Arkville water district loan costs cut

Staff report
The loan portion of the Arkville Water District upgrade project has been reduced by more than half from original calculations, it was announced last week.

Loan obligations for the project have been lowered to $377,000, after the funding agencies reconsidered the project in the wake of last summer’s historic flooding.

The project cost stands at $2,339,000, but grant funding has been increased to cover $1,962,000 of the total. The $377,000 loan balance will be paid off over 38 years at 2.25 percent interest. Repayment will be the responsibility of Arkville Water District property owners.

Low interest rate
Middletown Supervisor Marge Miller explained that the USDA Rural Development loan was established at a low interest rate because the average income of district residents meets income eligibility guidelines.

The loan portion of the project had been calculated at $852,000 after the New York State Health Department determined that arsenic filtration would be needed for the system.

The Middletown Town Board approved the needed system upgrade about three years ago. The project includes: replacing water mains along Route 28 from Frank Street to the Delaware and Ulster Railroad, eliminating several “dead ends” in the system, drilling a new well on land behind the railroad and building a pump house.

Second well needed
Creating a new well and turning the existing well on Pavilion Road into a secondary source was a project key, because the NYS Department of Health requires municipalities to have a backup water supply.

The Hubbell Companies of Kelly Corners was the winning bidder for installation of the new water mains. Work commenced last August 5, but the devastating flooding that hit the area on August 28 tore up a large section of the work on the low-lying section of Route 28.

Supervisor Miller noted that the flood halted work on the project for about a month. She also explained that the NYS Department of Transportation repaired the flood-damaged portions of the project at no cost to the district.

Many water district parcels were severely damaged by the flood, with a number of properties destroyed by the event. As a result of these losses, project officials appealed to the funding agencies to determine if additional grants could be secured to lower the loan burden.
The supervisor said that, in an unprecedented occurrence, the funding agencies agreed to increase the grant awards and decrease the district’s loan obligations.

Supervisor Miller pointed out that an additional $195,000 Emergency Community Water Assistance Grant was awarded to the district in June to elevate the existing pump house on Pavilion Road so that it’s located above previous flood levels.

The installation work on the water mains was completed in October. Construction of the pump house is progressing and the entire system upgrade is expected to be operational by next October.