The Gloversville-Johnstown Wastewater Treatment Facility will require a comprehensive upgrade to accommodate increased outflow from the Fage yogurt factory if it doubles in size as proposed.
The cost of the upgrade will be established by an engineering study, which is under way, and be paid for by the Glove Cities through municipal bonds.
Both cities and Fage USA Dairy Industry have to approve a proposed capital improvement and usage agreement. The sewer board approved it Wednesday night.
Gloversville Mayor Dayton King said the city has several options to pay the proposed cost. “There may be state money available and Fage may contribute as well. It is something we want; it will increase jobs in our county and decrease the property taxes,” he said.
Gloversville City Councilman Wrandy Siarkowski, the city’s liaison to the sewer board, said the wastewater treatment facility has been named a priority project for state funding through Empire State Development.
Fage officials were not available Thursday for comment for this story.
Customers of the treatment facility will repay the bonds through charges tacked onto their rates, with Fage bearing the brunt of the new charges, said George Bevington, a consultant with the wastewater treatment facility.
Bevington said 2013 is the earliest that work can start on the capital project.
Fage has yet to begin its own expansion project. It wants to build a $100 million, 180,000-square-foot addition to its main plant in the Johnstown Industrial Park and construct a $15 million whey pretreatment facility near the sewage treatment plant.
The pre-treatment plant is a separate project from the sewage plant upgrade; Fage has yet to begin this project, for which it is paying.
The company wants to double the plant’s capacity to 160,000 tons annually to meet growing demand for its product, adding another 150 workers to the 240 there. Fage opened the 220,000-square-foot Johnstown facility in 2008.
Fage is the fourth-largest producer of Greek yogurt in the United States, with a 5 percent share of the U.S. yogurt market and 2011 sales totaling $141.7 million, up 66.3 percent from 2010, according to Specialty Food magazine.
Bevington said once Fage’s addition is up and running, it is expected to generate 1 million gallons a day of wastewater and washwater, approximately double its current output. He said the sewer plant as presently configured cannot handle more than 2 percent of this amount without a comprehensive upgrade.
The upgrade would include the addition of another treatment tank as well as “refinements and modifications” to the current plant, Bevington said.
The plant is owned by Gloversville and Johnstown, which jointly pay for its maintenance and operations.
The sewer board is requiring Fage to “pursue and complete expansion of its yogurt production by Dec. 31, 2014,” otherwise it may terminate the agreement and not be obligated to undertake the capital improvements.
Bevington said this date was agreed to by all parties and represents a reasonable time frame for completion of Fage’s expansion.
Sewer board officials said they do not want to invest in the treatment plant’s infrastructure without a guarantee Fage will use the improvements through its proposed expansion.