By JOHN FLOWERS
MIDDLEBURY — Middlebury selectmen continue to look at ways to avert — or at least minimize — a boost in municipal water and sewer rates that may be needed to offset increasing expenses at a time of declining use of those services.
Town officials recently revealed the potential need to increase Middlebury’s water rate by around 20 percent — from the current $2.85 per 1,000 gallons used to $3.43 — in order to meet greater water department expenses in fiscal year 2010.
At the same time, town officials say a 9.6 percent bump in sewer rates — from the current $5.94 per 1,000 gallons to $6.51 — in order to plug a potential revenue shortfall of almost $100,000 in the wastewater fund.
The increases, if implemented, would raise the average annual water bill for a family of four by $28, and the average annual sewer bill by $27, according to Middlebury Assistant Town Manager Joseph Colangelo.
He said the water and sewer budgets are largely influenced by fixed costs.
“Most of the expenditure for both budgets are tied up with wages, benefits, debt service, equipment fund transfers, transfers to the general fund and electricity,” Colangelo said. “There is actually very little fat in the budget that hasn’t been trimmed by department heads already.”
At the same time, water use is on the decline in Middlebury, as residents practice conservation and some of the town’s larger users — such as Agri-Mark/Cabot — have either dug wells or changed use patterns.
“This year’s water use is going to be about 10 million gallons less than the previous four quarters, so it is a pretty substantial decline,” Colangelo said.
Selectmen are reluctant to raise the water and sewer rates — particularly at a time when the use of those services are waning. They reasoned that a hike might discourage businesses from expanding in town, while also hurting residential users in this tough economy.
Board members on Tuesday reviewed a potential multi-tiered system that would result in a lower rate for Middlebury’s larger water users. Specifically, the new system would produce a rate of $4.02 per 1,000 gallons for those using up to 99,999 gallons; $3.09 per 1,000 for those using 100,000 to 249,999 gallons; $2.92 per $1,000 for those using 250,000 to 499,999 gallons; and $2.74 for those using more than 500,000 gallons. Estimated receipts showed the new system would reward larger commercial/industrial users at the expense of residential users. Smaller users as a group would end up paying $76,382 more under the multi-tiered system than under then current flat rate, while the largest users together would pay $65,729 less, according to figures presented by Colangelo.
“The price-per-gallon would be less the more you use, but the residential user, I guess, would be subsidizing the larger user under this system,” he said.
Colangelo noted Montpelier has a multi-tiered rate structure for its water charges. But that system provides the best rates to the smaller users. Montpelier’s basic rate is $7.29 per 1,000 gallons, noted Middlebury Town Manager Bill Finger.
Middlebury Director of Operations Dan Werner estimated Middlebury’s water system is currently dispensing about 1.1 million gallons per day. That’s approximately 300,000 to 400,000 gallons less than it is reasonably capable of delivering each day, according to Werner.
Given the abundance of municipal water reserves, Middlebury selectboard Chairman John Tenny said it would not add-up for the town to raise rates — particularly during a period of declining use.
“To me, that doesn’t make sense,” Tenny, a local builder, said. “In my business, I can’t — just because sales are down — go out and say, ‘I need to charge 20-percent more because my cost per unit is higher.’
“We already have a diminishing sale going on,” Tenny added. “The rate is high enough to enforce conservation in the system. Raising the rate isn’t required to do that for people who realize ‘water costs money and we should not waste it.’ But what you are doing is retarding the sales to an extent that you increase the cost per unit, because as the number of units sold goes down.”
The answer, Tenny said, likely rests in finding a way to “stimulate sensible, greater use in the system.”
Selectman Dean George agreed, adding he is concerned the signal a water/sewer rate hike could send to businesses.
“I like the idea of looking at some of the large water users, who may not be using it to their fullest capacity, and maybe examining how much more they are able to use to take up some of (the town’s excess water capacity),” George said.
Selectman Don Keeler agreed.
“I think we have a good quantity and quality of water; it’s something that we should be trying to market,” Keeler said. “If it means the difference between a business staying or going because of water, we might want to think about those concessions.”
Selectman Bill Perkins said he would be concerned about an increase to any customers.
“I don’t think a (20 percent) increase is insignificant for even the small user, and it’s certainly not insignificant for the large user,” Perkins said.
Werner acknowledged that while no one wants to see an increase in water or sewer rates, he said Middlebury consumers are getting a good bargain compared to other communities.
“Most of our water comes from Palmer Springs, the well is only 40 feet deep, it does 1,600 gallons per minute, it is very clean and low in minerals,” Werner said. “This town is so blessed to have that much water at such a shallow spot and it is very cheap to pump. You would be hard-pressed to find anyone’s rates that are anywhere near ours. We have very cheap rates.”
Finding new takers for Middlebury water is not likely to prove a viable solution for the current water and sewer budget problems — at least not in the short-term, according to Werner.
“For the budget difference we would try to make up … we would have to find a little more than 1,100 new residential users,” Werner said. “I don’t think we are going to be able to do that.”
Selectmen will continue to consider rates — and alternatives to rate increases — during the weeks ahead.