While a deal is still far from being made, the Manhattan Town Council and the Amsterdam Sewer District Board moved closer to the middle Wednesday over a proposal that both sides said could benefit each other.

The Amsterdam Sewer District lagoons are out of compliance with state regulations and the district board is looking at two proposals to rectify the problem, board members said. The district can either pipe effluent to Manhattan or construct another sewage lagoon.

Both remedies cost about the same, sewer district engineer Kevin Johnson said. It would cost an estimated $4.57 million to build a new aerated lagoon, and piping wastewater to Manhattan rings in at an estimated $4.29 million.

Early estimations put joining the two communities at a disadvantage due to impact fees required by Manhattan to expand the facility in the future, Johnson said.

A new turn, though, with a neighboring landowner to the current Amsterdam lagoons, changed that scenario, Johnson said. The district has long eyed a chunk of ground adjacent to the lagoons, but the landowners have since said they don't want the effluent on their land.

With that, the district would have to construct a new lagoon roughly two miles away on state ground, but the move would require extensive infrastructure and additional costs to push wastewater uphill for two miles, Johnson said.

The new development made connecting to Manhattan more appealing, Johnson said.

Manhattan impact fees are the reason the costs are similar, according to Amsterdam district records. The actual estimated cost to connect to Manhattan is $2.69 million, but the estimated $1.59 million impact fee raises the total cost.

The fee was determined by the town's current impact fee rate which calls for charging $4,774 per sewer hookup, Town Engineer Dave Crawford said. The price was determined by multiplying the number of Amsterdam hookups, 335, by the fee rate.

The fee would be a one-time payment to Manhattan for taking on additional flows and reducing the overall capacity of the sewer, engineers from both sides said. The Amsterdam district produces about 85,000 gallons per day.

The money could be used to both pay down the $4.7 million loan on the sewer and for future expansion needs, Crawford said. The sewer design is set up for easy expansions and impact fees were implemented to stave off costs to current users for future needs.

The fee isn't negotiable, both Crawford and Town Councilman Dan Ryan said. Impact fees are town policy stemming from an impact fee study that is legally defensible. If the town brokers a deal with Amsterdam, then Manhattan is on the hook for any and all future development requests for a lower rate.

"They are an established policy and if we start to negotiate with them, then we have to negotiate to everybody," Ryan said. "If somebody is building a new house, we can't do that for the builder, so we have to hang on to what we are quoting."

While still preliminary, both sides are working on a method that would use flow rates for the costs. Using flow rates rather than hookups would create a "pay as you go" scheme, Crawford said. Under that proposal, current Amsterdam users would be insulated from expansion costs because new users would be on the hook for increased flows.

Flow rates could also be diminished by installing modern water-saving plumbing devices, Crawford said.

"If they can keep the flows low, they wouldn't have to pay anything," he said of future development in the Churchill area. "Pay as you go is a fair way."

A joint venture would not only be a relatively easy fix for Amsterdam, but would benefit Manhattan as well, Mayor Tony Haag said.

Originally, developers around Manhattan were pegged to pay off the system when new houses came online, according to town records. But due to Manhattan's struggles to obtain a water permit and the housing bust, growth has ground to a halt.

In order to obtain government grants and loans, the town council passed a resolution in 2006 allowing the town to raise residential sewer rates to $83 per month to pay for the system if projected growth didn't appear, according to town records.

If the deal works out, Manhattan residents wouldn't have to pick up the full tab and Amsterdam folks wouldn't have to build a new system, Haag said.

"We have issues and you have issues," he said. "I think we can make this work and each community would benefit."

But the devil is in the details, said Hank Dyksterhouse, chairman of the board of the Amsterdam Sewer District.

The district held a public meeting last week and residents expressed concerns about the venture largely because district users want the best value.

"Money talks," he said. "If Manhattan is cheaper, they'll want to do that. They are going to do what's cheapest."

As it stands, preliminary estimates indicate Amsterdam users would pay a monthly sewer fee of around $99 per for a new lagoon and about $102 per month to connect to Manhattan, according to district records. The rates are based on loans required for new infrastructure. Manhattan tops a little higher due to a monthly $18 operational and maintenance fee for each hookup.

The district board will meet in the coming days to determine which option to pursue.