas McTygue said this was the second workshop on this matter. He said that his office had asked the County to meet with the City on October 3rd but they refused. He said this was a Saratoga Springs matter and he wanted this meeting held in the City. He said the County had some concern with the size of the meeting area, therefore, he offered the Music Hall but the County did not feel that was adequate. He said he has contacted them about this meeting today. Commissioner Thomas McTygue said he has major concerns with their proposal. He said that the City is the only municipality being requested to guarantee a certain amount of gallons purchased and we are being asked to pay two thirds of the construction amount for water lines that will run through several other municipalities. He noted that several of the Council members had questions on the County=s plans and those questions were forwarded to the County. He said the County did address the questions and Barton & Louguidice has reviewed their response; however, he noted the response was somewhat vague, therefore, more issues were raised. Commissioner Thomas McTygue said he had concerns with the high level of PCBs in the area of the river that the County is proposing to use. He said this is a serious issue and he believed that the Department of Health would be very concerned because Queensbury also draws water from just below the area where the County is proposing to draw from. He said there would be concerns about disturbing the area near the Queensbury intake. Commissioner Stephen Towne said he received a letter today from Ray Callanan, Chair of the County Water Committee, indicating that the DEC had confirmed that there have been no findings of PCBs in that area, therefore, there should not be any concerns. He said it appears from this letter that Ray Callanan has gone on record by making such a statement. Commissioner Thomas McTygue said Bill McTygue has done quite a bit of research on this matter and it was unfortunate that he had not seen this letter. He said the information on the PCBs is also listed in the EPA report and that report has been distributed. He said the PCBs are settled in the banks along the Hudson. Bill McTygue said DEC is aware of this PCB matter and the possible impacts that it would have on the Queensbury intake. He said this was an issue for the state to determine whether it wants to advocate for removal of this containment or whether it should not be disturbed. He said the County=s proposal would only heighten their concerns. Bill McTygue said in the 1997 EPA report there is reference to the PCBs at the Sherman Island Dam. He said it was indicated in that report that the site is contaminated. He said the location that is contaminated was at one time occupied by Niagara Mohawk. He explained that Niagara Mohawk cleaned their site, which was adjacent to the river, however the river banks were not remediated. He said the river banks were left to DEC to contemplate and that determination has yet to be made. He said there are Page 1 of 8 City of Saratoga Springs City Council Workshop Thursday, October 16, 2003 those individuals out there that want to believe the DPW has fabricated this information, but they have not. He said this information exists in the EPA report and is before DEC. Commissioner Stephen Towne said if this information is in the 1997 EPA report, he believed that both DEC and DOH would have a primary and decisive role in determining whether this long term water source is acceptable in meeting minimum standards. He said he was not questioning Bill McTygue=s review or Ray Callanan response, but asked if it might be possible for Rich Straut to discuss this issue with DEC to find out if there is an issue. Mayor Kenneth Klotz said that the City has spent three or four years on developing an elaborate DEIS for the Saratoga Lake option and now Rich Straut has spent time reviewing the County=s proposal. He said issues of this importance are not going to be solved here today. He said the County will also need to go through this elaborate process. Commissioner Thomas McTygue said it has been confirmed that the banks and basin of the Hudson, from where the County wants to draw water, is contaminated and it would be likely that the area should not be disturbed with construction. He said it would also be likely that Queensbury would be very concerned about disturbing those PCBs. He said that is why the County has not done a DEIS. He said the County got $1 million from Congressman Sweeney and he believed that the remaining funds of $900,000 should be given to SLIPD so they can do what is needed to Saratoga Lake rather than having the County waste the money. He said as long as he was Commissioner, he would take a strong stand against drawing water from the Hudson. He said the City should take the road that has already been cleared by the State of New York through their review process. He said the City should be in control of its own water source. He said the residents of the City do not want the County to control its water. He suggested that if the County was to come up with a plan that all municipalities would participate in and share the costs, then he could support it, but he wanted raw water and not treated water. He said the other municipalities should be dealing with their own filtration plants and the City should not be burdened with two thirds of the cost. He said the County has gone no where with their proposal. He said it was unfortunate that the County did not attend today=s meeting and that two commissioners and both supervisors were not here for this most important meeting. Commissioner Stephen Towne said it appears that there is agreement that the County should be asked to get something in writing from DEC that states the status of their review of the PCBs in that area and whether the County would be allowed to install pipes in this area. He said because eventually DEC would be asked to sign off on this proposal, they should be asked up front. He said this is a County matter that needs to be addressed by the County. Doug Ward said that generally the process that the County would follow would be similar to what the City had done in that they should do an environmental analysis that is then reviewed by DEC. He said they would likely propose construction in that area for the intake and then ask DEC to review that proposal. He said there could very well be no PCB in the water in that area, but the disturbance of the river bed and banks for construction of an intake could be an issue. He noted that DEC has said that everything is fine to draw water from Saratoga Lake for the City=s proposal. He said what is needed is an environmental analysis from the County showing the hazardous area and how they propose to remediate the situation. He said only then DEC would respond. Mayor Kenneth Klotz said it was the responsibility of the County to do this analysis and submit the material. Doug Ward agreed. Commissioner Stephen Towne said he wanted to communicate to the County that the City wants some environmental assurance that this is a safe area to draw water. He said if that means that they have to do an environmental analysis, then it becomes their call as to whether they want to take that step. Mayor Kenneth Klotz asked if there was agreement that the County proposal was not an option until they do an environmental study. Commissioner Stephen Towne said they need to do whatever it takes to assure the City that drawing from this area is environmentally safe. He said there needs to be some type of authoritative letter that states that the area is safe. Commissioner Thomas McTygue said the County originally asked the City to guarantee a purchase of 3mgpd. He said if the City was to purchase 3mgpd the Geyser Crest well fields would be eliminated. He said now the Page 2 of 8 City of Saratoga Springs City Council Workshop Thursday, October 16, 2003 County has raised that figure to 4 mgpd but apparently they are willing to negotiate. He said this is a significant point that should be addressed and the County needs to be told that the City is not interested in 3 for 4 mgpd and the City wants to maintain its filtration plant. He said the City draws from Loughberry Lake, Bog Meadow and the Geyser Crest well fields. He said only during the summer months would the City=s source need to be supplemented and probably only when it was a dry summer. He said it was likely that the City would not need more than 1 or 1 1/2 mgpd during the peak period. He said if this doesn=t work for the County then they should stop this process and the City should go out on its own. He said he wanted to be clear that the City does not need to purchase the volume that the County wants the City to purchase. Commissioner Stephen Towne agreed that 4 mgpd was an issue and he was not sure what brought the volume from 3 to 4 mgpd, however, he noted that the County has also stated that everything was up for discussion. He said that one of the most important issues for the County was how much the City was interested in purchasing. He said they propose a reserve capacity of 11 mgpd and they need to know what we are interested in. He said he believed they understood that 4 mgpd was not acceptable and probably 3 mgpd was not either. He said perhaps the amount of 5 mgpd should be split evenly between the City and Clifton Park. He said he agreed with Commissioner Thomas McTygue that the City should not purchase more than it needs. Commissioner Stephen Towne said it was his belief that the project was two fold: the first was the report that states that Loughberry Lake is a dying source and the City is in need of a supplemental source and the second objective was that the City has no backup. He said the City would be in an emergency situation if the existing water source was damaged. Commissioner Thomas McTygue said he did not want to leave a false impression that the City did not have a back up system because the City has more than one source for water. Commissioner Stephen Towne said there is a need to have a backup system and that his comments were directed more toward the decommissioning of the City=s filtration system. He said the decommissioning of the City=s filtration plant would go against the objective that drove this project in the first place. He said he wanted to be clear that he was not in favor of decommissioning the City=s water plants. Commissioner Thomas McTygue said that the City is much more fortunate than many other communities. He said that the City not only has Loughberry Lake but also has Bog Meadow and Geyser Crest. He said if there was a major contamination, those individual sources would go off line. Commissioner Stephen Towne said there are two objectives: water source and a backup up to the existing system. Commissioner Thomas McTygue reminded everyone that the County did a report in 1990 indicating that 30 mgpd could be drawn from Saratoga Lake. He said there is more than 260 mgpd that flow daily from Fish Creek to the Hudson. He said Saratoga Lake feeds the Hudson and all the City wants to do is to draw a couple mgpd to supplement the existing system. He said the City would do everything it could to keep the lake clean and reliable. He said there are individuals who say that the City will suck the lake dry but said that would not happen. He said that the City=s existing reservoir holds 250 million gallons which are less than what flows from the lake every day. He said the concern about selling water is not an issue. Mayor Kenneth Klotz said the issue was whether the County was willing to negotiate. He said it seemed cleared they were not interested in negotiating because they did not appear today. Bill McTygue said there is no disputing the fact that the water was contaminated in the Hudson from where the County wants to draw. He said the EPA reports clearly states that the sediments are contaminated. He said this is a known hot spot and the City needs to decide if it is interested. He said this information is available for all to view. He further noted that currently DEC has restrictions on fishing in this area further noting that the Hudson River in this area is under a health advisory. He said there is a restriction on bass near the Corinth Dam to South Glens Falls and there is a restriction on carp from Sherman Island to the Feeder Dam in South Glens Falls. He said this clearly indicates that there is a problem in this area and it comes down to perception. He said the City needs to determine whether it wants to spend large amounts of money on this source. Bill McTygue further noted that if any individual was to call DEC to ask whether this was a good location to draw water, DEC would respond that permits have already been issued for Queensbury for the area. He cautioned anyone in calling DEC in trying to get that information. Commissioner Stephen Towne agreed that a simple telephone call to DEC on this matter would not be enough. He said it was clear that something more substantial would be necessary. Page 3 of 8 City of Saratoga Springs City Council Workshop Thursday, October 16, 2003 Rich Straut then reviewed his responses to the County=s letter of August 21 which was in response to the City=s questions/concerns. Rich Straut said he first wanted to clarify some misinformation on the quality and testing of Saratoga Lake. He said the information included in the DEIS looked at both historical testing and also included additional testing of the lake. He noted that none of the testing of the lake showed any signs of PCBs. Rich Straut then reviewed his responses as follows: County plan is still in draft: Rich Straut said that because the County=s plan was still a draft proposal it was difficult to review. He said in the City=s DEIS the County plan was included and compared to the other alternatives. He said the City was being asked to review the current draft County Plan which only presents concepts on cost, development, draft agreements, etc. Introductory wholesale water rate: Rich Straut said his concern on the rates was what could potentially happen. He said the County is proposing a rate of $1.95 per thousand gallons based on the City=s purchasing 4 mgpd. He said that also assumes that the County will receive a series of grants totaling more than $10 million. He said those grants, to his knowledge, have not been committed or guaranteed, although the County was confident in getting them. He said the water rate was determined based on applying those grants as one shot revenues rather than paying off the debt. Therefore, the first five years of the proposal would have a subsidy of $2 million per year that would disappear after five years. He asked what would happen to the rates once that subsidy disappeared. Commissioner Stephen Towne said it was his understanding that some of that would be addressed by an increased customer base. Rich Straut said that was suggested, but he was concerned that the customer base might not expand in that fashion. Commissioner Thomas McTygue pointed out that the County recently raised the City=s sewer rates by 53 percent. Rich Straut said his concern was what would happen in the future. He said there is a guarantee for ten years and the first five years would be subsidized through grants. He said he wondered if there would be any additional subsidies available for the following five years. He said it would more than likely fall on the County taxpayers which ultimately means the City taxpayers. He said he was also concerned about forming a Countywide water district. He said it had been suggested that the water system budget could be met through the sale of water. He said there is some question about creating a water district in that a district would have the ability to tax but an authority would not. He said it was more than likely that the second five years of this ten year agreement would be subsidized by the tax payers which is over and above the proposed water rate. Commissioner Stephen Towne asked if the County provided a schedule of the anticipated expanded customer base over a period of years. Rich Straut said he did not recall seeing such information. He said that kind of backup information had not been included. Commissioner Stephen Towne said he was not aware of whether the County had discussions with municipalities on what they might want in ten years. Rich Straut said he did not see any backup information on this matter. Expansion of Project: Rich Straut said once the rate guarantees expires in ten years, there will be significant capital improvements that will be necessary above and beyond the $73 million initial investment. He said one of the first capital improvements that would be necessary is the expansion of the water plant at an estimated cost of $18 million. He said the second capital improvement would be the enlargement of the water main from 36 inches to 48 inches. He said in all of the previous plans, the water lines were 48 inches, however, the County made the determination to install 36 inch lines in order to save money on the initial construction. Rich Straut said once the City=s guaranteed rate expired in ten years, these improvements would be necessary. He Page 4 of 8 City of Saratoga Springs City Council Workshop Thursday, October 16, 2003 said those costs could total more than $50 million ($33 million for the water line and $18 million for the expansion of the water treatment plant). Commissioner Stephen Towne asked if there was any knowledge of when the Luther=s Forest Technology campus would come on line and was there probability that they would purchase water and how much. Commissioner Thomas McTygue said the Town of Malta supervisor had gone on record stating that the Luther =s Forest Technology campus would only be interested in raw water. Rich Straut said subsequent to this report the County said it would not count on sales to the tech park. Mayor Kenneth Klotz said the probability factor was zero. Commissioner Stephen Towne said initially there was some discussion that they would be interested in between 10 and 15 mgpd. He asked if these capital improvements would kick in at about the same time as the tech campus kicks in. Rich Straut said he did not see that information in the report. Full cost impact to the City and the City water rate payers: Rich Straut said there were a number of other issues in that he believed that some of the cost projections were low. He said for example the proposed site for the 5 mg water tank and that cost could vary significantly. He said they propose to spend $1.75 million on a 5 mg water tank, however, depending on the location and depending on whether a raised tank was necessary the cost could be more than $6 million. He said the tank must meet specific elevations and it was not clear in the County plan and from the topo maps whether the proposed location was as the correct elevation. He said there was also the concern of expanding the water plant. He said that ultimately the City will pay for whatever expansions are necessary. He said the project calls for construction of a 30 mgpd water plant while the initial plans call for a 60 mgpd plant. He said there will also be the cost of expanding the services to other municipalities, continual upgrades, and branching out. He said he did not anticipate a decline in the water rate and he did not believe that all of these factors had been included in the projections. Commissioner Stephen Towne said he would expect the size of the water treatment plant to depend on the number of projected users. He said they will need to enlarge the customer base for an enlarged water treatment plant. Commissioner Thomas McTygue asked why the City should be put in the position of guessing what the County=s intentions might be. He said it was not the City=s responsibility to anticipate what the County means. He said the County=s responses were somewhat vague. He said initially they hired a firm that projected the cost to be at $92 million and when they did like that number they hired another firm with a proposal at $70 million. He said the City will be required to pay two thirds of the cost. Rich Straut said that he was concerned on what the City might be opening itself up to with the County plan. He said again the City=s rate expires after then years and then it was up to the County to determine the rate and that would depend on the capital improvements, customer base, etc. He said he would anticipate that the rates would go up significantly due to the capital improvements and the loss of the subsidies. Rich Straut said the County plan is the only alternative included in the City=s DEIS that requires that the City purchase a minimum amount. He also pointed out that the County plan looked at different financing scenarios for financing this project. He said when comparing the City=s plan to the County=s plan he looked at the City and the County financing in the same fashion. He said he found that the cost to go with the County plan was significantly higher than the Saratoga Lake proposal. He also projected the user rates and those increases. He noted that if there is a PCB issue with the Hudson that would also increase the County=s cost. He said the City could purchase water from Queensbury for about the same amount as purchasing from the County. He said even with the subsidies in place, the Saratoga Lake option was much less expensive and there was still the concern with the County plan on what would happen after ten years. Commissioner Stephen Towne said that he was not advocating for the decommissioning of the City=s water treatment plant. Rich Straut said that was a good point. He said much of the County=s plans assumes that the City would decommission the City=s water treatment plant. Commissioner Stephen Towne said he wanted to be clear that he was not interested in decommissioning the City=s water treatment plant. Commissioner Stephen Towne said perhaps the most significant dollar amounts included in the letter from Rich Straut was the dollar amount difference between the plans. He said the difference to the customer was only $39 per year. He said it might be useful to have another column on what would the increase be in cost per household. Page 5 of 8 City of Saratoga Springs City Council Workshop Thursday, October 16, 2003 Commissioner Thomas McTygue said under the County=s proposal the City=s water treatment plant would be decommissioned because of the guaranteed amounts that must be purchased from the County. He said the City=s average demand is about 4 mgpd. Commissioner Stephen Towne said there seemed to be agreement by Council members that the City would not buy 4mgpd. Commissioner Thomas McTygue said at this point he was not sure what the guaranteed purchase amount was because the County frequently changes its numbers. He said he is not interested in 4 or even 3 mgpd. He said he might be interested in purchasing up to 2 mgpd of raw water. Commissioner Thomas McTygue asked what was wrong in going to the County and stating that the City wants raw water. Bill McTygue said in a letter dated July 9, 2003, Ray Callanan states that the City must guarantee to purchase 4 mgpd in order for the project to be viable. Commissioner Stephen Towne said there was an August 21 memo from the County stating they are willing to negotiate. Commissioner Thomas McTygue said that might be true however in the July 9 document there was an agreement not just a memo. Mayor Kenneth Klotz said if they were willing to negotiate, where were they today. Commissioner Stephen Towne said he was taking the County=s statements at face value in that they are interested in negotiating. Rich Straut said if the County is willing to negotiate and, if the City purchases less, the cost will likely go up. He also noted that there are costs in decommissioning the water treatment plant. He said that would increase the $1.95 to $2.01. Commissioner Stephen Towne again said he was not interested in decommissioning the City=s water treatment plant. Rich Straut said if the plant is not decommissioned that will add more cost to the price per thousand gallons. Commissioner Stephen Towne said the existence of a back up system was important. He said that another issue was the complete reliance on the County. He said he would like to use the County as a supplement. Rich Straut said that would make the County option one of the most expensive alternatives. Mayor Kenneth Klotz said that one of the original reasons for not going with the County alternative was the cost. He said we are now back to where we were two years ago. Commissioner Thomas McTygue said he was glad to hear that Commissioner Stephen Towne was not interested in decommissioning the water treatment plan or in buying 4 mgpd. He said though that based on the purchase of 4 mgpd the plant would need to be decommissioned. Rich Straut said that another factor was that decommissioning a plant is not simply a matter of turning off the system and walking away. He said a minimum level of operation would be required and that would also add to the cost for the rate payer and cut back on the minimum guaranteed amount. Commissioner Stephen Towne said he understood that the guaranteed rate could go up with a lesser amount purchased. Commissioner Thomas McTygue said the City will pay two thirds of the amount to be purchased by the County. He said the difference was the suspicious water from the Hudson or clean water from the lake. He said residents should not be lead to believe that this is a free lunch for the City. He said the residents will be required to pay two thirds of the cost. Commissioner Stephen Towne said that the suspicious water and the sewer rates are items that keep coming up in this discussion. He said he was operating from the information given to him by the County and Barton & Louguidice. He said he continues to be open to legitimate options. Commissioner Thomas McTygue asked if there was agreement that 4 mgpd was off the table. He said if that was true, the cost per thousand gallons would like to up considerably. Commissioner Stephen Towne said we don=t know how much it will go up because there could be additional grants or subsidies. Commissioner Thomas McTygue said the City is being asked to put up a considerable amount of money for these water lines while the Town of Wilton will put up nothing and they will have a line run through their town. He said there should be some type of shared agreement for other municipalities to participate. He said the County should find out who is interested and ask they to share the expense. Page 6 of 8 City of Saratoga Springs City Council Workshop Thursday, October 16, 2003 Mayor Kenneth Klotz said it was likely that the County would have more of a negative impact on Saratoga Lake than the City=s alternative of using the lake. He said if water lines are laid there will be significant growth in the County. Commissioner Stephen Towne said no matter where the water comes from there will be growth. Bill McTygue agreed but said the Council needs to focus on its own needs. Bill McTygue pointed out that surrounding municipalities, except for one, do not have the ability to treat water. He said perhaps they should be looking at their own distribution system and that would increase their costs. Commissioner Stephen Towne asked what was the connection to the City=s plan. Bill McTygue said it was much like the sewer district issue. Commissioner Stephen Towne asked if Bill McTygue meant that if, for example, the Town of Greenfield needed to construct a distribution system it would somehow impact the City=s rates. Bill McTygue said he did not know and that was why the City had requested a business plan from the County. He said the towns do not have the ability to deliver water to their residents and it was likely that those costs would be added in. Commissioner Stephen Towne said that does not have an impact on the City=s rates. Rich Straut said that when the capital improvements begin to kick in and when there is branching out to surrounding communities the rates would likely go up and the City rate payers would pay for those improvements. He said he did not ultimately know what those costs would be or if there would be a cap. Commissioner Stephen Towne said he understood that the capital improvements would be divided up between the participants but that the cost of individual distribution systems being included there was no basis for. Bill McTygue said that was a question that had been asked and not answered. Bill McTygue said it was like the sewer district. Every time there is an expansion it will cost the rate payers. He said the sewer district is currently undertaking a massive expansion and that cost has been rolled into the City=s rate. He noted that the City=s rate went up 53 percent last year. Commissioner Stephen Towne said the sewer district and the sewer rate has been frequently mentioned this afternoon and suggested that perhaps there was an issue that deserved more attention. He said he knew very little about this matter but had heard arguments from both sides. He suggested that perhaps the County should be brought here to the City to explain this rate. Commissioner Thomas McTygue said Commissioner Stephen Towne could ask whomever he wanted to appear for discussions but suggested that he speak to Richard Mullaney, attorney, about his matter. Bill McTygue said this was much like taxation without representation. He said the City has 10 percent representation with 50 percent of the budget being paid by the City. He said the City has gotten a raw deal on the sewer matter. Commissioner Thomas McTygue noted that once the residents of the Town of Wilton complained their rate went down by $22,000 and the City=s rate went up by $22,000. Bill McTygue said he has presented arguments to the sewer district many times stating that the rate structure is unfair. Doug Ward said he had been charged by the Council to develop a DEIS on various issues including the Malcolm Pirnie report. He said it was difficult to do because the Malcolm Pirnie report is only conceptual and is incomplete. He said he had great concerns on developing a DEIS without final documents from Malcolm Pirnie further noting the Malcolm Pirnie document could continue to be modified which would only then change the DEIS. He said it was also a waste of money to do so. He said he had spoken to Commissioner Stephen Towne on this matter and he agreed and he was continue to operate under that thought. He said pursuant to SEQR the Saratoga Lake alternative has been very thoroughly reviewed. He said with respect to the upper Hudson alternative, there is not enough information to do the kind of rigorous analysis that had been done on the lake. He said what the Council has before them is a Abroad brush@ look at the upper Hudson. He said the County is seriously proposed the alternative and they are asking the City to commit to that alternative. He said the City cannot commit to that alternative without a full DEIS which requires the County to do a much more specific proposal. He said with a DEIS on the upper Hudson an Aapples to apples@ review could be done. He said the DEIS is necessary before the City can commit. Commissioner Thomas McTygue suggested that be explained in writing to the county. Page 7 of 8 City of Saratoga Springs City Council Workshop Thursday, October 16, 2003 Mayor Kenneth Klotz said it was clear that the City was wasting its time if the County alternative is not serious. He said the City knows that it needs water and it has been put on notice by the Planning Board chair that there is a limited amount of time for the Council to address this matter. He said the longer this process goes on the more alternatives that appear. Commissioner Stephen Towne said this information including the letter from Rich Straut should be shared with the County. Bill McTygue said that could be done. Commissioner Stephen Towne also suggested that if more meetings such as this are scheduled they should be scheduled in the evening when more residents could attend. ADJOURNMENT There being no further business, Mayor Kenneth Klotz adjourned the meeting at 2:55 p.m. Respectfully submitted, Kathy Moran Clerk Page 8 of 8