Niagara Bottling deal could help fund water system fixes, but is it too risky?

Cooper Lake. (Photo: Dion Ogust)

Cooper Lake. (Photo: Dion Ogust)

Backers of a proposal to sell City of Kingston water to a national bottling company say revenue from the deal could allow the city to replace and upgrade its century old infrastructure — without passing the costs on to residents.

But the plan is already a flop with some in the community, who call it a risky bet with a precious commodity.

The proposal by California-based Niagara Bottling calls for the construction of a sprawling bottling and shipping facility on a 57-acre parcel in the Town of Ulster once owned by IBM. The plant — if and when it’s running at full capacity — would use up to 1.75 million gallons of City of Kingston water each day. The water would be piped in from Cooper Lake using a water main that once serviced the massive, now largely vacant, IBM plant. Niagara has said it may also need to construct a second water line running parallel to the existing system using existing easements in Kingston and the Town of Ulster.


In an interview this week, Kingston Water Department Superintendent Judith Hansen said that Niagara first approached the department, which has broad authority to operate independently, back in April. The inquiry spurred a round of what Hansen called “due diligence” by consultants working with the department to see if the project was feasible, given the city water system’s capacity. Kingston’s water supply originates in Woodstock where Mink Hollow feeds into the man-made Cooper Lake. The water is then piped to a filtering facility on Sawkill Road and onto a holding reservoir where it undergoes a round of ultraviolet purification before entering the city’s water mains.

Hansen said the system can provide up to 6 million gallons of water a day. Currently the system provides a little less than 4 million gallons a day to city residents and the Town of Ulster; a fifth of those 4 million gallons is lost due to leaks in the century-plus-old infrastructure. (Hansen said the department planned to undertake a leakage remediation program next year.)

Hansen added that while the company had requested a maximum capacity of 1.75 million gallons a day, “for their own corporate reasons” actual daily usage would probably be closer to 1 million gallons daily.

Based on the analysis provided by consultants, the Board of Water Commissioners authorized a “will share” letter. The letter indicates that the city is capable of providing the requested water, providing certain conditions are met and current customers not adversely impacted. It is unclear when the five-member board discussed the letter. The Niagara proposal is mentioned in the minutes of an April meeting of the five-member board, but not subsequently.

The proposal did not come to widespread public attention until last month, when an engineer working for Niagara presented the proposal to the Town of Ulster Planning Board. The presentation was the first step in a state-mandated environmental review that will assess and seek to mitigate potential adverse impacts of the plan.

Not yet committed

Hansen noted that the “will serve” letter does not bind the city to any agreement with the bottling firm or establish what Niagara would pay for the water service. The Town of Ulster pays $2.88 per 1,000 gallons for up to 700,000 gallons each day. But Hansen said Niagara would be charged at a higher, but yet to be determined, rate.

“Providing drinking water to your neighbors is a little different from providing it to a commercial account,” said Hansen.

Mayor Shayne Gallo, who appoints water commissioners and serves as a voting member of the board, has expressed support for the proposal and sought to allay residents’ concerns. Gallo said that the deal would significantly boost the water department’s $4.1 million annual budget. That boost, in turn, would help fund replacement of underground pipes — some of which date to the early 20th century — without raising rates for city residents. Currently the department is undertaking $5 million worth of repairs and upgrades. Another $16 million, Hansen said, of repairs are planned over the next few years. Most of the funding for the projects comes from municipal bonds issued by the department.

“[The Niagara deal] will allow them to stabilize water user fees and at the same time reduce the need to bond for repairs,” said Gallo.

Gallo said he’s asked Hansen to provide a copy of the analysis that is the basis for the “will share” letter and other information to the city’s Conservation Advisory Council. Gallo added that any deal with Niagara would require current customers to receive priority over the bottling concern in the event of a drought or other water emergency.

Flow can be restricted

Current protocols already allow the department to restrict water use by commercial customers in drought situations; Gallo said that any deal with Niagara would include provisions to ensure that existing residents and businesses receive priority for service.

There are 2 comments

  1. Jorge Nelson

    This is a terrible idea. Reservoir water is for community not a corporate giant to profit from for a quick fix of a monetary nature. They are known to take and take and run aquifers dry and end up suing small towns and cities until they settle to end a battle they can’t win. This company will run Cooper Lake dry and dump chemicals from their plant and end up costing the city of Kingston far more in the end. Water is the war ahead of us folks and it’s starting in our own backyards!

  2. Rainier Parade

    The Kingston water board might have the authority to make this decision unilaterally. But it shouldn’t. This issue should only be decided by the voters in the form of a referendum, one that would give both sides enough time to campaign vigorously so the public can make an informed decision.

    This company wants the rights to bottle more than a quarter of the City of Kingston’s water resources. That’s 1.75 million gallons per day from a system that produces about six million gallons. This is a huge percentage of our water.

    And the strikes against this proposal are numerous. What if climate change has an impact on the watershed, and in turn we see a 30 percent decrease in daily production? We could suddenly have a very serious water crisis on our hands if this deal were to go through. And the U.S currently consumes about 50 billion plastic bottles annually, which is the equivalent of 17 million barrels of oil. Adding more to this waste stream — of which less than 25 percent is currently recycled — is simply crazy.

    If we want to upgrade our water system, let’s do it the proper way — by securing bonds, which can be obtained at interest rates that are lower than the current rate of inflation — and not by giving away a precious resource that may not be here tomorrow.

    And I hate to sound like a broken record, but the best thing we can do to ensure a good future for our fair city, whether we are talking about water or anything else, is to get rid of the incompetent, indifferent, and ill-informed Shayne Gallo as our mayor.

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