The Carmel Town Board has taken a major step forward in a long-planned overhaul of Water District No. 2, unanimously approving a bond resolution authorizing up to $12.9 million for construction of a new water filtration plant — less than half the cost town officials once feared the project could reach.
Following a public hearing June 3, the board approved both a public interest order and a bond resolution authorizing the town to borrow up to $12,911,963 for the project, which will be built on town-owned property along Brewster Road.
The filtration plant is the centerpiece of a broader effort to modernize Water District No. 2, which serves much of Carmel Hamlet and the town’s primary commercial corridor. The district draws water from Lake Gleneida and supplies homes, businesses and public facilities through an extensive network of treatment, storage and distribution infrastructure.
Town officials and representatives from Delaware Engineering told residents that the latest cost estimate reflects years of work to reduce the project's price tag while still addressing critical infrastructure needs.
“We started at $28 million. We’re down to $12.9,” Town Engineer Rich Franzetti said during the hearing. “Everyone up here is doing everything we can to make sure that we deliver an affordable project.”
The proposed work includes the construction of a new filtration plant, installation of modern treatment equipment, pumps, controls, piping, and related infrastructure. The project also includes demolition of the existing treatment facility and associated site work.
Town officials have said the current plant is aging and increasingly difficult to maintain. Much of the infrastructure has been in service for decades, and the replacement facility is intended to improve reliability, efficiency and compliance with modern drinking-water standards.
The treatment plant project is one component of a larger improvement program that has included replacement of aging water mains and upgrades to storage facilities throughout the district. Officials have described the overall initiative as a long-term investment designed to improve service reliability and strengthen the system for future growth.
Questions during the public hearing focused largely on demolition of the existing plant and potential environmental concerns.
Representatives from Delaware Engineering said asbestos-containing materials and lead-based paint have been identified in the building. Before demolition can occur, asbestos would need to be properly abated, the engineers said.
Councilman Rob Kearns asked whether the county might be able to assist with demolition efforts as part of a training exercise. Engineers said the town is still evaluating the most cost-effective approach and must first determine how environmental issues will be addressed.
“We’re trying to get a good handle on the cost,” a Delaware Engineering representative said, explaining that officials are comparing options for separate asbestos abatement versus demolishing the structure and disposing of the material as regulated waste.
Hamlet resident Rosemary Gephardt asked whether demolition costs were included in the project estimate and whether residents could face additional expenses later.
Franzetti said the proposed $12.9 million budget covers the entire project, including demolition, construction and contingency funding for unforeseen conditions.
“Delaware Engineering believes that this number is a safe number,” he said. “It’s built to cover unforeseen conditions that we might come across.”
If the town can reduce demolition costs or secure outside assistance, those savings would lower overall project expenses, officials said.
The hearing also highlighted ongoing efforts to secure grants and low-cost financing that could significantly reduce the amount ultimately borne by district residents.
Town officials said they previously completed an income survey and have applied for funding through New York State’s Water Infrastructure Improvement Act (WIIA) program. The town also has received federal assistance through grants secured with the support of U.S. Rep. Mike Lawler.
A grants manager from Delaware Engineering said the town plans to pursue another round of state funding and could be eligible for as much as $5 million in grant assistance.
In addition, the district may qualify for zero percent-interest financing through state environmental infrastructure programs, potentially saving taxpayers substantial borrowing costs over the life of the project.
One of the reasons why the application didn’t make it through last time was because the bond resolution wasn’t for the entire amount, town officials said. It is one of the main reasons why they are using this process.
Officials said obtaining approval for the full project cost strengthens the town’s position when applying for future grants.
The board’s resolutions formally determined that the project is necessary and in the public interest and authorized issuance of up to $12.9 million in bonds to finance the work. Under state law, the bonds could be financed over a period of up to 40 years.
The approval marks a significant milestone for a project that has undergone multiple revisions as officials worked to balance infrastructure needs with affordability concerns.
Earlier estimates for replacing the filtration plant climbed dramatically as construction costs increased, at one point reaching roughly $28 million. Concern over the potential impact on water rates, and district taxpayers prompted town officials to revisit the project, scale back certain elements and aggressively pursue outside funding opportunities.
With the bond authorization now in place, the town can move forward with final financing arrangements, grant applications, and continued project development.
If additional state aid is secured, officials say the ultimate cost to Water District No. 2 customers could be substantially less than the amount authorized by the board.
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