Orangetown Debates Future of Sewer Department Should it be Privatized, Streamlined or Merged?

BY ROBERTKNIGHT
CITY EDITOR
ROCKLAND COUNTY TIMES

The Orangetown Town Board spent more than an hour Tuesday debating how to reduce costs in its $8 million sewer department.

The department, currently headed by Director Joseph Moran, is the third largest unit of town government in Orangetown, after police and highway, operating a waste water collection and treatment system that is one of the largest such municipal programs in the lower Hudson River Valley.

Almost all of its operating costs are fixed, town officials say, and cannot easily be reduced if Orangetown is to continue treating all sewage generated by the 50,000 residents throughout the municipality.

The town-wide system was created in the early 1940’s by combining the private system at Lederle Laboratories in Pearl River with the US Army system built to serve Camp Shanks in Orangeburg. Within a few years, the system was expanded and now serves the town’s four villages and seven hamlets, from Palisades north to Upper Nyack and west to Pearl River.

Almost every home and business in Orangetown is connected to the town sewer system via underground pipes and transported to the town treatment plant off Route 303 in Orangeburg. There it is purified, filtered and cleansed before being sent in much larger pipes eastward to a point between Piermont and Sparkill where it is discharged into the Hudson River.

Local Cost

Although large industrial and commercial users of the system who discharge their plant wastes into it pay separate fees for this service, the bulk of the $8 million annual cost to operate the system is born by the residential homeowners, through their annual property taxes.

Town officials have tried for years to find ways to reduce this cost, but to little effect since most of the expenses are fixed, such as salaries and benefits for its 38 employees, utility and chemical costs to process the sewage, and bond repayments on the millions of dollars it has cost Orangetown to construct the lateral and trunk sewer lines and the complex treatment plant.

Two other sewer districts serve the rest of Rockland County, with Clarkstown and Ramapo having combined their departments decades ago into the Rockland County Sewer District No. 1, with treatment facilities in Hillburn and Orangeburg. A similar but smaller district handles the sewage from Haverstraw and Stony Point, with all five towns eventually pumping all of their effluent into various points along the Hudson River.

Ever since Donald Brenner was sewer director in Orangetown, various town boards there have contemplated abolishing their town’s operations and merging them into the county treatment network. Among other inducements, merger proponents have cited the fact that the town and county treatment plants are located next door to each other on Route 303 in Orangeburg, and that it would make economic sense to combine them into a single operation, with a single staff.

Brenner and Republicans have steadfastly fought against such a merger over the decades, however, while Democrats have generally either favored it, or at least favored doing a financial study to see if it made economic sense or not.

Study Imminent

Such a study is now imminent, but it probably won’t include an investigation into a potential merger as one of its options.

Council members debated the pros and cons of such a study at length Tuesday, and listened to a presentation by consultant Teno West of the law firm of Pannone Lopes Devereaux & West, a self-described leading expert in the fields of wastewater management and public-private partnerships. The firm, with five offices nationally, is headquartered in White Plains.

The board did not take West up on his offer to perform a study of Orangetown’s sewer operations for a fee of $19,500, but did listen to his comments and suggestions, and thanked him for his gratis appearance. He had been invited by Supervisor Andrew Stewart, the board’s only Democrat, because of his expertise in the subject area and familiarity with Rockland County, since he is also a consultant to the county sewer district and the county solid waste management authority among dozens of other municipal clients.

Republican board members seemed skeptical of West’s presentation, asking him numerous questions about his background and methodologies, and concluding their listening session by essentially telling him “don’t call us, we’ll call you.”

Proposal

For his fee, West said he and sewer engineer Michael Gritzuk would do an in-depth study of Orangetown’s current sewer operations, and make a series of recommendations to the Town Board on how they could be improved and the costs reduced.

Since he realized the Town Board majority was opposed to any consideration of consolidation with Rockland County, West said his study would concentrate on the areas of continued town operation, a joint public-private venture or privatization of the sewer system, with a detailed analysis of the pros and cons and cost estimates of each concept.

Specifically, West said the study would investigate:

• The evaluation of the current management and operation of the town’s wastewater collection and treatment system and its comparison with other similar system as well as industry standards to assess current performance, and
• The evaluation of the costs and benefits associated with private management of operation of its wastewater collection and treatment system.

West said the firm would use both attorneys and engineers to:

• Begin with kick-off meetings with town officials to review the scope of the study, gain an understanding of the system’s current operational and financial position and challenges and identify the town’s long-range utility objectives.
• Identify comparable wastewater facilities and relevant industry standards against which a comparison of Orangetown’s wastewater facilities can be conducted.
• Undertake a comprehensive assessment of the town’s wastewater facilities, considering numerous factors including but not limited to the results of team inspections, existing engineering reports, the most recent budget for the department, its current staffing plan, collective bargaining agreements, records regarding operational costs and procurement practices and other information provided by staff.
• Conduct a comparison of the wastewater system against the benchmarks of current industry standards and models of comparable other systems considering a variety of factors such as risk allocation, capital and operational cost and revenue analyses, legal and contractual factors and schedule concerns.
• Assess each option for future operation and management, including but not limited to operation and management by a private contractor of the wastewater system based upon the consideration of similar factors, and finally
• Prepare, submit and present a report of findings and recommendations.”

Local Credits

West said he and Gritzuk have performed similar studies and acted as consultants for Rockland, Nassau and Broome Counties, Ramapo Local Development Corporation; Towns of Ramapo, North Hempstead and Poughkeepsie and the cities of Binghamton and Johnson City, among dozens of other clients.

In some cases the municipalities decided they could cut costs themselves, based on the firm’s reports, West said. In others they joined with private firms to form public-private partnerships and in yet other cases they turned over their sewer systems to private ventures to operate.

He said one of their most successful ventures was in the nearby Town of Poughkeepsie, in Dutchess County, a township similar in size to Orangetown. There, town officials followed the firm’s recommendation and partnered with United Water – Suez to operate their municipal sewer system. West estimated the town reduced its sewer operating costs by about one-third through that partnership, under which United Water actually runs the system, using town employees.

While Town Board members appeared skeptical of West’s presentation Stewart hailed it as a breakthrough in long-stalled discussions over how to cut costs in the beleaguered sewer department.

“There is a high likelihood that Orangetown could derive substantial benefits from a public-private partnership for management of the wastewater treatment plant and collection system, as recent experience in Poughkeepsie and other places, and a review of literature on this suggests,” Stewart told the board in a four-page memo distributed last week.

Stewart’s Analysis

Stewart said a town-county-merger would probably increase Orangetown residents’ sewer charges, so he recommended that the Town Board obtain a study of the potential benefits of a public private partnership for private operation and maintenance of the sewer system.

Stewart then told the board he contacted numerous potential consultants and decided to invite West and his firm to make the initial presentation, based on his familiarity with the subject and experience in this geographical area.

Stewart said after speaking with West and other consultants and reviewing literature from the Internet, he was suggesting that Orangetown hire such a firm to study:

• Benchmark current operations for both the sewer processing plant and the collection system against similar municipal plants, privately run plants and the benefits and drawbacks of private versus municipal run operations;
• Benchmarks for comparisons including such factors as sludge processing capacity, the number of pump stations and miles of pipe, the average age of the systems, hours of operation, safety, maintenance, capital spending, water testing procedures, what gets measured and the number and amount of overflows;
• Delineating the items to be compared, including labor costs (staff, titles, salary, overtime, benefits, etc.), operation and maintenance of the plant including utilities, chemicals, uptime and DEC fines and finally “other questions,” such as labor-saving technologies, elimination of 24-hour operation, implementation of a “buddy system,” and time clock operation, cutting overtime costs, staffing needed, improvement in the “gas boy” security system and the potential for succession planning for licensed operator requirements, now set by the county and state.

West also submitted to the board a three-page list of specific advantages that could be achieved through a public-private partnership, if that is the course of action to be recommended after a thorough study is completed.

Board Reaction

Board members appeared diverse in their reaction to West’s proposal, some praising it and other seeming highly skeptical.

Stewart, who had invited him, defended the presentation and said he intended to put a resolution on next week’s business meeting agenda to hire his firm for the suggested fee of $19,500. He said he was particularly impressed with West’s work in Poughkeepsie, where he said the firm saved the town 25 to 30% of its sewer budget by recommending the public-private partnership with United Water. If he could do the same in Orangetown, it would save taxpayers millions of dollars, Stewart estimated, although he noted that he is “not a big fan of United Water,” having been an outspoken critic of the company’s proposoal for a desalination plant.

Paul Valentine of Blauvelt praised West’s report, and said he and other town officials had spoken at length with the Poughkeepsie supervisor, and came away feeling it was a good deal for that town, and may be for Orangetown as well. As a result, he said he was prepared to vote to hire West’s firm, and considered the cost to be “well worth it” if he can achieve similar results here.

Fellow Republican Denis Troy of Pearl River held an opposite view, however, saying he is “dead set against any public-private partnership” to run the sewer department or any other branch of town government, and would vote against hiring West or any other consultant for such a study.

He was joined by Councilman Thomas Morr, Pearl River, who said he saw no need to hire an outside firm for nearly $20,000, when Supervisor Stewart, his staff, and DEME head Morgan should be perfectly capable of conducting such a study themselves, in-house, at no cost to Orangetown.

No “Trust”

“I don’t trust you, I don’t,” Troy shouted at Stewart when he tried to defend West and explain why he invited him to appear. Troy also said he felt Stewart did not provide adequate notice to the council, which Stewart denied being the case.

Diviny supported Troy, saying he would never entertain partnering with United Water on anything, claiming all the company has done in Orangetown for the past half-century is to constantly raise the cost of water bills to local residents, without providing any better service.

Saying “I’ve done my homework on this (via the internet) and I’m not convinced” a public-private partnership will benefit anyone except the private partner, at taxpayer expense, Diviny said he spoke with other municipalities where their water bills alone skyrocketed from $200 per month to $800 per month when municipal drinking systems were taken over by private partnerships.

With a clear-cut division obvious on the Town Board, it was unclear at the meeting’s conclusion Tuesday whether or not Stewart would attempt to put the item back on the agenda for next week’s business meeting, where it appeared headed for a 3-2 defeat based on this week’s council comments.