HARTWICK - The Hartwick Board of Water Commissioners voted Monday night to move forward with a $1.6 million upgrade to its more than 100-year-old water system.

The town board, which also acts as the board of water of commissioners, held two public information meetings this fall about the project to explain the project and solicit comment from residents of the water district.

Town supervisor Carol Neidzialkowski said during the first meeting that over the years plans to improve the system have lost momentum, but that the town board had decided to again look into the possibility of doing a big project.

Monday night she commented that "this is the farthest we've ever gotten with the water system. It's not a decision any of us took lightly."

The improvements to the system include a new well, 150,000 gallon storage reservoir, 8-inch water mains, replacement of service lines when necessary, rehabilitation of the creamery well building, an emergency generator and for the first time, meters to recorded each customer's usage.

Funding would come from a mix of federal and state loans and grants. The bulk of the money will be a $1.37 million, no-interest loan from the New York Sate Drinking Water Revolving Loan Fund.

The U.S. Department of Agricutlure Rural Development Agency will provide a $116,000 grant and $100,000 loan at 4.5 percent interest.

The water district currently has no debt and repaying the loans would add $200 a year to all water customers bills. The cost of the proposed plan would bring the annual cost to residential customers to approximately $369, including the debt service.

Customers are now paying $150 for water.

Before the board voted on the project, they heard from four water district residents who had concerns about the project.

Bill Schilling said that the pipes in the town are 100-years-old and need to be replaced, but that it seemed to him that it would be possible to make a systematic replacement of the pipes "for a lot less than this will cost."

The problem with that approach, board members explained, was that it would jeopardize the funding package that has been worked out.

"I feel that we are basically prostituting ourselves to get the loan. We need new pipes, there's no doubt about it. What we're getting here is a piggyback thing."

Ray Poulech, who owns one of three homes in the district which is not hooked to the system was concerned about being charged for the debt service even if he does not receive water. Supervisor Niedzialkowski owns one of the other two homes.

The board told Poulech that charging those properties for the debt service was legal, but a decision to do so had not yet been made.

The board also voted to retain a bond counsel and act as lead agency for the project. As lead agency, they went over the required state environmental review and made a negative declaration for the project.

Niedzialkowski said much of the coming year would be taken up securing funds and soliciting bids for the project. There is a chance the project could begin next fall, but most of the work will be done in summer of 2004.

The board had originally believed the bond resolution would be subject to permissive referendum, but because Hartwick is a town and not a village, it is not subject to referendum, the supervisor said.