OLEAN
Olean OKs plan to change water meters, adopt new code
OLEAN — The Olean Common Council voted, 6-1, Tuesday to amend its water and sewer code, transferring ownership of residents’ water meters to the city in preparation for free replacement of about 6,500 devices.
The new water meters will be read electronically from radio equipment in towers that will be placed atop the Community Bank building on North Union Street and on Stardust Lane, a high elevation in the northern section of the city.
The code change also revises water metering from a cubic foot to a per-gallon measurement, with the upgrades eliminating some labor costs and increasing revenues by making every meter accessible.
Local plumbers will be hired to change the meters, with the entire project costing an estimated $2.3 million, guaranteed by the contractor, Wendel Energy. The cost will be fully recovered with increased revenues in five years.
Before the vote, Scott F. Smith, general manager of Wendel Energy, fielded questions from the aldermen and residents. He said that once the project is completed, the city stands to receive $764,000 in additional revenue and savings for just over seven years.
Alderwoman Linda Edstrom questioned how the project, now part of a proposed $5.6 million municipal lease financing deal that will be presented to the Council sometime in the future, will be paid for without a bond.
Smith said the municipal lease is a “different financing vehicle” that is not much different than a car lease, with banks submitting competitive proposals for low-rate financing of the equipment. The interest rate then will be lowered using the New York State Energy and Research Development Authority’s Smart Loan grant program. The $5.6 million municipal lease will have to be approved by the Common Council.
He said the project will bring the city more money than is needed to pay back the $2.3 million cost, so the funds could be used to pay for other projects. Rolled into the lease will be the cost of the new meters, along with a list of other projects such as pump replacements and upgrades at the fire hall and the municipal building.
Resident Ernie Kallenbach told the aldermen that he hopes they understand how the contract works and also questioned Smith about the terms of the financing arrangement. He told them that surplus should not be used to fund other costs and to pay the city’s operating expenses.
But Smith responded that the water and sewer funds are self-funded, and the revenues will stay within those funds.
In answer to another question, Smith said the per-gallon metering will not increase the cost of water service and also explained that the two towers are a more efficient meter-reading method than installing electronic equipment in a vehicle, due to the city’s dense population.
Edstrom commented that the municipal lease financing is still borrowing money and said that she might vote no when the time comes to approve it.
“I like it that the meters will bring us into the 21st century,” said Edstrom, expressing her support for the upgrade. But she added, “I’m just very concerned that’s another $5.6 million on top of it.”
Alderman Ray Wangelin voted against changing the code and said he doesn’t favor financing the project for $5.6 million.
“I think it’s foolish to spend $5.6 million — on things that could wait” at a time when the city needs street repairs and other things, he said.
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