TOWN OF WATERTOWN
Special Meeting
Municipal Building
August 20, 2024
Members Present: Joel R. Bartlett, Supervisor
David D. Prosser, Councilman
Joanne McClusky, Councilwoman
Michael Perkins, Councilman
Robert Slye, Councilman
Members Absent:
Attorney Harrienger was also present.
The purpose of tonight’s meeting is twofold. The main goal here is to provide people with information to determine the outcome of the Lettiere Tract water system. The town engineers have put together a map, plan and report to extend the water service to Outer Ives Street Road. The figures sent out to the residents left out four parcels on Holcomb Street. The new figure will be a little lower when they are calculated in. The more parcels involved will lower the cost per parcel. Supervisor Bartlett explained the problem with bonding is you cannot bond to purchase an aging system. To allow for bonding the town could expand the district to Ives Street Road. The ultimate goal for tonight is to, offer information to make a determination whether the residents want to purchase the district from Mr. Lettiere. The second thing is to make a determination on whether to form a new district to include the Ives Street area. The Board is acting as a conduit between the Town of Watertown, City of Watertown, and the residents. The information sent out was based on a 30-year amortization schedule for bonding the project. The project includes the calculated price to purchase the Lettiere system and adding new infrastructure to the Ives Street Road area.
Supervisor Bartlett introduced Pat Scordo and Ryan Aubertine from GYMO Engineering. They are here to answer any questions people might have concerning the project. Originally, they had planned to have the petition available tonight to sign for those in favor of the proposal. The first step would be to form the district. The Town cannot purchase water from the City until a district is formed. The district was expanded to include Ives Street Road and four units on Holcomb Street Extension.
Pat Scordo, Civil Engineer with GYMO Architecture, Engineering and Land Surveying. He is here tonight with his colleague Ryan Aubertine. They have been working on this project since early spring. Their firm was retained by the Town to study the proposed Southside Water District. This will consist of two separate areas. The first being the existing water district known as the Lettiere Tract with approximately 120 users. The second being Ives Street Road to service seven existing homes and four vacant parcels. The Town is considering the purchase of the Southside Water District and addition of new users in the area. Tonight, they want to solicit the input and answer questions to determine the future of the plan. The study revealed that if you look at each area independently, financially it wouldn’t work. As Supervisor Bartlett alluded to, bonding for the purchase of infrastructure that’s approaching 60 years old was not a possibility on its own. That is where the scenario came forth to include the Ives Street Road area. By combining the two areas it makes it more feasible for bonding. This would be a town operated and maintained water system but owned by the people in the district. The spreadsheet showed the annual amount resulted from a 30-year market rate bond anticipation note that the Town would take with a speculated 3 ½% interest rate. The way that spreadsheet was set up was based on assessment showing everybody’s name, address, tax parcel number. That assessment of all the parcels within both areas, were tabulated to a total, and then the assessed value was divided by that total to come up with a fraction amount. That was, in turn, multiplied by the annual amount of debt that had to be paid over 30 years. The other possibility is based on an equivalent dwelling unit basis; this is like a flat rate. This would come out to approximately $520 for each dwelling unit for 30 years. This would not cover the use of the water that would come as a separate bill. He compared the cost being paid now to the Lettiere Water System to the possible cost per units if purchased from the town to include O&M charges. The town is identifying $6 per unit, a unit being 748 gallons. This converts to roughly $8 per 1000 gallons. An average household uses 175 gallons of water a day, multiply that by 365 days, you get about 65,000 gallons of water a year. This works out to around $513 a year for an average household. The important thing that must be accomplished is to keep it under the New York State Office of the State Comptroller threshold of $1,082 annually which includes capital cost and water usage. If it’s over that the town would have to seek their approval and explain the case of why that cost can’t be driven down. If it goes over this threshold, it could be a yearlong wait for review and you may not even get a green light from the comptroller. If they say no, we will have to find a way to lower the cost of the water district. In the letter sent out, it mentioned the annual amount of payback to be around $65,000. It identified the total project cost, which includes the cost for outer Ives Street Road and the purchase of the existing system from Mr. Lettiere. Part of what they are trying to accomplish tonight is to solicit the residents feedback. The number is broken into two segments; the outer Ives Street Road portion is estimated at $693,000 project cost. That is design, engineering, legal, administration, and construction. The balance is $500,000 to purchase the Lettiere Tract system from Mr. Lettiere, for total project cost is $1,193,000. The town is looking to finance that over a 30-year period.
The existing Southside Water already has water, hydrants, an operator and a regulatory unit. The Public Service Commission overlooks everything Mr. Lettiere does. However, in this case, the town would operate and maintain the lines. For the residents on outer Ives Street Road there is little or no water or poor-quality water. This would allow residents to basically abandon their wells, chlorinator, storage tanks, and pumps. The other benefit would be there would be new fire hydrants located every 500 feet which could allow for savings in their homeowner’s insurance policy. In both areas it would increase marketability of the parcels and properties. Although there aren’t a lot of vacant parcels, additional residential development could happen that would lower the individual cost. Typically, what happens is, if municipal water gets installed, some type of development follows. This would spread out the capital cost and lower it for existing users.
The timeline for the project is about four months’ worth of paper work to establish the district. This would entail environmental studies, water district formation, and a bond resolution. This will probably take to the end of the year. If the project is a go, GYMO would start design plans about January 2025; and move to get NYSDOH and Jefferson County approval, as well as any other agency that needs to approve it. Then they would get easements to secure construction to the outer Ives Street Road area and Holcomb Street Extension if needed. If everything is ready by July, the project can be bid out in August, and hopefully start construction in September 2025. It would not take long to get the pipes in the ground before winter sets in. Restoration of lawn and surfaces or anything disturbed would be finished the spring of 2026.
Supervisor Bartlett stated that the Town would not own the system, the district users and people inside the district boundary would own the system. The Town would operate the district but the people in the district would be responsible to encumber the financial burden of maintenance. He reminded everyone the Ives Street Road extension is a necessary component for bonding. The people that live in the Lettiere Tract could not get a bond to purchase the system and form a district because of the age of the system. The Town Council is basically facilitating all the studies and the upfront cost, in hopes that the residents involved will accept the district formation. The decision is entirely up to the people. The cost to rebuild the existing system within the Lettiere Tract would be more than $6,000,000.
Supervisor Bartlett opened the floor to anybody who chose to speak. He asked to include their name and address for the record and address all questions to the engineer or council.
Steve Wise, Woodside Drive asked what is means to say the residents would own the district and who would maintain the system?
Answer: The Town of Watertown Public Works crew maintains the system. The Town Council acts as administer of all of the town districts. The system will be owned by the residents of the district and be responsible for all the cost and debt service. The town is responsible for bookkeeping, water rate changes, billings, meter readings as operational costs. Those are passed on to the residents in the form of maintenance fees added to the cost of the water.
Tamara Robinson, Woodside Drive, asked when the petition will be ready for signatures. What will be the procedure to get the signatures. She asked if the project doesn’t qualify for grant money; is that based on property assessments or residents’ income, and how does the Board know what the resident’s incomes are?
Answer: The attorneys are working on drawing up the legal description and district boundaries for the petition. The plan is to have it completed within a month. They could have another session or notify everyone by mail to stop into the Clerk’s Office to sign. The petition will need to be notarized. After a period of time the town will reach out to the people who have not signed. If 51% of the property owners and 51% of the assessed value agree in favor of the project it will move forward. The town does not know individual incomes, but know chartered areas, using the US Census Bureau. This particular area exceeds the median household income to be eligible for grant funding.
Patrick Signor, Co Rte 65, ask to explain the Ives Street Road extension a little bit more. Will that include sewer? He is connected to the water now and is interested in sewer.
Answer: This would be for water only. They would be putting in an eight-inch water main connecting into the Southside system. This would include a service lateral up to the face of the homes. The surveyors would locate where the well is, where the line goes and where the lateral goes into the house. They would intercept it at that point at the base of the building.
David Soderquist, Holcomb Street, he inquired if the residents own the district, then why were they not included in the negotiations of the purchase price with Mr. Lettiere. He feels it is an antiquated system that in the future it will need repairs or replacement. It has asbestos pipes and there are a lot of problems. He is not saying Mr. Lettiere shouldn’t have some fair recompense for the system. He stated that because the town is run on a not-for-profit organization shouldn’t there be a cost savings for the residents for the water.
Answer: The reason why there was no involvement in any negotiation with Mr. Lettiere on the purchase price is because they tried to form a couple committees, but it did not work out. There was too much arguing between the people on the committees and they couldn’t establish a price that would satisfy Mr. Lettiere. The town had several appraisals done. One was from the town engineering firm, and the one by an appraisal company. Mr. Lettiere agreed to pay for one half of cost of the study. That appraisal came in with a $691,000 value. We are dealing with the difference between that and the price Mr. Lettiere is asking. They would have to ask Mr. Lettiere if he would negotiate a less amount. It is not the town’s position the get in middle of a price war.
Mr. Scordo answered the question as to where the savings are to the customers. The town is proposing $8 per 1000 gallons of water whereas the customers are currently paying approximately $12.27 per 1000 gallons.
Peter Schmitt, Co Rte 65, asked if new property is developed, will they be required to join the district and pay the same capital cost the existing customers will pay.
Answer: Yes, they will. They are included in the current table as vacant property, as they develop it, they will be reassessed and the debt service will reflect the increase. This will reduce the cost to the existing customers.
Jack Snyder, Orchard Drive, asked if the town has an actual legally enforceable undertaking with Mr. Lettiere in regards to this purchase price? He commented on a letter that was sent out from Mr. Lettiere concerning a rate hike and changing language in their water contract. He questions Mr. Lettiere’s level of commitment.
Answer: No official contract has been signed other than the shared interest in splitting the cost 50/50, for the appraisal that was conducted. Supervisor Bartlett informed Mr. Snyder the town is not involved with Mr. Lettiere’s water system. If there are questions they should be taken up with Mr. Lettiere or the Public Service Commission.
Mr. Soderquist asked if they are still in negotiations with Mr. Lettiere. If they could come up with something that’s amenable to what they think would be fiduciary would be in best interest of everyone, and Mr. Lettiere. Then they would agree to go ahead with a petition. Would the Town be able to ask Mr. Lettiere to write a letter and sign it, saying that it’s incumbent upon him to rescind that rate increase asked for and any other language that he wants in terms of changes. He asked if he will then send it to the Public Service Commission, and say, he doesn’t need it any longer.
Answer: Supervisor Bartlett responded that anything that deals with the Public Service Commission, this Town Council will not be involved with. They will not request letters asking Mr. Lettiere give up his fiduciary responsibility to the Public Service Commission. There might be room still for a little negotiation on purchase price. There are other components of sale that come into play. There are certain water meters that he has to replace. There is certain leak detector equipment that would be included that is not included yet. Would he take less? We don’t know. Supervisor Bartlett could talk with Mr. Lettiere concerning this issue. If the numbers change a new chart will be drafted to reflect the difference.
Mr. Lettiere explained the letter that was sent to the residents was written by Public Service Commission indicating that he is proposing 150% increase. He advised if there were questions to refer to the Public Service Commission to see the details for the raise hike request. He feels this system is best served by having the town takes it over.
Kristen Dean, Holcomb Street Ext. inquired if the purchase price is not a done deal, after they sign petitions, can the purchase price go up? If more properties get added will the cost per unit go down? If they sell their homes will the debt service fee stay with the property?
Answer: There still might be some negotiations to the purchase price. The cost to bond will need to be approved by the NYS Comptroller Office and has to be under the threshold limit. Once they settled on final price the annual cost will be calculated on a final spreadsheet for each property owner. The only way it can change is if there is an expansion of the district, and then the process starts over again. If more parcels get added to the district the price per dwelling unit will go down. If the property owner sells their home the debt service fee will stay with that property.
Mike and Audrey Colello, Co Rte 65, he believes it is the right thing for the district to be maintained by the town. He asked if the cost of water and new construction are a solid price that won’t escalate when the time for construction starts. He feels a flat rate would be the fair way to split evenly between property owners the debt service fee. He is not in favor of the district if it is based on assessed evaluation.
Answer: Mr. Scordo answered they projected inflation through 2025. If this project gets pushed out longer there could be inflation issues.
Karl Kidder, Holcomb Street Ext, expressed his thoughts that because the cost to extend the district to Ives Street Road to 7 homes raises the cost so much, he believes the debt service based on assessed value is the fair way to figure it.
Answer: That will be a decision the Town Board will need to determine. The cost spreadsheet will need to be refigured to include 4 parcels on Holcomb Street Ext. that were left off. The district boundaries will need to be formed before the official petition will be ready for signatures. The residents will be notified of how to proceed. The Board may call for another meeting to update on revised cost. The Board will determine if it will be scored on flat rate or assessed evaluation for the debt service prior the petition being drawn up.
Tamara Robinson, Woodside Drive, asked if they were getting a complete new water system including new piping.
Answer: The Lettiere Tract it will be existing infrastructure, Ives Street Road will be getting new piping.
Andrew Mitchell, Orchard Drive, asked if the Town verified that all seven people on Ives Street Road actually want the water. He wondered if there would be a cost savings if they did not expand to all 7 homes. He believes that a flat rate system would be the fair way to split the cost.
Answer: That will be verified through the petition process. If the district extends to their property they would contribute to the debt service even if they choose not to hook onto the service. Supervisor Bartlett added there are a certain number of vacant parcels in that area. He mentioned there is a possibility of a large scale development coming that would like to have public water and sewer. This will have a dramatic impact on the overall cost to the existing residents in the district.
Debbie LaClair, Co Rte 65, asked if arrangements would be made for residents who might be out of town when the petition is ready to be signed.
Answer: Attorney Harrienger responded to the difficulty with that. Technically, you would want one petition that each property owner signs. Otherwise it would be considered separate petitions; it should be one writing document.
David Soderquist, question of Mr. Scordo, if his firm was instrumental in or did you conduct the appraisal of the Southside water? He asked if he would give his best estimate of the aging system. He feels they are paying a premium dollar for it. What does he anticipate down the road for problems that will come back and cost the residents more money? .
Answer: No, they did not do the appraisal. He studied the appraisal as a civil engineer, and summarized the report for the Town Board. He relied on the expertise and the experience of the appraiser of that document. He broke it down into a fact sheet, with the help of Attorney Harrienger, and put it in a relatable analogy for the Board. He did his best to make it understandable so they could get to the point where they are today. There is no way to guarantee anything but this document was prepared by a professional. There was nothing that stuck out at him that looked like it was an incorrect evaluation or calculation. It seems authentic and professionally prepared. They used three different approaches within that appraisal, and came up with a weighted number.
Another question was asked what happens if there is a major break, who would fix it and pay for it.
Answer: The town crew would make the repairs. Supervisor Bartlett stated it will still be cheaper to repair the existing infrastructure than it would be to replace it with new piping. Any cost incurred will be absorbed by the customers. Supervisor Bartlett will recommend to the Council that instead of being billed twice a year for services, to bill on a monthly basis.
There was a question asked about the system? Has anybody looked at it or ran a camera through it? They think there is a major problem in one section on Birch and Sunset. She worries there is going to be problems from day one that the customers will be charged for.
Answer: That was all part of the appraisal process. The utilities and the pipe in the ground were all inventoried, and a value was placed on that. Mr. Lettiere is selling a business; the appraisal says the infrastructure in the ground would justify what he is asking for it. It has been determined that the $641,000 value of the aging system is an appropriate value. It is now up to the residents and Mr. Lettiere to negotiate the purchase price.
Mr. Lettiere responded you can’t put a camera in the water pipes as it might cause contamination. They did look at the inside of some of the pipes after repair and tested them. If there were failures they have the explanation for them. There has not been a failure since 2019.
Supervisor Bartlett responded there are no guarantees, even on a brand new system. It would cost $6,000,000 to put in a complete new system. The town has done all of the studies to get to this point to give the people better understanding of what is happening. They might be able to lower some of the cost expectations if they follow up with Mr. Lettiere and there is a movement on the purchase price.
It was asked how the customer will be notified of the final cost and when the petitions will be ready for signatures.
Answer: The town will send out notices hopefully within a month.
Wava Snyder, Orchard Drive, asked about how the bonding works, will it be billed separately.
Answer: The debt service will be billed on the annual Town & County tax bill.
Supervisor Bartlett thanked everyone who attended the meeting tonight. He apologized that the petition was not ready for tonight. It will take a month or so to get that together with the legal description for the district. The spreadsheet will need to be modified prior to getting signatures. If it is done sooner he will let everyone know. They might schedule another meeting to go over the actual cost for each property. At that time each property owner can make the decision if they would like to sign in favor of the district. It will be on file at the Clerk’s Office and can be signed anytime during regular business hours.
David Soderquist asked if Supervisor Bartlett would be negotiating on behalf of the property owners with Mr. Lettiere.
Supervisor Bartlett responded he would ask Mr. Lettiere his lowest price but would not actively negotiate for a lower price. Mr. Lettiere has the right to ask whatever he feels it is worth to him and that is what the town will have to go with. It is then up to the property owners.
There will be another sessions on Thursday August 22, 2024.
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Pamela D. Desormo, Town Clerk