The plan sounded like a ‘no-brainer’. The municipalities of Marion, Macedon and the town and village of Palmyra would join forces to address future waste water concerns.
The DEC (New York Department of Environmental Conservation, along with the federal EPA (Environmental Protection Agency) had been building concerns of how wastewater is not only treated, but how treated water is discharged back into the environment.
Public concern over procedures and chemicals used have evolved over the years. What was acceptable only a decade ago, is now not only discouraged, but found to be a danger to the public health and environment over long term periods.
Talks started in 2016, with the Wayne County Water & Sewer Authority as the lead agency. Discussions started with plans to close down the aging wastewater plants in Macedon and Palmyra due to the similar age and rapidly deteriorating condition of those plants. The relative proximity of those plants and similarly large projected capital costs suggested that a regional solution might make sense.
After discussions were initiated, it was determined that the Town of Marion’s existing wastewater treatment plant was also in similar straits, with the Town also being under a strict consent order from DEC to complete costly upgrades. Marion was then entered into the plan for inclusion into the proposed regional solution.
From a water quality standpoint, the plant in Macedon feeds wastewater into the nearby canal, but must redirect its flow to the nearby Ganargua Creek when the canal empties for the winter months. Both waterways are not ideal for proper assimilation of treated wastewater from a fast growing community. Marion was discharging its treated wastewater to a small stream that also had limited assimilation capacity.
The Village of Palmyra Treatment Facility (which was also currently receiving flows from a limited portion of the Town of Palmyra) was located near the headwaters of where the canal and Ganargua Creek converge, making it the ideal place to build a new infrastructure plant that could meet the needs of all involved municipalities. The plan took into consideration not only current use, but projected future growth.
An Intermunicipal Agreement was established among all parties and the Wayne County Water & Sewer Authority hired engineers to complete an initial study and make recommendations for the best long term solution to the needs of all communities. The short and long term considerations for this Study were amplified by the DEC`s consent orders and other directives to bring all existing plants into full compliance.
The conclusion of the study was that a singular regional treatment plant along with other required improvements and decommissioning activities at the existing plants made sense both environmentally and economically for all involved. Comparative cost estimates showed that the regional approach was more cost effective than the alternative of each municipality upgrading its own facility, especially when looking at the long term. A large part of the projected long-term cost advantages related to the economies of scale associated with lower operating costs and labor savings with a singular plant vs. the operation of multiple individual facilities.
Once the decision was made to proceed with a regional solution, new agreements were signed and project financing arrangements were made with Environmental Facilities Corporation (EFC), the State finance agency that would fund this project.
As final details on funding of this initial project were being completed and project engineering about to get underway in earnest, the Town of Walworth approached the Authority with a request to join the Regional Project. After some initial discussions among all parties, Walworth independently chartered a study of its options to best meet both existing and future DEC mandates and standards.
Walworth was under similar mandates from DEC to install disinfection improvements and it was recognized that other immediate and near-term improvements were necessary to bring the WWTP into compliance and to keep it in compliance in the coming years. The Walworth plant was also continuing to deal with the considerable challenges associated with wastewater coming from Baldwin Richardson Foods, one of the largest employers in Wayne County and the generator of a high-strength industrial waste.
After consideration of many factors, including a great deal of uncertainty about the cost of complying with future discharge standards and effluent limitations, Walworth indicated its intention to be included in the Regional Project.
Several meetings were then held with WCWSA and all involved municipalities and new agreements were put in place that effectively provided for the inclusion of Walworth into the Regional Project, subject to the ability of WCWSA to obtain funding commitments from EFC and others that would not adversely impact resultant project costs and impacts to the original municipalities.
After several months of financing negotiations, completion of revised engineering reports and environmental studies and negotiation of legal terms and commitments, a new Intermunicipal Agreement (IMA) was signed by all parties to authorize WCWSA to proceed with all necessary steps for a revised Regional Project that included Walworth. Design engineering and interim financing arrangements commenced immediately and have been ongoing over the last two years, resulting in final project approvals in May of 2022 and the opening of bids in June of 2022.
On Tuesday, July 12th, representatives of the participating municipalities were brought together at the Macedon Town Hall to review bid results and project implications.
As anticipated by Aman and many others in light of the current bidding climate, the news was not good.
Even before the bid openings for the project on June 16, Aman and the engineers were aware that bids on similar projects throughout the State were coming in much higher than engineer and financing entities had anticipated. This has resulted in higher debt service numbers than originally anticipated, and in this case, much higher for the participating municipalities in the Regional Project.
Mr. Aman explained that there are many factors at play that have contributed to the extremely high bids that are being seen on capital projects statewide, including this Project.
Contributing factors that have globally affected bid numbers include extremely high material costs and limited availability, long lead times on major project components (sometimes one year or more), local labor shortages coupled with the large number of projects on the streets, and the inability of product suppliers to hold prices beyond 30 or 60 days.
Aman said he is keenly aware of the pipe and supply problems as bids on area water project costs have climbed to unprecedented levels over the last two years.
As an example, Aman pointed out that since the original engineering estimates for this project were prepared, the cost for PVC pipe has risen from a historical range of $3.50 to $7.00 per foot to today’s $26 per foot.
Another factor that has resulted in significant cost escalations to this particular project include the addition of unanticipated equipment that is now necessary to meet the recently announced discharge permit requirements for this plant. Many of these standards now are far more restrictive than historically required and have resulted in additional costly project components such as a filtration system and post-aeration provisions.
Another element that perhaps could have been better controlled involved the bidding of the pump station components and pipeline work under one contract. The purpose behind combining this work under one contract was to have a single point of responsibility for pumping and delivering the wastewater from each of the remote sites to the new plant. Although this decision was well intentioned, the result was that only one bid was received for this contract and it was extremely high in comparison with the other contracts. By bidding all this work as one contract, many local contractors were unable to meet the bonding requirements for such a large project, several prospective bidders indicated that they would likely have bid if the pipeline work was separated from the pump station work.
So what is being done to respond to the reality of the high bids that were received and in recognition of the current overall bidding climate and how can the impacts on user costs be reduced?
Aman outlined the following initiatives that are intended to result in lower costs: 1) The pump station and forcemain (pipeline) contract will be split into two or more contracts and will be rebid within the next month or so in an effort to obtain more competitive bids.
2) Value-engineering changes will be made to several key project elements based upon feedback from contractors, suppliers and others.
3) Additional funding assistance in the form of additional grants and/or principal forgiveness is being actively pursued through both State and Federal Channels.
4) Alternate financing terms are being investigated, including the possible consideration of an extended finance term.
What are the anticipated impacts to sewer users?
The answer to this starts with the fact that the cost of sewer service will be going up significantly beyond the original cost projections. The cost implications of completing a project under the current economic climate and bidding conditions were certainly unanticipated and are unprecedented over the last several decades.
All of the involved municipalities have established a charge on their respective tax bills, which customers have been paying over the last few years. These funds have been collected in order to pay for project development costs in preparation for project construction and have also been established in an effort to move toward the ultimate charge that will be in effect after the project is complete and permanent financing is in place.
Originally, pre-bid project cost imwill pacts for this project were estimated to be a total of $554 per year for a typical single-family residence.
This cost estimate had two main components: a) The cost for Operation and Maintenance (a user`s sewer Bill) which has been estimated at $200 per year after completion of the Regional Project and initiation of WCWSA Operation. * note-this is a significant reduction from current sewer bills, the cost of which varies among the municipalities today. b) The cost of debt service for building the project (including reserve contribution) which was estimated at $354/year. This charge will come annually on a user`s Town or Village
tax bill for sewer customers.
Total pre-bid cost estimate as shown above is $ 554/year ($200 +$354).
Now that initial project bids have been received it is anticipated that the debt service component (b) above will likely increase significantly, although final numbers cannot be determined until project re-design elements are finished, re-bid results obtained and final funding and financing details are known.
Even in a worst-case scenario, the equivalent monthly cost of water and wastewater services to a typical home likely remain as the least costly of all utility services that a home receives.
As a comparison, it is noted that gas and electric bills to a typical home individually are often in the range of $150/month or more, phone bills in excess of $ 100/month and television costs similar in magnitude.
By comparison, typical quarterly water and sewer bills (individually) currently average closer to $30 to $45/ month or less, including the impact of capital charges on your tax bill that are already in place.
Aman stated that he understands and certainly shares the frustration associated with the cost impacts that are now a reality within the current bidding climate and the WCWSA is committed to working in conjunction with the partner communities, Federal and State representatives and funding agencies to make this project as affordable as possible.
One other positive factor that can help in that regard is the notable increase in new and near future sewer units that is occurring in several towns due to new subdivisions, planned connections of mobile home parks and other commercial and industrial connections that will add sewer units to help share the debt service costs.
“Unfortunately, we are at the leading edge of a wave of needed infrastructure improvement projects within New York State that will likely establish new benchmarks for expected user costs in the future,” said Marty.
“In spite of these new unanticipated financial challenges, the planned Regional Wastewater Treatment Project remains a necessary and desired infrastructure improvement project. This project will provide operational efficiencies and a sound long-term solution for the area’s current and future wastewater needs, including the capacity to treat current industrial users such as Baldwin Richardson Foods and other significant users that may elect to expand in Western Wayne County’, he added.
Although the project start has been significantly delayed due to the impacts of COVID during the project design and approval stages and has now been further delayed due to planned re-bidding and pending notice of additional funding commitments, it is still anticipated that construction for the project can start no later than spring of 2023 and be completed within two years or so.
Once the revised bid results are known and the availability of additional funding is confirmed, the participating municipalities will have the opportunity to review this information, evaluate final impacts on users and confirm their commitment to proceeding with the Regional Project.
In closing, Aman expressed his great appreciation for the cooperation and commitment by all of the involved municipalities and others who have supported this project with an eye toward both current and future needs within the overall community.