BY ADAM ATKINSONNorth Country This Week

POTSDAM — The multi-million dollar cost projections for the Route 56 water and sewer districts have residents in the corridor questioning whether the town should pull the plug on the project.

But if the town pulls out now, district property owners will be saddled with a debt for decades for the more than $1 million spent on engineering work thus far.

Ballooning construction cost projections, lack of easements and monthly bills are on the minds of the residents and business owners inside the districts north of the village.  

Some are also wondering why the costs of the districts, now nearly through the design stage, are not being shared among all town residents if the stated goal of the multi-million dollar infrastructure project is to enhance economic development of the municipality as a whole.

Residents of the districts brought these concerns – along with questions about the amount of money spent thus far, project timetable and other issues – to the town board’s meeting Tuesday, April 9.

The town is stuck between a rock and hard place in regards to the issue. If they pull out as was suggested last year by the legal counsel the municipality hired to form the districts, attorney Roger Linden, then district residents and property owners are on the hook for the debt incurred up front for the design work done by engineering firm C2ae. 

C2ae is about 95 percent done with the design at this point and about $1.1 million has been spent thus far, estimated Town Supervisor Marty Miller at the April 9 meeting.

In January 2021, registered voters residing in the Route 56 corridor approved that the total cost of the sewer district project there was not to exceed $5,511,000. The total cost of setting up the water district was approved to not exceed $4,802,000.

However, estimates from last year on the project were projected around $8,109,500 for the sewer project and $6,665,000 for the water district project.

And, the expenses could rise once the project bids finally come in.

For their part, town officials and the engineering firm charged with designing the district advocate for finishing the last 5 percent of the design process and then going to bid for the construction.

The bids will zero in on what the total project cost will be. 

Then, town officials say, the project would have to go before the districts’ roughly 78 registered voters for another ballot decision.

Potential debt

Grant funding for the project won’t kick in to reimburse expenditures on the project until construction begins.

Miller, who was elected last fall to the supervisor’s position after serving on the board as deputy supervisor, said he is working to get more grant money from federal and state sources to pay for the extra expected cost of the projects. He asked the property owners who attended the meeting voicing their concerns to give him time to work on the issue. He also offered to meet with anyone from the district to hear their position and try to work out a solution.

“This project started… I think it was about 2013, 2014, way before my time on the board,” Miller said during his comments at the top of the meeting. “Here we are in 2024 and it's still in the process.”

The town board approved the districts in September 2020 and public votes on final approval of the districts were done in January 2021. The measures passed with 19 yes and 10 no votes.

“So the resolution passed and at that time the district was formed,” Miller said. The supervisor said once the district was formed the town moved ahead with the engineering and the planning for districts. While design work was underway the town secured a bond for the up front cost of engineering work.

“So that being said, once the district was formed, any debt that was incurred on this project, falls on those people in that district,” Miller said.

“I don’t make the laws, I don’t make the rules, we follow the guidelines that were put in place,” said the supervisor.

“Now that being said, if you don’t get any pipe in the ground, you’re going to pay for a dead horse for 35, 37 years,” said Miller.

The supervisor said that if the project does get pipe in the ground, district property owners will get a bill, but grant money the town has secured and other funding it hopes to lock down will offset that cost.

“I need more grant money,” Miller said. “We have $7 million in grant funds right now. Seven million dollars. I just wrote a grant, turned it in Friday to (Senators) Schumer and Gillibrand, for another $2.3 million,” the supervisor said. “I don’t want low interest loans, I don’t want loans, I need grant money.”

“I understand the project has to be affordable, I said it right from day 1,” the supervisor said. “If it's not affordable, you are right, what’s the sense of having it.”

“The problem I have right now, is that you people are going to have debt, okay. I don’t want to see debt. If there is going to be debt, I want you to have something.”

“What I’m asking for is your energy to help me to write letters to the congressional, and the politicians, to get more grant money, so that what you are paying for, you are getting something for it,” he said.

Miller said the town has paid over a million dollars thus far for the design work, and if the board was to stop the project right now, the property owners of the district would be saddled with paying off that debt for decades “with no pipe in the ground.”

Miller said the project should go to bid to get real numbers on the cost, not projections. He said once that happens the town can go to granters with the real cost and ask for specific amounts to underwrite the cost.

Miller said the residents of the district will get to vote on the project again to decide to move forward or not. “(But) if you vote it down, you are still going to be saddled with that debt for 35 years, 37 years,” Miller said.

Residents voice concerns  

Later during public comment, Jim Snell, who owns property in the district, and who had voiced concerns at a meeting last month, read a statement from former town councilwoman Judy Rich on the issue. Rich could not attend the meeting.

“‘I had and have had great concerns about the cost of the proposed water sewer project because according to a very strange state law only the people in that Route 56 district will be required to pay for it,’” Snell read from Rich’s statement.

Rich wrote that over the years it has been “impossible” to get fixed figures on what the exact cost of the district will be.

Rich wrote that when the project was put to a vote there was not any way of knowing what the real costs would be.

“‘The ship is sinking. It’s time to abandon ship.’ That’s from Judy,” Snell said.

“What we want is accountability and transparency,” Snell told the board directly during his public comment time. “And the people who are here tonight do not feel that accountability and transparency have been given properly.”

Snell asked how much had been spent on the project thus far. Miller and Ian Yerdon, C2ae engineer, verified that around 95 percent of the design fee – about $1.1 million of the town’s $1.7 million bond – to get the project to bid, had been paid. 

Yerdon said the remaining investment to go to bid was “minimal” and said the firm continues to recommend the town see it through and seek additional grant funds to move the project forward.

“How can this project be terminated now?” Snell asked.

Miller said that he felt that decision should be in the hands of the people of the district at a vote, but the vote can’t be held until the town gets a bid for the project so it has fixed costs to decide on.

“So you are going to be called in again to vote. Then, if you turn it down, fine. But like I said, here’s the thing that I can’t sleep over, is that you guys are going to be paying for a debt . . . for 35 years,” Miller said.

“That’s unfortunate,” Snell said.

Infrastructure needed

During response to Snell’s comments, Miller said the town of Potsdam needs to grow its tax base through infrastructure improvements. 

Water and sewer districts along the Route 56 commercial corridor would presumably enhance the town’s infrastructure and could lead to a large growth in the municipality’s tax base.

The idea for the districts initially was to attract development along the corridor.

And, the now defunct L.C. Drives company was expected to construct a manufacturing facility in the districts before the firm was shuttered citing lack of outside investment interest in its new electric motor design.

“You need to start growing your tax base,” Miller said. “I’m going to tell you right now, this is a real eye opener for everybody.”

“This town had better wake up. Because everybody is going by you,” Miller said. He said the tax base will continue to decline with residents moving out of the town. “We need to put infrastructure in place for economic development. End of story.”

The supervisor said the residents and town officials need to stick together to make that happen, and he again implored those at the meeting to help lobby state and federal officials for more grant money for the project.

Miller said he does not want to see the district residents be on the hook to pay the debt incurred for the districts and said he has “sleepless nights” over the concern.

Concerns over bills, votes

Snell continued in his comment time pointing that single family owners are worried.

“They are concerned about losing their homes because the bills are astronomically ridiculous,” Snell said.

Snell said the original cost proposals nearly doubled. And, the referendum on the districts didn’t come until months later after those initial projections, he said.

Snell questioned the timing of the vote which took place in January 2021 at the town hall. “We were deep into COVID. It was cold as hell,” he said. He claimed that people who were snowbirds or handicapped were not able to vote on the issue.

Town Clerk Cindy Goliber refuted that, clarifying that while voters had to come to the town hall to vote, staff did bring ballots out to cars and three of the votes were by affidavit. She said letters were sent to district voters to notify them of the voting as well.  

She pointed out that the town followed election law to hold the special vote, as the municipality is obligated to do, and no voter was turned away or excluded from the process.

Snell said he appreciated the efforts of town officials in seeking clarification on the issues related to the districts, but he said those who were in attendance at the meeting to voice concerns feel there has not been proper transparency.

“What are the damn dollars? What is it for? When was it spent? People don’t know. How much is this going to end up costing us? You don’t know. We don’t know,” Snell said.

“Nobody knows that until it goes out to bid,” Miller said.

Snell was critical of the town incurring debt for the project already just for the design phase.

Ian Yerdon from C2ae said that municipal infrastructure projects like the Route 56 districts always have a debt service. Yerdon said grant agencies will not fund such projects at 100 percent and  there will always be local share to be borne by the municipality or district. Municipalities will often secure bonds to pay for up front costs of projects while they wait for work to be approved for grant reimbursement like in Potsdam’s case.

“Every water or sewer district that we work on operates the exact same way,” Yerdon said.

Miller said the cost project increases are why he is seeking more grant money to make the project affordable.

“I’m doing a lot of begging,” the supervisor said.

Grants and funding so far

The town has been successful by most accounts in securing outside funding for the multi-million project.

Miller said for the water district the town has a Rural Development loan of $1.657 million, a USDA Rural Development grant of $3.125 million, a USDA Rural Development pre-planning grant of $15,000, an owner contribution of $5,000 and a Water Infrastructure Improvement (WIIA) grant of $500,000.

The sewer district project has drawn a Rural Development loan of $3.1 million, a USDA Rural Development grant of $2.391 million, a USDA Rural Development pre-planning grant of $15,000, an owner contribution of $5,000 and a Water Infrastructure Improvement (WIIA) grant of $1.399 million.

“Jesus man, you gotta let me work, let me do my job, let me find money. That’s all I’m asking,” Miller said to Snell. “Give me the opportunity to work for you.”

Miller said he would be willing to meet with each and every voter individually to talk about their concerns. “Just give me time,” he said.

Easements needed

Snell said he was under the impression the project could not go out to bid until easements were in place.

Miller said there were still reviews needed by state agencies of the design work and those would take a few months.

The supervisor said the town would be working to secure the remaining easements during that time.

“If people refuse to give easements, what’s the next step? I’m sorry to be obstinate but we want to know,” Snell said, suggesting the town could go after the easements with imminent domain law.

Yerdon suggested instead that infrastructure design could be rerouted to a certain degree if needed, although it may increase the cost.

Concerns voiced

Route 56 residents at the meeting voiced concerns largely about the growing cost projections. Some advocated for “pulling the plug on the project,” and others questioned why the town could not pull water from the village main instead of constructing its own water supply for the district.

Still others called for the town at large to share the cost of the districts instead of just the district residents. Others were concerned about easements and if the district had enough commercial properties to warrant the formation of the districts.

Jane Freitag, a Route 56 resident, asked for the names and addresses of the state and federal grant agencies to write letters in support of the town’s request for funding.

Frietag also asked the board to give updates on the water and sewer districts to the residents inside the district boundaries.

Miller said the board has discussed the best way to update the district residents. He said he prefers face-to-face discussions like that which was underway at the April 9 meeting.

He said he would schedule special meetings or meet with anyone individually to discuss the issue.

“You tell me what you want and I will somehow make it happen,” Miller said.

Freitag said she has yet to sign her easement.

“I’m waiting for it to go to bid and you come back and tell me it's going to be X dollars a month for my services. And, then I’m going to take that to my attorney because I want to protect my trees, and I want to do what needs to be done to protect my trees,” Freitag said. “But I’m not going to sign an easement until I know how much water and sewer is going to cost.”

“I’m not trying to be obstinate, I’m one of the few people who wants water,” she said. “But I need to know the cost.”

Miller said that having district residents attend the meeting April 9 to ask questions showed that they cared about the issue and he expressed appreciation for that. However, he said the town had had several public hearings on the issue over the years, and in some cases only one person or no people would show up.

“We needed you at those public hearings,” Miller said.

Bob LaRue, a Route 56 resident who has previously addressed the board to express his opposition to the project, said he still opposes the water and sewer district projects, especially now that he is retired and on a fixed income.

“I don’t see a purpose for this project, because we have water and sewer and we are only doing it for a minute situation . . . for a select few that we are all having to pay for,” LaRue said. He said he has lost sleep at night thinking about the project.

“The costs that are involved are of great concern to me,” LaRue said.

“I understand you guys have inherited a process that you didn’t have anything to do with and now you are trying to figure out which way to go,” LaRue said.

“I know for example, we are in an economic bind with L.C. Drives driving on out of here,” he said. “So it was a sinking ship in that regard to start with.”

“As the costs continue to skyrocket from the original costs four years ago, the economic times basically have changed as well. So has the situation having to do with how we are going to handle these things.”

“And, at least for now, maybe the project should be scuttled, if not completely,” LaRue said.

LaRue spoke about how numerous businesses along the same route have closed their doors in recent years as well.

LaRue said he has spoken to about 20 people in the corridor over the last few days and said not one of them believed the project was needed or wanted.

He said many were on fixed incomes and believed they could lose their homes because they would not be able to afford living in the districts.

LaRue said he respected town officials and appreciated the work they had done on the project, but said that most people he has spoken to don’t see the value of continuing the project.

“It’s time to pull the plug on the thing,” LaRue said, adding that he believed that the debt incurred to date would be less than that incurred once the project is completed.

“Putting lipstick on a pig as they say we still are going to have a pig. That’s what we got. We are painting money on top of the situation but we still got a pig underneath,” LaRue said.

Route 56 resident Larry Reese commented on the project from a business perspective pointing out that sometimes projects have to be abandoned and it's “painful.”

“Listening to both sides, I’m not convinced we have to do it yet,” he said. He added that he has had one potential buyer of his property turn away when they found out he didn’t have water or sewer service there.

“We are sitting on a piece of property that is never going to appreciate in value,” Reese said. “That bothers me, because with a business background I’m used to calculating how we get a rate of return on everything we do.”

Reese said there is not going to be a rate of return on any of the properties in the district unless the town does something to appreciate the value there.

However, Reese said he would like to get a handle on the cost because when he voted “yes” for the cost initially he thought they were fixed prices more or less.

“I have to kick myself for being uninformed,” he said. Reese said now the cost projections are an additional $2 million.

“I’d like to know what the costs are going to be and then I will help you write letters to get those grants,” he said.

More information

To learn more about the districts and their establishment visit the town website at https://www.potsdamny.us/government/rt-56-water-sewer-districts.html .