In a move that will help spread out the price of the village's multi-million dollar water line project, the Board of Trustees voted unanimously at a special meeting Tuesday night (April 24) in favor of increasing water rents, costing most village property owners an additional $220 a year.
The increase is needed to pay off a 38-year loan on a recently installed pipeline that draws water from the Saratoga County Water Authority. The lines were installed after PCBs were discovered in the wells of the village treatment system near the Hudson River.
In a separate matter, water usage rates were also raised 67 cents higher to $4.12 per $1,000 gallons for village users and to $6 per $1,000 gallons for outside the village users. Increasing usage rates will help balance higher expenses in the Water Department's projected 2012-13 Operations and Maintenance budget.
The higher water rents will be paid by village residents based on a new EDU or Equivalent Dwelling Units formula. This formula, introduced at the April 10 Village Board public hearing on the 2012-2013 budget, has been used by other municipalities around the state facing similar financial circumstances.
Here’s how the EDU system works: The EDUs assigned to each insider water user are based on the real property classification listing on file with the assessor’s office. Each EDU will cost property owners $220 per year.
The village has calculated it has approximately 835.5 EDUs within the village at a cost of $220 per EDU. That will produce enough income to enable the village to make its annual loan payment of $179, 597 on the $3.9 million it will borrow from the U.S. Department of Agriculture Rural Development Agency at 3.25% interest. The loan will pay two-thirds of the $6 million water pipeline project; another third is being paid for through grant monies.
Village Mayor Ernest Martin said after considering multiple options, the EDU system was the “fairest way to go” for paying back the debt. “It’s not easy for anyone but we needed this new water line and now it’s time to pay for it,” Martin said. “The Village Board has worked very hard to get this right and to be fair to everyone involved.”
Under the new EDU formula, a single family home, which makes up 69% of village property, equals one EDU. A rental property, on the other hand, could equal multiple EDUs depending on how many “living units” it houses. A duplex would equal two EDUs, a third-unit, three EDUs, a four-unit, four EDUs and so on.
Commercial and other village properties break down by EDUs as follows:
The annual EDU charge for inside village users will be billed on June 1, 2012, and payable within 30 calendar days. The June 1 bill will identify the number of EDUs assigned by the village and include a copy of the village water regulations and rates.
Should a village resident wish to challenge the number of EDUs assigned by the village they must notify the Village Clerk’s office in writing of their objection and the basis thereof within five days of their receipt of the June 1, 2012, bill. Thereafter, inside water users shall be responsible for notifying the Village Clerk’s office in writing of any change in the use of their property that would affect the number of EDUs assigned by the village at least 30 days prior to June 1 of each year.
Income from the new water usage rates approved Tuesday night will not go toward the new water line debt but will be used to help the village balance its annual Operations and Maintenance budget for the 2012-2013 fiscal year of $462,556. Increasing costs necessitated an increase in usage rates, said Deputy Mayor and Trustee John Basile.
The new water usage rate went into effect on April 24 and will be reflected in the October water bills.
During an April 10 public hearing on the water budget, several hearing attendees, who own apartment dwellings, told the Village Board they oppose the new EDU formula because they would be paying for multiple EDUs versus a single-family homeowner and shouldering more of the financial responsibility of paying back the water debt.
A “fairer” way to make up the debt, the landlords proposed, would be to raise the water usage rates for everyone including those who buy water in the town. The town has a contract to buy water from the village through 2016 for its Water District No. One. Those concerns were brought up again at Tuesday night’s special meeting.
Village Trustees, prior to the vote, reiterated to residents their concerns about using water usage fees versus a set formula like the EDUs to pay back the loan. Studies have shown when you raise water rates significantly from one year to the next then people cut back on usage, Basile said. And to top that off 16% of village water bills go unpaid, on average, every year.
“If that happens we wouldn’t be able to meet our debt,” said the Deputy Mayor. “The water usage fee option leaves us with a lot of question marks.”