BERLIN — Over the next four years, Berlin residents will see a small, but steady, increase to the cost of their sewage rates.
Beginning July 1 of this year, sewage rates will increase by 5 percent, a trend which will continue every year until 2013. In 2014, there will be a 6-percent increase, resulting in a 21-percent total increase.
The higher rates are a result of costs accumulated during the construction of the town’s new Wastewater Treatment facility as well as running costs estimated for the future.
“It’s a projection … sort of a working model,” said Charley Curcio, a financial consultant who presented an estimated timeline of the new facility’s running costs at Monday’s Mayor and Council Meeting.
According to Curcio, the increase in sewage rates “will cover all known or anticipated expenses,” at least for the next four years.
“You should be at a sound financial footing,” he told the council.
The rate increases will raise the average resident’s monthly bill from $43.99 in 2011 to $51.41 by 2014.
“You will need to raise the rates at least this high,” warned Curcio, who pointed out that the projections for the plant’s expenditures versus revenue over the next decade were subject to change.
While a 21-percent rate increase with the potential to rise even higher seemed to worry some on the council, Mayor Gee Williams explained why he thought the growth was reasonable, noting that the actual percent per year increase would be relatively low.
“It’s one of those things that makes it more manageable for the rate payers,” he said.
While additional increases might become necessary when the situation is reexamined in 2015, Williams remarked that none were currently planned and it would be something for a future council to think about.
“Setting rates every four to five years makes sense,” he said
“I don’t understand the numbers,” said Councilwoman Paula Lynch, referring to the analysis of the Wastewater Treatment facility.
Lynch added that the negative numbers associated with the plant’s operating costs were worrisome.
Councilwoman Lisa Hall shared the concern over what the facility might cost the town, pointing out that there was more than a $1 million deficit anticipated from the plant by the year 2022.
“Eventually, somebody’s got to pay this,” said Hall.
She worried that Berlin was only “pushing the debt down the road.”
Williams noted that the projection of debt for 2022 was only a “guesstimate” at this point.
“Nobody knows for sure,” he said.
According to Williams, the new Wastewater Facility is worth the rate increase and the possible debt, since it will hopefully serve the town for three decades or more, and will have a chance to make up early losses in the years to come. Even if the plant runs at a loss for a while, Williams expressed confidence that Berlin is strong enough to compensate.
“The town’s ability to borrow has only been enhanced over the years,” he told the council, calling Berlin’s overall financial situation “solid.” The mayor went on to say that the town’s reserves were “many, many times more than what would be adequate” to balance the cost of the new facility.
Williams clarified that the $1 million was a flexible number and would be heavily influenced by how much development Berlin and the surrounding area sees in the next decade.
Curcio asserted that, in the end, there should be a “zero affect” between plant operating costs and sewage rates without the town generating unbearable long-term debt. Williams was optimistic about the benefits of the new facility outweighing the costs and hoped that having a state-of-the-art wastewater treatment plant in town would be an improvement and an attraction to developers.
“That’s the way the future is going to be,” he said.
Despite the discussion, Hall remained unconvinced that the plant wouldn’t result in debt issues down the road.
“Sooner or later, it all catches up,” she remarked.