By Niko Balkaran
Newburgh is preparing to move forward with construction of a major sewer facility as the project’s cost continues to rise and officials work to reduce untreated sewage entering the Hudson River during heavy rain.
The City Council voted Monday to increase the maximum cost of the Combined Sewer Control Facility to $60.5 million, nearly $25 million more than the $35.5 million authorized in 2022. The city previously raised the authorization to $44.9 million in 2024. The project’s financing includes a Bipartisan Infrastructure Law grant of up to $17.7 million and a Water Infrastructure Improvement Act grant of up to $8.88 million.
“Now because the project is at 100% design and it is out for bid, we know the costs,” said Interim City Manager Jason Morris. “Now we have to amend the bond resolution that was previously passed to go after those grants to capture the full costs known today.”
The facility will be built next to the city’s wastewater treatment plant near the Hudson River and will provide treatment and storage for combined sewage during wet-weather events such as periods of rain and snowfall. The project is part of Newburgh’s long-term control plan for addressing combined sewer overflows, according to city documents.
The largest portion of the project is the general construction contract, with D.A. Collins Construction Company submitting the lowest of three bids at $44.59 million. The low bid was about $8.9 million higher than the $35.7 million general construction estimate Arcadis, an engineering and design company, prepared when the project’s design was completed in May 2024.
In an Aug. 31 letter recommending the contract award, Arcadis said construction material costs in the Mid-Hudson Valley had increased by an average of about 8.5% in the roughly two years since the estimate was prepared. The engineering firm also pointed to federal Build America, Buy America requirements attached to the project’s financing as another factor contributing to higher costs.
Those requirements call for iron, steel, manufactured products and construction materials used in the project to be produced in the United States, according to Arcadis. The firm said the requirements have increased materials and equipment costs on similar projects and likely contributed to the higher cost in Newburgh.
The project requires separate contracts for general construction, plumbing, heating and air conditioning and electrical work. The council also awarded a $384,000 plumbing contract to TM Brennan Service Inc. and a $566,700 HVAC contract to DJ Heating and Air Conditioning Inc.
Newburgh received only one bid for the plumbing work and three for heating and air conditioning, according to Arcadis. The city did not receive any bids for the electrical contract and put the work out to bid again, Morris told the council.
“It’s difficult to find any kind of contractors at this point,” Morris said. “There is a severe shortage of people in the trades.”
The project’s overall cost includes expenses beyond the construction contracts. The project includes an estimated $4.13 million for electrical work, about $4.83 million for engineering CARE, $400,000 in CSX-related costs and $200,000 for bond counsel, local counsel and fiscal services, according to the city’s cost calculation. The calculation also includes contingency required by the New York State Environmental Facilities Corporation.
Newburgh will initially use short-term financing through the Environmental Facilities Corporation during construction before converting the remaining balance to long-term financing once the project is completed, Morris told the council. The long-term financing typically runs for 30 years, he continued.
As Newburgh heads into its budget process, Councilmember Ronald Zorrilla said he wants to see how the city’s borrowing for infrastructure projects fits into a longer-term financial plan.
“Looking forward to budget season, I would be curious to see how this timeline plays out for a multi-year plan,” Zorrilla said. “I’m curious if the consultant who’s coming is going to help us map out the timeline of these bonds.”
The city will not be responsible for all of the long-term debt associated with the sewer project, according to Morris.
“Once the city rolls the financing from short-term to long-term, because this project also serves wastewater from the Town of Newburgh, the Town of Newburgh has a 42% debt-sharing requirement on this project as well,” Morris said. “It will not be entirely financed by the City of Newburgh.”
The city portion of the debt will be paid through its sewer fund rather than the general fund, according to Morris.
The Combined Sewer Control Facility is one piece of a broader series of sewer projects that began in 2016 and are scheduled to continue through 2031 under the city’s long-term control plan, Morris told the council.
The planned Liberty Street reconstruction is another project under the plan and will include sewer separation and green infrastructure. Morris said the city is targeting sewer separation in specific areas rather than attempting to separate the entire system.
The city is required to issue a notice to proceed with the project by Nov. 1, according to Morris. He said construction of the Combined Sewer Control Facility is expected to be completed by March 2029.