The bad news is that Riverhead Town still hasn’t received the $575,400 it’s expecting from Suffolk County to help prevent a looming 236 percent increase in Riverhead Sewer District costs. The cost increase is the result of a state- and federally mandated $24 million upgrade to the town sewer plant, which discharges into Peconic Bay.
The town also hasn’t received $750,000 it expected from Hecate Energy, which was going to lease at least 60 acres of land from the town at the Enterprise Park in Calverton for a solar energy farm.
Lastly, the town also hasn’t received another $613,400 from the county it had budgeted last year to offset costs associated with its landfill. Those funds are no longer expected.
The good news, however, is that the town’s overall debt has dropped by 31 percent since 2011 and its total debt for 2015 was the lowest since 2004.
That’s all according to town’s annual financial update reports, completed by town finance administrator Bill Rothaar. The 2015 report was released just last week.
Beyond the financial report, though, more grim news remains. With an August deadline for the sewer plant upgrade approaching — passing a previous deadline of January 2014 — the town will have to start borrowing money once again.
Riverhead Supervisor Sean Walter last week described the fact that the town lost only about $300,000 in 2015, rather than $1.3 million it anticipated, as good news.
“We were behind last year by $1.3 million in revenues,” the supervisor said. “We made up $1 million. I’m shocked.”
But in late 2014, some fellow board members did not favor the 2015 budget in part because of unrealistic revenue projections. Nonetheless, the $1.3 million the town didn’t get last year from Hecate and Suffolk County was still included in the 2015 budget. In fact, those anticipated revenues were included in the 2016 budget as well.
Aside from the $1.3 million loss the town took by not receiving the Hecate and county funds, the town actually came in $450,000 ahead of projected revenue for 2015.
According to Mr. Rothaar, the town saw 2015 revenue increases in E-911 aid, rental application fees, Cablevision franchise fees, Planning Board fees, mortgage tax and alarm fees.
The town also spent about $700,000 less than expected, according to Mr. Rothaar. This included savings of about $100,000 on gasoline, $70,000 in landfill repair and maintenance costs, $45,000 in electricity costs and about $500,000 in insurance claims, he said.
The town’s 2015 financial update places overall town debt — a figure that includes all town spending, including special districts like the water and sewer districts — at $92.8 million, down from the total 2014 debt of $102.7 million.
Since 2011, the town’s total town debt has dropped 30 percent from $134,016,100 to the $92.8 million, which is the lowest number since 2004, when total town debt was at $87.4 million.
Officials learned that the $613,400 in county drinking water protection money wasn’t coming before 2015 even began. While the Hecate Energy rent was anticipated as a major revenue source for the town, that project has yet to even start.
A spokesperson for PSEG Long Island told the News-Review this week that the Hecate project at EPCAL is still active.
However, Mr. Walter said, “it’s not active to me. If they don’t sign a check and pay us this year, they’re done.”
Hecate’s EPCAL proposal was selected by the LIPA board in December 2014, along with several other solar projects countywide.
At the time, Mr. Walter responded to that revenue potential by saying, “Our ship has come in. We’re in very good shape.”
Last week, though, the supervisor said the town has already suggested EPCAL in response to a new request for renewable energy proposals from LIPA/PSEG and is prepared to select another contractor.
Officials from Hecate did not respond this week to an email seeking comment.
As for helping to offset the cost of a required upgrade to the town’s sewer plant, Mr. Walter plans to continue lobbying the county to grant the town nearly $600,000 from its sewer stabilization fund to help taxpayers.
The sewer stabilization program is a part of the voter-approved quarter-percent sales tax, which is used for land preservation and other environmental programs. Under the program, if a municipality is seeing increases of more than 3 percent per year in sewer costs, it qualifies for the fund, which would pay the cost of anything over 3 percent.
“We believe we are entitled to that money,” Mr. Walter said, adding that the Town Board will formally petition the county for the sewer rate stabilization funds.
“No one has ever told me ‘no way,’ but I’ve not gotten a ‘yes’ or a ‘yes and this is how you can do it’ either,” county Legislator Al Krupski (D-Cutchogue) told Mr. Walter at last Thursday’s Town Board work session, when the stabilization fund came up. “I can’t promise you anything.”
Mr. Walter said he’s been talking to county officials about the sewer stabilization funds for two years.
Suffolk County Executive Steve Bellone issued the following statement in response to a question from the News-Review: “The county is very supportive of Riverhead’s efforts and has already saved Riverhead ratepayers one-third of the cost of the plant upgrade with an $8 million grant from its Sewer Infrastructure Fund. We are waiting for additional information from the supervisor regarding his request, and look forward to continuing the county’s financial support of the town’s efforts to improve water quality.”
Back in 2014, officials from H2M, the consulting engineers to the town’s sewer district, said sewer rates would increase by about 350 percent without the stabilization funds. At that point, the Town Board authorized borrowing almost $9 million to cover the cost of the upgrade.
The sewer district — with an annual budget of about $4.3 million — covers parts of commercial areas in downtown Riverhead, Route 58 and some residential areas in between. According to the town website, ratepayers are levied $92 per thousand gallons of water. A 236 percent increase would raise rates to more than $215 per thousand gallons.
Mr. Rothaar said this week that the increase without the stabilization fund would now be closer to 236 percent, because the town has received $8 million in county grants and $2 million in state grants toward the sewer upgrade project. The sewer district also has $4 million in reserves.
A 3 percent increase in sewer costs would amount to an additional $23 per year for someone whose property is assessed at $50,000, an engineer hired by the town told the Town Board in 2014.
So while Riverhead’s debt is the lowest it’s been in over a decade, Mr. Rothaar said overall debt is likely to increase in 2016 and 2017 as a result of the sewer plant upgrade. Any borrowing would be paid back solely by property owners within the sewer district.
Photo Caption: A financial report shows that last year, Riverhead Town’s debt was the lowest it’s been since 2004. But the town is expected to borrow later this year and possibly next year as it works on a $24 million upgrade of its sewer plant. (Credit: Paul Squire, file)