Legislature approves amended five‑year contract with UCRRA, sets $60 million bonding cap and leaves indemnification unresolved

The Energy, Environment and Sustainability Committee on Sept. 2 voted to advance a five‑year service agreement between the Ulster County Legislature and the Ulster County Resource Recovery Agency (UCRRA), adopting several committee amendments including a change to the permissible outstanding bond cap and deletions of two provisions related to the net-service-fee trigger and an “intent-to-bond” notice process.

After discussion, committee members amended the draft contract to increase the cap on bonds the agency may issue without prior legislative approval from $40,000,000 to $60,000,000. Director Mark Ryder told the committee that $60,000,000 would “allow us to do the bulk of the work when it comes to diversion and 0 waste” while recognizing the historical 1992 cap’s inflationary equivalent would be much higher. He described the cap as a means to preserve agency flexibility for capital projects while ensuring the legislature retains approval authority for larger financings.

Rationale and fiscal effect: Ryder said the agency’s lack of an executed contract can raise its borrowing costs — roughly a 50-basis-point premium in bond interest in his estimate — because the contract’s net-service-fee backstop improves credit terms. He also said the “net service fee” formula (a formula in the contract that compares agency expenses and revenues) has produced a $0 net-service-fee outcome for the agency in most recent years but remains a systemic insurance mechanism should expenses outstrip revenues in the future. On the committee floor, some legislators asked about potential county exposure; county staff and Ryder repeatedly said the enacting statute and current contract formulas contemplate revenue bonds and that New York State and the county are not general-obligation guarantors of agency debt.

Other contract edits: the committee voted to strike two sections (2.05 and 2.06) from the draft. According to Ryder and committee discussion, 2.05 would have limited invocation of the net-service-fee only to a situation where flow control was rescinded; committee members removed that restriction so the established net-service-fee formula could remain effective as an insurance mechanism if needed. Section 2.06 — an “intent-to-bond/notice” provision that had created a bicameral process for a potential bonding vote — was also struck because the committee concluded the bonding-cap amendment plus the legislature’s standard capital-approval processes provide sufficient oversight.

Indemnification deferred: committee members debated a contract indemnification clause that had been revised from the agency-only indemnity in prior contracts to a mutual indemnification. Some legislators expressed concern about adding potential county liability; others noted that unilateral indemnities had been in prior contracts without apparent use. Members agreed to leave the indemnification language for additional review by legislative counsel (committee requested counsel Chris Ravecchi examine practice in other counties and provide options) and to revisit the language at Ways and Means.

Votes and next steps: the committee approved the amended contract language and sent the resolution, as amended, forward; the committee recorded the vote on the resolution adopting the contract as 5-0 in committee. The resolution will move to Ways and Means and then the full legislature for final consideration and the contract will be reviewed by legislative counsel before final passage.

Ending: The committee’s amendments preserved a dual aim: provide UCRRA greater capital flexibility to pursue diversion and reuse projects while ensuring legislative oversight for larger debt issuances and seeking further counsel review on indemnification before final approval.