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Letter to Tom Vilsack, Secretary of the U.S. Department of Agriculture

Letter

By:
Date:
Location: Washington, DC

Today, Congressman Scott Murphy (NY-20) joined with several members of the NY Congressional delegation to call on Department of Agriculture Secretary Tom Vilsack to reverse a recent guideline change preventing the Town of Moreau and Village of Red Hook from accessing much-needed USDA rural development funding for water and waste disposal (WWD) projects. Prior to the fall of 2009, New York State USDA was given the discretion to determine eligibility for water and waste disposal projects by the population of the water system's service area, when the 10,000 population would have otherwise disqualified the applicant.

In New York, some towns include incorporated water or wastewater districts which only provide water services to a specific service area within the town. Many towns also include incorporated villages that provide an array of municipal services only within the village limits, often including drinking water and wastewater services. Through the end of last year, many of these water or wastewater districts, villages and the surrounding towns with populations below 10,000 were appropriately treated as separate entities and were eligible for Rural Development's Water and Waste Disposal grants and loans

However, last year, the USDA issued new guidelines which require USDA Rural Development to reinterpret its definition of towns and combine the population of a town with the population of an incorporated village and/or incorporated water or wastewater district for purposes of determining eligibility. These new rules have disqualified many sewer projects in Upstate New York that are below the Rural Development threshold of serving under 10,000 residents, including the Town Moreau and the Village of Red Hook.

Along with other members of the Upstate New York delegation, Congressman Murphy today sent a letter to Agriculture Secretary Tom Vilsack urging him to reconsider this misguided re-interpretation and allow the New York USDA to use the eligibility criteria it used prior to the guideline change in 2010. Since taking office, Murphy has worked with officials at the State, local, and federal level, sent several letters on the issue and introduced a legislative fix for all of New York.

"The Town of Moreau and Village of Red Hook need this critical funding to develop their sewer systems and should qualify based on the historic application of USDA's guidelines. Changing the rules in the middle of the game is not only unfair, but it also limits these communities' ability to make the necessary investments to meet their needs and grow their economies," said Rep. Murphy.

"The recently changed application of USDA protocol has and will continue to have a negative effect on Upstate communities. Small rural communities like Red Hook and Moreau are being unfairly penalized. I strongly urge Secretary Vilsack to restore the discretion formerly employed by state level USDA representatives to help insure that this type of geographic discrimination doesn't continue to harm our communities. We can't build a 21st century economy on a 19th century infrastructure and this project will be key to Red Hook and Moreau's economic development."

Background:

The Village of Red Hook has been working with USDA Rural Development and NYS Environmental Facilities Corp to put together a financial package for the construction of a municipal sewer system. Red Hook organized a task force six years ago to deal with the local goals of saving area farms and concentrating development in an adjacent to the Village.

The centerpiece of the Red Hook plan is the construction of a sewer system which will allow for greater density of development in and around the village and the concomitant preservation of farmland.

On November 3, 2009, USDA Rural Development issued a revised Preliminary Eligibility Determination to the Dutchess County Water and Wastewater Authority for the proposed Red Hook Central Sewer System. The PED indicated an estimated funding package that included a grant of $3,403,000 and loan (3.375% for 38 years) of $533,000. Based upon that preliminary commitment of funding, in conjunction with eligibility for hardship financing through the New York State Environmental Facilities Corporation, the Dutchess County Legislature, on February 11th, voted unanimously to establish the Red Hook Part-County Sewer District.

The Town of Moreau has proposed a sewer project that would serve a population of approximately 2,500 individuals. As a rural community, the Town has worked with USDA Rural Development in an effort to secure funding for the project. While the Town has a population of 9,658--within the population limits for Rural Development's water and waste disposal (WWD) program --USDA has indicated that it would include the population of the Village of South Glens Falls (population 3,368) and the population of a New York State prison (approximate population 800) in the Town's total population calculation. As a result, USDA has determined that the Town of Moreau, with a re-calculated population of 13,862, is ineligible for WWD funding through the Rural Development program.

The letter Congressman Murphy sent to Agriculture Secretary Tom Vilsack is below:

July 16, 2010

The Honorable Tom Vilsack
Secretary of Agriculture
U.S. Department of Agriculture
1400 Independence Avenue, S.W.
Washington, D.C. 20250

Dear Secretary Vilsack:

We are writing to urge the department to reconsider its new interpretation of the definition of "rural" and "rural area" in New York State with regard to the USDA's Rural Development Water and Waste Disposal program. We believe that many communities in New York are being unfairly excluded from this program at a time when they desperately need federal assistance.

As you know, current law limits USDA Rural Development grants to towns with a population under 10,000. The term "towns" is not defined in the law because it has different meanings in different states. In New York, some towns include incorporated water or wastewater districts which only provide water services to a specific service area within the town. Many towns also include incorporated villages that provide an array of municipal services only within the village limits, often including drinking water and wastewater services. Through the end of last year, many of these water or wastewater districts, villages and the surrounding towns with populations below 10,000 were appropriately treated as separate entities and were eligible for Rural Development's Water and Waste Disposal grants and loans.

Unfortunately, last year USDA Rural Development reinterpreted its definition of towns. Following that decision, in January, 2010, the agency determined it would not issue grants and loans to a number of towns in New York that were previously eligible to receive them. The agency decided, on its own accord, to combine the population of a town with the population of an incorporated village and/or incorporated water or wastewater district for purposes of determining eligibility instead of counting them separately as it did before. As a result of this change, many towns and water or wastewater districts which were once eligible for grants have lost their eligibility.

Moreover, USDA issued this new policy in an internal memo which was not subject to public review or comments. In addition, this new policy was never shared with affected members of Congress. This is a major policy change that will negatively affect water and wastewater infrastructure in rural New York. This is troubling not just because of its lack of transparency and openness, but because neither we nor our constituents had any opportunity to prepare for this change.

For these reasons, we respectfully request that you reconsider this misguided interpretation and allow the department to use the eligibility criteria it used prior to the January, 2010 memo for communities in New York. As you consider our request, we also ask you to provide us with a list of every community in New York that would have been eligible before January, 2010 but is now considered ineligible to receive funds under this program. We have identified 16 communities that we know are now ineligible due to the change of interpretation, but this is not an exhaustive list. It is important that we know the full extent of the impact of this new interpretation of the law on our constituents, which should have been done prior to the issuing of these new guidelines.

We appreciate you considering our requests and look forward to working with you to resolve this issue.


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