Water Industry News

Holyoke panel readying sewer rate increase plan

Friday, April 14, 2006
HOLYOKE - The Board of Public Works has begun taking steps to adopt a new sewer rate, following the City Council's rejection last week of an 11-month-old proposal to increase sewer fees by 50 percent.

The defunct proposal would have raised the sewer rate from $1.95 to $2.94 per 1,000 gallons of metered water, the first rate increase since 1990.

Under a tentative schedule adopted Wednesday, the BPW will review financial data and select a new rate increase plan when it meets April 24, and schedule a public hearing during the first week in May.

Barring some obstacle, Public Works Superintendent William D. Fuqua told board members, they could adopt a new rate at their May 8 meeting and get a new rate hike proposal into the council's hands by May 16 for its approval.

Any such rate proposal, though, would be sent to the council's Ordinance Committee for review before it is returned to the full council. At best, Fuqua said, the council could take a final vote on June 6 or June 20, before it adjourns until Aug. 1.

Fuqua said it has become clear that the BPW cannot count on the council to approve borrowing $6 million from the State Revolving Fund at 2 percent interest to help pay for $24 million of upgrades and modernization at the wastewater treatment plant.

In 2004, the council approved borrowing $17.9 million from the same fund to pay for construction of a million-gallon combined sewer overflow tank designed to stop the discharge of untreated sewage and stormwater runoff into the Connecticut River.

But last month, the council refused to approve the additional $6 million borrowing for other plant upgrades, and by voice vote sent the measure back to its Finance Committee for more review.

Under terms of its 20-year contract with the Aquarion Operating Services Co. of Bridgeport, Conn. - hired in July to design and build the upgrades - the city's other option is to borrow the $6 million from the company and repay it at 6 percent.

Fuqua has said the cheaper state money would save rate-payers $3 million over 20 years, which amounts to about 30 cents on the sewer rate, or an average of about $30 a year per homeowner. Any new rate proposal, he said, must realistically factor in the more expensive financing.

At Wednesday's BPW meeting, Chairman Joseph E. Morrison told Fuqua the board should bring two rate proposals to the hearing: one with and one without the 2 percent borrowing.

"I think we should bring in both rates to the public hearing so that people can see the difference," said Morrison. "There's no reason to be spending that 30 extra cents."

A final date for the public hearing will be announced soon, Fuqua said.

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