Section: CAPITAL REGION,  Page: B1

Date: Thursday, March 6, 2003

The Albany Water Authority is paying the city $7 million for a 50-year lease of Six Mile Waterworks, a move that secures a backup water supply amid terrorism concerns and helps plug holes in Mayor Jerry Jennings' budget for three years. The 206-acre park area off Fuller Road, including 40-acre Rensselaer Lake, wasn't part of a deal engineered by then-Albany Mayor Thomas Whalen in the late 1980s, which sold most city water assets to the new authority and tapped about $6.9 million for city coffers.

But now, the lease of this omitted liquid asset is helping Jennings keep budgets for 2002, 2003 and 2004 in the black and, according to Water Commissioner Robert Cross, provide the city with another source of potable water in case of an emergency.

``I'm hoping we never have to do this, but to be prudent, you really need to look at all these possibilities,'' said Cross.

The city's main water source is the 13.5-billion-gallon Alcove Reservoir in Coeymans, which also is fed by the 716-million-gallon Basic Creek Reservoir in Westerlo. The 210-million-gallon Loudonville Reservoir supplies the city as needed and serves as the main emergency water source, offering an approximately 10-day supply, according to Cross.

Common Council Member Dominick Calsolaro of the 1st Ward said he's concerned the transaction is part of a strategy that obscures city financial problems by shifting some of the tax increases residents would see on their property tax bills to their water bills.

The city budget for this year included a 7.4 percent property tax increase, and the water authority now is seeking a 9.5 percent rate increase.

``I thought it was just a way for the city not to raise property taxes 15 to 16 percent this year,'' said Calsolaro, who voted against the lease plan -- which is one of three ``one-shot'' money raisers included in this year's city budget. The others are for sale of city-owned land to the Port of Albany and to the Albany Local Development Corporation.

Of the $7 million lease payment for Six Mile, $2.5 million already was financed through bond anticipation notes and sent to the city in time to help with last year's budget, according to Cross.

Another $3.1 million is to be paid this year, and $1.4 million is scheduled for payment in 2004.

Calsolaro said he worries the city will be left with a wider gap in its budget, once the money from the water deal and other one-time infusions of cash is used up. He also said he doesn't believe all the possible consequences of the water deal were thoroughly explored before it was included in this year's budget. Among his other concerns: the lake's proximity to the city landfill.

``I thought it was a rush job,'' he said.

Cross, however, said testing done in November by Adirondack Labs of Albany turned up no signs of contamination.

The man-made Rensselaer Lake at Six Mile actually was Albany's first public water supply, providing drinking water from 1851 to 1926 and helping to enable westward expansion of Albany, Cross said. Originally, the water from the 200-million-gallon lake, created by damming up tributaries of the Patroon Creek, flowed through an underground brick conduit to an in-town reservoir at Bleecker Park.

Six Mile Waterworks already includes a pumping station that helps boost water pressure for some parts of west Albany, Cross said, and an existing water main on Fuller Road offers a natural transmission route for the water, once a connection is built to the waterworks.

The authority will need to supply a filtration system, perhaps buying a mobile unit, and increase security at Six Mile, but Cross said he doesn't expect current recreational use of the park and lake, which includes fishing and boating, to be curtailed.

``At this point, we don't envision any major changes at Six Mile, except staffing with guards,'' he said.

Cross said the cost of the filtration system remains unclear and he noted that he suspects that Rensselaer Lake holds less than 200 million gallons now, due to likely accumulations of sandy silt over the years.

He acknowledged that the expenses related to the acquisition and maintenance of Six Mile account for a portion of the rate increase now being sought by the Water Board, but he said overall increases in security and repairs to aging infrastructure are larger factors.

``It certainly is not the major reason for the increase,'' Cross said.