Riverhead Town is giving back $2.5 million in state grants for the reconstruction and improvement of the Calverton Sewer District, saying the grants don’t cover enough of the project costs and would create too great a tax burden on businesses in Enterprise Park at Calverton.
The town had been approved for the grants from the Peconic Estuary Program to upgrade the old sewer plant that was in operation when Grumman Corporation operated at the site. But the total cost of the project is estimated at $6.5 million, which means the remaining $4 million would have to be paid by the businesses within the Calverton Sewer District, which already pay extremely high sewer taxes. Town officials say the bonded indebtedness on a $4 million borrowing would lead to a 1,300 percent increase in the Calverton Sewer District tax.
“We have to give back $2.5 million back to the state because it’s going to cost over $6 million to do the upgrade,” said Riverhead Councilman John Dunleavy. “We have only 15 customers in the Calverton Sewer District. It’s going to put them out of business with trying to collect $4 million from them. So it’s better for us to give back the money to the state than have the state take the money back from us.”
The Town Board on Tuesday voted to reapply for the $2.5 million when additional grants or financing for the project become available.