Letter to Secretary Vilsack

Letter

Today, U.S. Senator Charles E. Schumer called on the Secretary of the United States Department of Agriculture (USDA), Tom Vilsack, to address a rule change that has disqualified the town of Kirkland from applying for federal funding that would help complete a vital infrastructure project and provide relief to local taxpayers. Standing at the Clark Mills Sewage Treatment Plant, Schumer said that the USDA told Kirkland it would likely get almost $4 million in federal funds to upgrade a sewage treatment plant but at the last minute changed how rules were applied in such a way the Kirkland was disqualified. Schumer called on Secretary Vilsack to "grandfather in" Kirkland, so that it can still apply for the funding it was told it would likely receive, and so the upgrade won't have to be paid for entirely by local taxpayers.

Schumer's office was contacted by Kirkland Supervisor, Bob Meelan, and several communities that have been affected by the rule change. At issue is a decision by USDA to strictly enforce a rule allowing only communities under 10,000 people to apply for the grant program, as well as a decision by USDA to change the definition of the geographical limits that the 10,000 people have to live in.

In 2009, Kirkland was looking to upgrade its sewage treatment plant and clear space for new housing developments so it applied for USDA's Water and Waste Disposal Grant Program, which it received funds from in 1981 and 1991. In June, Kirkland received a Preliminary Eligibility Determination letter, which generally all but assures funding. From there, the town went to work laying the groundwork for the $5.3 million project spending $500,000 for the preliminary design in anticipation of approximately $4 million from the USDA.

In December, the USDA reversed a long standing tradition that allowed communities just above statutory population levels to apply for the program, making communities like Kirkland that had received funding for the program in previous years all-of-a-sudden ineligible. At the time, local residents and officials were shocked to learn that USDA had changed its rules putting the entire infrastructure project at risk.

"Everyone knows it's unfair to change the rules in the middle of game, but that's exactly what did happen in this situation and it's hurting Kirkland," Schumer said. "This decision by USDA accomplishes nothing but putting a job creating project at risk and leaving taxpayers on the hook for $500,000. The good news is that Secretary Vilsack can fix this problem right away by grandfathering Kirkland into the program and I am urging him to do that right away."
USDA's Water and Waste Disposal Grant Program has helped rural communities all over New York to develop critical water and waste disposal systems. This support has helped reduce water and waste disposal costs down to a reasonable level for rural users, a constituency that is very important to the vitality and success of New York and to the entire country. Prior to 2002, USDA agency regulations defined a rural community as one comprised of a population of less than 50,000 people. When it came to water and waste disposal loans and grants agency regulations were even more specific, limiting applicant eligibility to municipalities with less than 10,000 people.

USDA decided in December 2009 to issue a clarification memo requiring all states to follow the program's population statutory requirements and that all those over the population limit are disqualified. More than fifteen communities across New York, including Kirkland, were told they were eligible to apply, received pre-commitment letters, and then were later told they were ineligible. Kirkland has spent $500,000 in preparation for receiving this funding. While a pre-commitment is not a formal funding commitment, it is inherently unfair to disqualify communities that were at one point told they were eligible, and have been given an indication that they would receive funding.

Below is a copy of Schumer's letter to Secretary Vilsack:

Dear Secretary Vilsack,

I write today to bring to your attention an issue that is adversely affecting at least fifteen communities across the State of New York.

USDA's Water and Waste Disposal Grant Program has helped rural communities all over New York to develop critical water and waste disposal systems. This support has helped reduce water and waste disposal costs down to a reasonable level for rural users, a constituency that is very important to the vitality and success of my state and to the entire country.

Prior to 2002, USDA agency regulations defined a rural community as one comprised of a population of less than 50,000 people. When it came to water and waste disposal loans and grants agency regulations were even more specific, limiting applicant eligibility to municipalities with less than 10,000 people. In order to ensure that communities that were in fact rural or rural in character, these population restrictions were codified in the 2002 and 2008 farm bills.

For years, state USDA offices did not always adhere to the water and waste disposal program population thresholds, allowing communities that exceeded people 10,000 to apply. With this precedent in mind, many New York communities applied for water and waste disposal grant funding. In several cases, communities were given both informal commitments and formal preliminary eligibility determination letters, letters that itemized award terms and gave communities the impression that they were all but assured to receive financial assistance.

USDA decided in December 2009 to issue a clarification memo requiring all states to follow the program's population statutory requirements and that all those over the population limit are disqualified. More than fifteen communities across New York were told they were eligible to apply, received pre-commitment letters, and then were later told they were ineligible. These communities in many cases have spent hundreds of thousands of dollars in preparation for receiving this funding. While I recognize that a pre-commitment is not a formal funding commitment, it is inherently unfair to allow communities to apply if it is known beforehand that they do not meet statutory requirements.

At this time, I respectfully urge that all New York communities that applied to the Water and Waste Disposal Program and received preliminary eligibility determination letters be considered for review.

Thank you for your consideration of this important request. For additional information, please do not hesitate to contact me.

Sincerely,

Charles E. Schumer
United States Senator

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