Red Hook Village plans $9 water rate hike

Water main breaks, corroded pipes and a county demand that Red Hook village recondition its water storage tank will add up to an extra $9 on residents’ quarterly water bills this year.

The increase was the result of a village board vote at its May 12 meeting to start a multi-million-dollar Phase 2 upgrade on the village water system.

While Phase 1 reconditioned and automated the wells, installed new water meters and paid for a backup generator, Phase 2 of the project will replace all the corroded 2- and 4-inch mains in the southwest quadrant with 8-inch pipes.

Village Mayor Ed Blundell told the board he feels it is more cost-effective to completely overhaul the infrastructure than to constantly patch it, pointing out that in the last quarter of the fiscal year, the village spent $22,500 to repair broken pipes.

To help pay for the upgrade and meet the costs of patching the system, the board voted to raise water rates 15 percent which will increase the water budget from $367,060 to $426,000. So for customers who use the tier 1 amount of 5,610 to 22,400 gallons per quarter, the rate will increase from $60 to $69 this year and other tiers of use will increase similarly. The rate will be raised another 15 percent next year and 11.5 percent the year after that.

There are 825 metered customers for whom the village pumps 231,000 gallons a day and 2.6 million gallons per quarter.

Blundell said the village actually pumps more water than is used, which means that the aging and corroded pipes in the system are leaking. “The system is from the 1930s, and it’s failing,” he added.

He also said there was no access to replace 125 old meters, so the village is only able to estimate the quarterly billings at those properties.

Since the installation of new meters last summer Blundell said the gap between what they pump and what they sell has closed by 10 percent, but the system is still losing water somewhere. The village is now monitoring the wells between 2-4am (when typically no one is using water) to try and trace the leaks, but no report has been issued yet.

Based on engineering reports, the county’s Department of Health wants the village to recondition the water tank on Tower Road, which is estimated to cost $800,000. However, Blundell said a new 368,000-gallon tank will cost only $525,000 and the existing 225,000-gallon tank will be left as a cell tower, which brings in $79,000 annually.

Replacing all the water mains is estimated to cost $2,468,000. With the addition of a new water tower, the village is looking at a total cost of $2,993,000, out of a Phase 2 budget of $3.8 million.

To fund the project, village officials will be applying for a USDA loan for $3.8 million over 38 years at 3.25 percent interest, or $182,000 each year once the project is finished. The balance of the loan will go for legal and engineering costs, estimated at $507,000, and contingencies, at $300,000.

According to village officials, even though the loan payback won’t be due for at least two years, a customer rate increase is needed this year so that the village can show the USDA it has the money to pay back the loan and can build a fund balance in the meantime while paying out for repairs.

“A significant portion of this work will go to reconditioning the streets after they are dug up,” said Deputy Mayor Brent Kovalchik, who said he also feels this is a health and safety issue.

Blundell said the village engineers predict it will take two construction seasons, starting in 2015, to finish the job. And local contractors will be able to bid for the work.

“Lots of municipalities neglect their infrastructure,” Blundell said. “This is an incredible opportunity to make sure that when we turn our taps on every morning we’ll get a consistent flow of water.”

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