PEPPERELL — The Board of Public Works (BPW) approved an 8 percent increase in water rates and a 7 percent sewer hike for 2006 following a public hearing last week during which revenue decreases, deferred maintenance, petroleum costs and salary hikes were blamed for the boost.
A previous long-range plan had estimated 5 percent increases for 2006 and 2007.
The vote was unanimous by commissioners George Clark, Frederick Farmer and Louis Shattuck. Lewis Lunn’s arrival had been delayed and Paul Tierney was absent. No residents were in attendance.
DPW Director Robert Lee read a Nov. 17 memo from Sewer and Wastewater Division Superintendent Mark Richardson that detailed 2005 revenue shortfalls of $25,341 in water use, and $76,068 in sewer income, a respective 3.1 and 9.5 percent drop.
As a result some maintenance items were delayed. Meanwhile, fuel charges including diesel, gasoline and propane have risen 33 percent. The cost of petroleum-based chemicals is increasing on a weekly basis, and is expected to rise 30 percent. Shipping and freight charges have increased.
Starting this spring, the wastewater treatment plant will begin adding chemicals to remove phosphorous in the water which is expected to add $10,000 to $12,000 to the budget. The cost of existing chemical usage is expected to double to $4,000.
Union contract changes that increase weekly on-call time from 8 to 10 hours and a $100 increase in the clothing allowance have added to expenses.
Richardson warned that the sewer and waste division’s fiscal 2007 budget might increase 17 percent to more than $2 million which includes more than $1 million in debt payments.
In a Dec. 1 memo to the BPW, Richardson emphasized that the two divisions operate as enterprise funds with no tax-based subsidy.
In 2001 the Sewer Department, now Sewer and Wastewater Division, initiated extensive budget cuts to control spending and balance the budget. Many of the cuts, he wrote, were necessary to off-set lack of sewer use revenues. Therefore sewer rates were raised to balance the budget.
Frugality comes at a cost, Richardson wrote, evidenced by the pushing off of needed maintenance.
He updated fiscal 2005 revenue losses that now stand at $41,371 in the water, and $114,352 in the sewer and wastewater divisions.
Last year the water division reduced mid-year spending by $111,897. The sewer and wastewater division cut spending by $113,794. Some of the reduced spending was done by allocating some expenditure under existing projects.
“Offsets can only be done if projects are allocated,” Lee said. “The water division is in a good spot although free cash is limited.”
“We’ve studied this for several months now,” said BPW Chairman George Clark.
Farmer asked if the 25 percent cost figures paid by Groton in the two town’s sewer agreement are included in the projections, and they are.
Richardson’s Dec. 1 memo re-emphasized that estimated revenues are just estimates, and many variables can change the picture over a short period of time and have a major impact on balancing the budget.
