Vergennes sewer rates expected to increase
VERGENNES — Vergennes aldermen at their May 24 meeting said it was “inevitable” that city sewer rates would rise, probably this year, but if not this year certainly by next year.
City Manager Mel Hawley told council members that during the past couple of years he has used a year-end fund balance in the sewer budget that has been well over $100,000 to keep rates stable, but that fund balance now projects to be around $40,000 at the end of this fiscal year, June 30.
“At some point, you have to stop doing that,” Hawley said.
Also, Hawley pointed out that the council in April approved the hire of a third fulltime employee in the sewer department, a move that all agreed could allow workers the time to begin to assess the collection system for weaknesses that have led to the overflows into Otter Creek that have plagued Vergennes in recent years.
With rates that have not changed since 2006, Hawley is now projecting a shortfall of about $95,000 at the end of the fiscal year that he said must be addressed through higher rates, spending cuts or both.
And the only place to look at cuts, he said, are on capital spending items, one of which is intended to fund replacement of older clay sewer lines, a potential source of groundwater infiltration that is a major source of the overflow problem.
That leaves a $20,000 line item for capital improvements, Hawley said, not enough with the smaller projected fund balance to address the issue.
“I’m not at this point recommending numbers,” Hawley said. “I think there’s some discussion that needs to be held.”
In 2006, the basic single-unit sewer charge was raised to $350, which since 2011 has been payable in quarterly installments of $87.50. Mayor Bill Benton said a $50 increase would “almost cover the deficit” and that he “didn’t have a problem with that.”
Benton also said some sort of increase is on the way.
“It’s inevitable, whether it’s this year or next year,” Benton said. “And if it’s next year, it’s going to be more.”
Aldermen were also reluctant to make cuts to the $20,000 line item, especially with the third employee allowing time for research to be done that could uncover needed projects.
“In six months we’re going to need it,” said Alderman Mark Koenig, while Lynn Donnelly added, “I’d rather see another $5 on the rate.”
Alderman noted that a $50 increase would be the equivalent of less than a 1.5 percent increase per year going back a decade to the city’s most recent sewer rate hike.
Hawley said he would research the question and make a recommendation at an upcoming meeting.
On the Wednesday morning following the Tuesday meeting, Hawley said he would like to propose a rate hike that would once again not have to be revisited for many years.
He cited a specific date: The sewer budget, which is user-supported and does not collect property tax funds, is making an annual payment of $123,405 on a 20-year, $2.56 million bond that supported upgrades to the sewer plant made in 2001 and 2002. The final payment will be made on Nov. 1, 2022, and Hawley would like stable rates until then.
“Whatever we increase it to, I want to be fine through 2022,” he said.
Hawley will be making calculations to present to aldermen.
“I’m actually going to do kind of a budget, a six-year plan, to see how these numbers crank out,” he said.
Andy Kirkaldy may be reached at [email protected].
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