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Board Statement

FOR IMMEDIATE RELEASE:  December 22, 2015 @ 4:20 p.m. EST

State Audit Finds Binghamton-Johnson City
Joint Sewage Treatment Plant Costs
Lowest of Storm-Damaged Plants Surveyed

    Vestal, NY (December 22, 2015)  –  The Binghamton-Johnson City Joint Sewage Board (“Sewage Board”) notes that a newly-released audit by the State Comptroller’s Office finds that during the 36-month period ending December 31, 2014 the Binghamton-Johnson City Joint Sewage Treatment Plant (“JSTP”) had the lowest operating costs per million gallons per day (“MGD”) of wastewater treated of three storm-damaged plants it surveyed in New York State.  The audit report (“Report”), including the Sewage Board’s response letter (on pages 8-23 of the Report), can be accessed here

    Additionally, following more than 393 hours of records examination at the JSTP by state auditors, as well as additional time spent at other locations (such as the office of the Binghamton Comptroller, who serves as the Sewage Board’s Fiscal Officer), the Report does not take exception to a single financial transaction (including bank deposits, procurement, payments or payroll transactions) during the audit period, nor does the Report state any findings or concerns that public funds were not properly accounted for, or that there were any items of missing or misused property. 

    Nevertheless, the Sewage Board strongly disagrees with the opinion expressed in the Report that the “Owners [City of Binghamton and Village of Johnson City] and [Sewage] Board are not economically providing services to their customers” because:

●  The state auditors focused only on costs without also accounting for corresponding revenues from non-ratepayer sources that offset the costs.  As detailed in the Sewage Board’s response on pages 13-14 of the Report, had offsetting revenues been taken into account (such as insurance, FEMA reimbursements, and grants), the resulting net $124,655.57 cost per MGD treated would stand as the lowest unit cost of all facilities included in Figures 1 and 2 in the Report.

●  The state auditors did not take into account that the federal government has an established methodology for comparing residential financial impact of annual sewer/sewage treatment costs (whereas New York State has no such standards).  Under the federal methodology, as of the end of 2014 two of the JSTP’s Municipal Users were in the “low” residential financial impact category; seven were “mid-range”; and only one was in the “high” residential financial impact category.  (See, pages 2-3 of BJC Municipal Sewer Rates for further details).

●  The state audit team did not have knowledgeable personnel (for example, why else would the JSTP Superintendent have been asked for technical assistance in drafting the survey of other wastewater plants?).  As a result, the “comparable” plants selected by the audit team do not provide fair comparisons.  The JSTP Superintendent told state auditors that there was probably no plant comparable to the JSTP given the more stringent requirements imposed on the JSTP by New York State, the damage sustained by the JSTP in 2011, as well as the fact that the JSTP is located in the heavily-regulated Chesapeake Bay Watershed.

    Although the Superintendent and Sewage Board Chairman may have acknowledged the criteria the state audit team said it used to select its comparables, in no way did their acknowledgement constitute an agreement with the state audit team’s selection of comparables.

●  Despite the large investment of time by state auditor personnel, only “obvious conclusions” are stated in the Report:

► There are presently higher ongoing professional services costs for engineering design, construction management, inspection, and flood recovery consultant services.  These costs are required under present circumstances to restore the JSTP to full operation, to meet current state consent order requirements as well as to comply with current codes and standards not in effect when the JSTP was originally constructed or most-recently upgraded.

► There are presently higher ongoing chemical costs for the wastewater treatment and disinfection processes.  These costs are required to max-imize wastewater treatment given flood-damaged processes presently off-line as well as to meet current state consent order requirements.

► There are presently higher ongoing legal services costs, which the Sewage Board believes are being incurred for the benefit of the Owners and ratepayers in order to seek maximum recovery from the parties responsible for conditions and defects which came to light upon the May 16, 2011 collapse of a portion of the West C-Cell at the JSTP.

    Owner personnel, the Sewage Board and its employees are working diligently every day to operate and restore the JSTP in the most cost effective way possible under the circumstances to carry-out the JSTP’s environmental protection mission on behalf of our community.  This includes best-value procurement and actively pursuing grant funding and cost recoveries from all available non-ratepayer sources.

    The JSTP serves the City of Binghamton, Village of Johnson City, Binghamton University, the Village of Port Dickinson, and portions of the Towns of Vestal, Kirkwood, Dickinson, Union, Binghamton, Conklin, Fenton, and several homes in the Town of Chenango connected via the Town of Union.  The JSTP is co-owned by the City of Binghamton and Village of Johnson City and serves our communities by helping meet our region’s collective responsibility to protect and maintain the Susquehanna River at its designated Class “A” waterway quality for local use and enjoyment as well as for the welfare of the 444-mile long Chesapeake Bay Watershed as a whole.  As much as 9.2 billion gallons of raw sewage influent are processed through the JSTP annually, with an average flow of approximately 18.5 million gallons per day during the most recent five-year period.  Daily JSTP flows range from just over 10 million gallons on a “dry day” up to 60 million gallons on extreme wet weather days.

SOURCE:  Binghamton-Johnson City Joint Sewage Board