Ripple effects

Some dramatic cuts in revenues flowing into Fredonia’s two water plants will come to fruition after Carriage House, the village’s largest private employer, closes and eliminates about 425 jobs by next February.About 45.5 percent of the Fredonia wastewater treatment plant’s revenues come from facilities at Carriage House, while 24 percent of the Fredonia Water Filtration Plant’s revenues come from there, according to Village Administrator Richard St. George.

“(WWTP Chief Operator Betsy Sly), just off the top of her head, thought Carriage House is almost 75 percent of the loading in that plant,” he said. “So, when you all of the sudden have 75 percent of your loading gone out of the plant, that isn’t good.”

“There’s no way we can increase water and sewer tax rates to make up that huge of a difference,” Trustee Joseph Cerrie said regarding the chunk of revenues associated with Carriage House.

That means the village board and department heads must look at cutting the proposed 2014-2015 budget to offset the losses. Reductions in staffing and materials costs are already being determined at the wastewater treatment plant by Sly.

“Along with the loss of revenue from the closing of Carriage House comes a significant reduction in the loading, biological oxygen demand and total suspended solids in wastewater at the WWTP,” she said in an email. “A preliminary budget evaluation has determined that chemical costs and landfill tipping fees could be reduced in the budget by an estimate of 31 percent and 34 percent, respectively. These values are difficult to estimate since the schedule of department closings at Carriage House is unknown at this time. Electrical usage will be lowered somewhat with the decrease in waste sludge processing and aeration requirements.”

The trustees are currently in the process of reviewing and reorganizing the overall budget and will meet Monday at 5:30 p.m. for a budget workshop.

Mayor Stephen Keefe said the plant’s closure will have a huge impact on business as usual for the village.

“Carriage House will have an impact on everything we do here,” he said, adding the wastewater treatment plant turns waste from the business into bio-energy. “Both the WWTP and the filtration plant rely heavily on the business.”

The village also recently authorized, subject to permissive referendum, the negotiations for a $3 million serial bond for energy efficiency improvements at the wastewater treatment plant. The intention was to make needed upgrades to the plant and have efficiencies realized from the project pay for themselves, thus causing no impact on taxes.

That plan, as it stands, is now scrapped.

As a result of Carriage House’s closure, the village is not looking to negotiate the bond’s procurement, according to Cerrie.

“If you’re losing 45.5 percent of revenue generated from the WWTP, the bonding attorneys … are going to say, ‘OK, how are you paying for this?'” he said. “The resolution we passed just means Rick (St. George) can search for a bond. That’s not going anywhere right now.”

“Our energy performance contract project … is based on the production of Carriage House,” Keefe said. “That’s a huge investment, so if they’re not going to be in operation, are we going to net the savings projected?”

St. George said he believes all the engineering work done prior to Carriage House’s announcement is now “down the tubes.”

“The project is most likely going to change in scope,” he added. “We’ve got to take a better look at it now and say, ‘OK, instead of putting in this size blower, you’ll have to put in a smaller blower,’ or, ‘Instead of putting in this equipment, you’re going to not put in any because what’s already there is good enough.'”

Sly confirmed St. George’s remarks by adding she already started cutting capital projects “to the minimum.”

ConAgra Foods, Carriage House’s owner, announced the Fredonia plant’s imminent closure this past week. Workers will begin being phased out in late summer or early fall. By February 2015, the plant is expected to be closed.

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