The problems outlined in this commentary with the County Pomfret Portland Dunkirk Sewer District (PPD Sewer District) have previously been brought before the Village Mayor and Board of Trustees, but needs repeating.

It’s important to reiterate those problems as nothing has been done by the Village Board to remove the 61% discount in the rate for sewer services provided by Fredonia to the PPD Sewer District, a Sewer District located outside of the Village. The 61% discount in the sewer rate to the PPD District from the established rate for Fredonia residents amounts to a Village subsidy and gift of services to the extent of the subsidy.

The Village subsidy to the PPD Sewer District grants to the PPD District a significantly reduced sewer rate ($3.10 per 1,000 gallons for the District vs $8 per 1,000 gallons for the Village residents). The $3.10 rate per 1,000 is a 61% discount from the Village established sewer rate of $8 per thousand gallons. The loss of income from the PPD Sewer District caused by the District’s reduced rate must be paid by the Village residents in order for the Village to pay for all expenses associated with the Village waste water treatment plant.

The subsidy (61% reduced rate) to the County PPD Sewer District for Village services provided by Fredonia’s Waste Water Treatment Plant (WWTP) will result in a significant loss of income to the Village. Based on the last quarterly billing to the PPD Sewer District, over the next 5 year period the Village will lose at least $654,800.00 in income due to the reduced rate of $3.10 per thousand gallons of waste water charged to the District under the current agreement. It bears repeating that the PPD Sewer District rate ($3.10 per 1000 thousand gallons) is significantly less than the Village rate charged to Fredonia residents which is currently $8.00 per thousand gallons. The quarterly billing this past June to the PPD District showed that 6,654,920 gallons of waste water from the PPD Sewer District was treated at the Fredonia WWTP.

All other outside Districts served by the Village pay the Village at least the same rate as charged to Village residents or  pay a premium such as 1.2 times the Village rate or pay at the highest rate charged to Village residents. There were no complaints. It’s very common practice in municipalities to charge outside Districts a higher rate than the selling municipality. The Village is also entitled to receive a reasonable return on its investment. I don’t believe there are any water or sewer districts that pay less than the residents of the selling municipality.

The sewer rate of $8 per 1,000 gallons of waste water was established by resolution of the Board of Trustees in June of last year after a public hearing. The rate of $8.00 per 10000 gallons was determined by the Village Board as a necessary rate to pay for all the operation and maintenance expenses and capital costs of the Fredonia WWTP.

The Village needs to be paid a fair and adequate consideration for the services provided to any outside of Village customer and not less than the Village rate. The law also permits a municipality to sell its services to non-resident customers at a higher rate than charge to its residents.  If there is a subsidy to be given to the PPD Sewer District, it should be paid by the County, not the Village. The PPD Sewer District is part of the County, not the Village.

To make matters worse for the Village, according to the contract between the PPD District and the Village, the District’s reduced rate of $3.10 per 1000 gallons is fixed and can only be “evaluated” every five years during the 30 year term of the contract. There is no language in the PPD Sewer agreement that gives the Village the right to increase rates annually or whenever the Village Board determines it’s necessary to do so.

On the other hand, the rate charged to Village residents ($8.00 per 1000 gallons) is not fixed and is subject to annual increases by the Village Board. There is no reason to exempt the PPD Sewer District from periodic Village increases in sewer rates which are attributable to increased costs to the Village or to prohibit the Village from charging a premium to an outside user of Village services which is permitted by law.  The Village needs clear language in the agreement to allow the Village the right to increase sewer rates whenever the Village Board determines a rate increase is necessary. Such language is not included in the PPD Sewer agreement.

Also, this month the State of New York (Lake Erie State Park) was allowed by the Village Board to connect to the PPD Sewer District. The charge to the State of New York by Fredonia will also be 61% less than charged to Fredonia residents. This results in Village residents subsidizing the State of New York via the reduced Village sewer rate to the PPD Sewer District.

In addition, the contract provides that the County Legislature’s approval is required for any rate increases. Approving rate increases is solely a Fredonia Board of Trustees function as it has the information to know what is needed to pay for the WWTP expenses. Those expenses include capital costs, debt service and operation and maintenance costs of treating all waste water, including treating infiltration water that enters the Village waste water treatment plant. All those expenses must be paid by the Village. The Village should also have the right to charge a premium as permitted by law.  

With the recent 54% increase in Village taxes and with future Village spending already in progress and with the unknown and undisclosed financial impact of new fire and police contracts, the loss of a large amount of income from the PPD Sewer District will create additional financial stress and hardship on the Village and its residents.

There needs to be a discussion by the Village Board as soon as possible leading to corrections to the agreement and elimination of the subsidy and clear authority by the Village Board to change rates whenever the Board determines a change is needed. Even though there is a signed contract, the contract can be amended to correct the injustice to Village residents and still be fair to the County PPD Sewer District.

The Mayor and Village Trustees serve in a fiduciary capacity to act in the best interest of the taxpayers and residents of the Village and to manage Village property and finances responsibly. They are obligated to correct injustices or mistakes, especially those involving Village property and funds. The PPD Sewer District agreement does an obvious disservice to the Village and its residents. Corrective action is needed by the Village Board as soon as possible.

So far, however, the Village Board has refused any corrective measures. This needs to change as soon as possible by the Mayor and Village Board reviewing and discussing the PPD Sewer agreement and taking action to correct the agreement.

The corrections to the agreement need to include repealing the subsidy, giving the Village Board of Trustees clear authority to set and increase rates whenever they determine necessary to do so and to make such other changes as may be in the best interest of the Village of Fredonia, its residents and the proper operation of the Fredonia Waste Water Treatment Plant, while at the same time providing a needed service to the residents within the PPD Sewer District.

Sam Drayo Jr. is a Fredonia resident and previously served as the village attorney.