Saratoga Water Agencies Should Combine, N.Y. Office Says

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The Authorities Budget Office, an independent office that aims to make public authorities in New York more accountable and transparent, is recommending that Saratoga County’s three public water authorities be replaced by a single agency.

The county currently has three separate authorities that operate its water systems: the Saratoga County Water Authority, the Clifton Park Water Authority and the Wilton Water and Sewer Authority.

“Our review found that the three existing authorities could be dissolved and the operations combined and consolidated in a single public authority that provides water to the same population that is currently served,” the ABO said in a report this week.

The office said that potential benefits would be improved efficiencies through a combined staff, coordinated purchasing of common items, and reduced administrative costs now associated with operating three separate authorities.

The review estimated up to $60,000 in annual savings by combining staff, and up to $10,000 in savings by consolidating purchases of water treatment chemicals.

The SCWA employs nine full-time staff, the CPWA employs 19 full-time staff and the WWSA employs three full-time staffers and two part-time employees.

The office said that minimal, if any, adjustments to permanent staffing levels would be required to achieve the consolidation and assure the effective operations of an integrated system.

Any action to consolidate the authorities would require state legislation, which would also address how the agencies’ outstanding debt would be retired or refinanced.

All three authorities have combined debt outstanding of about $70 million as of December 2011.

Saratoga County is located in the upper Hudson Valley in New York and has a population of around 220,000. On Wednesday, its general obligation bond rating was lowered to AA from AA-plus based on weakening finances.

“The downgrade is due to structurally unbalanced operations that have resulted in consecutive general-fund drawdowns and diminished financial flexibility,” Standard & Poor’s said in a report.

The agency assigned a negative outlook based on implementation risk associated with the budget-balancing solutions that management has identified.

The downgrade comes ahead of a $3 million sale of public improvement bonds that are expected to refund certain maturities of the county’s Series 2002 public improvement bonds.

In another New York county, Dynegy Holdings Corp. announced that it has filed a lawsuit to lower the tax assessments of two power plants.

Dynegy is Orange County’s largest property taxpayer and is seeking to reduce the power plants’ assessed valuation to $25 million from $281 million, a 91% decrease.

“A successful appeal of the county’s tax assessment would be credit-negative because the reduction would result in an annual loss of future property taxes totaling $2.3 million to the county,” Moody’s Investors Service said in a report.

Moody’s compares the lawsuit to the decade-long assessment appeal by the Mirant Corp. against Rockland County, in which the county and its various municipalities agreed to reimburse Mirant for $163.3 million of taxes paid over the previous decade.

The settlement was burdensome to the municipalities as their budget deficits widened and debt load increased.

“Although we expect the potential payments by Orange County to be significantly less than Rockland’s, they could be material enough to strain the county’s cash position and general fund budget,” the report said.

Orange County is currently rated Aaa by Moody’s.

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