As with many cities, the City of Amsterdam in Montgomery County, New York owns and operates an extensive and aging system of water and sewer infrastructure that serves not only properties within the City limits, but also lands within water and sewer districts in the adjacent Town of Amsterdam. Additionally, as with many cities in upstate New York and their surrounding suburban areas, the City suffers from disinvestment while the adjacent suburban towns thrive. While the economic activity is located within the towns, the towns rely on the City to provide robust water and sewer services. Over the years, the City and Town of Amsterdam struggled with the costs and provision of services. The City’s need for financial support resulted in annual increases in water rates to the surrounding towns. Meanwhile, the surrounding towns were competing for economic investment, and the uncertainty of water rates was hampering development in the towns.
To that end, Delaware Engineering, as the Town of Amsterdam’s engineering consultant, was tasked with evaluating the situation and developing a durable solution that provides the City with revenue while stabilizing water rates in the Town. Delaware Engineering evaluated the financial status of both entities and developed an Intermunicipal Agreement (IMA) for Water Service and a companion Intermunicipal Agreement for Revenue Sharing. The IMA for Revenue Sharing provides for a sub-redistribution of sales tax from the Town to the City under conditions that do not impact the Town’s finances, yet provide the City with necessary revenue in exchange for stable water rates in the Town. The end result is a long term partnership of investment in the water infrastructure on which both the City and Town depend.