Berlin’s Debt Still A Problem

BERLIN – The electric company in Berlin will operate on a slim margin this year, with commercial sales down and operations costs going up, staff reported to the Berlin Mayor and Council this week at a budget work session.

“We had growth in the residential sales but they pay a lower rate than a commercial or industrial customer,” said Berlin’s Administrative Director Linda Bambary after the meeting. “There’s just a very slim increase … our revenues are not growing as large as we had hoped.”

While increased energy costs are passed through to the customer, operations and maintenance costs have been held at 2002 levels and will continue at that rate.

Berlin will attempt to rein in the power supply rates by making sure to get credit for the generators the town owns, which they could not do last year.

“You get a credit if they’re just sitting there and they can generate power,” she said.

Bambary warned that prices would still be high, no matter what power supply agreement is made.

“When you see the cost of fuel at the gas pumps up, you’re not going to get a low price for electricity,” she said. “The days of getting a real low power supply rate are gone.”

On the heels Councilwoman Ellen Lang’s suggestions customers need to learn conservation, Berlin Mayor Tom Cardinale suggested holding a workshop on saving energy.

Council Vice President Gee Williams suggested including a list of ways to reduce energy costs through conservation in electric bills.

One expense the town can do nothing to reduce is debt service on bonds in the millions. Last year’s attempt to sell the electric company grew out of a desire to eliminate that debt, but the sale failed.

“We are paying about a million a year in debt service and that’s pretty staggering,” Bambary said. “Nothing we can do about it.”

The full amount of the debt is $9.3 million.

“The challenge is not new. It’s the continuing challenge of debt service,” said Williams. “It’s the albatross on everyone’s back.”

The council also heard from staff on the town water utility, which owes the general fund $1.1 million for capital expenditures since 1996, including the Route 346 water tower, distribution lines along Route 346, and replacement lines at Powellton Ave. and Burley St. The debt cannot be bonded because the loan is longstanding.

Bambary suggested writing that debt off and reducing the fund balance in the general fund. Keeping the $1.1 million loan on the books could jeopardize the plan to install radio read water meters in town.

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