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Some concerning statements were quoted in the front page OBSERVER article of Sept. 15, “District in red, open to talks with the city.” North County Water District Chairman Dan Pacos was quoted as saying that the NCWD has lost $150k in the fiscal year through August. Pacos was also quoted questioning SUNY Professor Peter Reinelt's formula for calculating the water rates that Dunkirk charges the NCWD and that are then up-charged to water customers. This is not the first time that Pacos has questioned Reinelt's calculations and cautioned that having a sole individual calculating water rates with a very difficult to understand formula is not a best practice for any municipality. Yet Pacos and the NCWD are contractually bound to accept Reinelt's water rates.
After Pacos refused to speak on camera at Fredonia's July water forum, I emailed him a copy of the late Jim Sedota's document that estimates that joining the NCWD will be $52 million more expensive over 30 years for Fredonians than simply upgrading Fredonia's dam, water treatment plant and reservoir. In our exchange of emails Pacos questioned and then disregarded Sedota's calculations because Pacos could not understand how Sedota arrived at the $52 million figure.
I know nothing of Peter Reinelt other than that he is a professor at SUNY Fredonia and that he seems to be the only individual who understands the formula that he uses to calculate the City of Dunkirk's water rates. I am sure that Reinelt is a well meaning individual but some serious questions need to be asked and answered.
How did Professor Reinelt get this position? What are Reinelt's areas of expertise? Is he being paid for his efforts? Does Reinelt have professional certification? Is he practicing as an engineer without a PE license? Does anyone verify his water rate calculations for accuracy? Who is held accountable if Reinelt underestimates or overestimates water rates? Can a simpler and easier to understand formula for calculating Dunkirk and NCWD water rates be derived? And finally, why are Pacos and so many other elected officials willing to accept Reinelt's figures that they admittedly do not understand but refuse to give credence to Sedota's numbers?
While I do not know Peter Reinelt's credentials, I am well aware of Jim Sedota's. Sedota had more than 30 years of experience as Fredonia's village administrator and voluminous expertise in municipal finance. It is widely known that Sedota often met with Fredonia's treasurer as he did research for his NCWD cost projections. And he presented and explained his figures to the mayor and at least two trustees.
I was never able to sit down with Jim Sedota and ask him about his calculations. After he passed away, I did have the opportunity to review his work. I provided copies of his summation to the OBSERVER, to Pacos, to Mayor Ferguson and to the sitting trustees at the time. I do have a pretty good idea where Sedota's figures came from. And I can make some simple calculations of my own using information collected while sitting through two LaBella engineering reports. At the second presentation I attended, a LaBella engineer clearly stated that it was more expensive for Fredonia to join the NCWD than to upgrade their current system but LaBella was recommending joining the NCWD for "non-financial reasons".
The same engineer also displayed a powerpoint slide that showed that the added expense to Fredonians for joining the NCWD would be $400 per household per year for 30 years.
$400 x 3,825 Fredonia households x 30 years = $45,900,000
In a curious omission, the LaBella reports never showed this calculation. Why do you suppose that is? And why the 30 year limit on the added expense? Will Fredonia households receive a $400 reduction in water costs after the three decades have past? When has any municipality ever lowered utility rates or taxes after an expensive project has been completed and paid for?
I do wish someone could produce compelling financial evidence that joining the NCWD is in the best interests of the village. If that had happened nearly three years ago, I would not be writing this column. If that evidence were produced now, I would gladly stand down and go away. All SOR members and I want is to see Fredonia thrive and grow. We want something here for future generations when we’re all gone. That includes having a functioning reservoir safe guarded by a redundant water supply provided by the city of Dunkirk and the NCWD.
The village already has contracts with the city and the NCWD to provide this redundancy by way of the interconnects on Vineyard Drive and Route 20. It continues to make no sense to me to decommission our reservoir, lose that redundancy and the village's water independence and pay the exorbitant extra costs involved with pumping water five miles uphill to an already existing water source in order to join the NCWD.
Supporters of this ill advised plan to join the NCWD will state that the LaBella report left out the cost of dredging the reservoir and other expenses. They make this claim without providing concrete evidence that the reservoir actually needs to be dredged and without providing any cost projections for the dredging or any other expenses missing from this project.
Claims of missing details in the LaBella reports do nothing to convince anyone that joining the NCWD is best for Fredonia. It simply makes one doubt LaBella's competence and doubt the judgement of elected officials for accepting an incomplete financial report. And unless the cost of the details missing from the LaBella reports come to more than my $45.9 million figure or Jim Sedota’s $52 million calculation, it would still be less expensive for Fredonia to upgrade our current water system than to join the NCWD.
Don't understand Reinelt's formula for calculating water rates? Can't follow Sedota's $52 million cost projections?
Take another look at these easy to understand numbers.
$400 x 3,825 Fredonia households x 30 years = $45,900,000
Imagine what village government could do with this money to improve the quality of life for Fredonians instead of spending it on an expensive and unnecessary water project.
Andrew Ludwig is a retired math teacher and a retired public school and Catholic school administrator. He currently works as a substitute teacher in Chautauqua County.