Ins and outs of sewer fees, water treatment budget

As Mayor John Harkins proposes that residential and commercial sewer fees be increased 13% for the 2015 budget, which would take the residential rate from $375 a year to $425, taxpayers ask why.

The community is likely aware that the town took on debt of $61 million back in 2010 for a comprehensive overhaul and upgrade of its water pollution control facility on Beacon Point Road, but speakers at public hearings say they do not understand the WPC budget.

Even those who have combed through the published budget book of WPC’s revenues and expenses have questions about what means what and what goes where.

The town of Stratford’s chief administrative officer, Stephen Nocera, and Chief of Staff Marc Dillon worked with The Star to explain various parts of the WPC budget.
The Water Pollution Control Authority (WPCA), which is comprised of the 10 members of the Town Council, is expected to set the 2015 sewer fees before mid-June, but after the council resolves the municipal and education budgets by May 12.

General
Harkins is proposing a 2015 WPC expense budget of $10.7 million, a 3.8% increase over the $10.3 million in 2014.
He is also proposing a revenue budget of $10.7 million, which is 14.2% higher than the 2014 revenue budget. The 2014 revenue budget was $1 million below the expense budget, because, according to Nocera, the WPCA kept sewer fees flat with 2013 at $375. Nocera said, “Sewer use rate increases are generally necessary to ensure a reserve balance, to pay down debt service, and … to maintain the sewer plant and infrastructure around town.”

Expenses
Relatively large items in the WPC expense budget include $1 million for a 16-person payroll plus $560,000 for contracted maintenance services.

The pension fund expense line is proposed to increase 230% — from $432,000 to $1 million. This consists of the actuarial required contribution, which gradually reduces unfunded liability, according to Nocera, and the WPC’s portion of the 2013 townwide $160-million pension obligation bond. Funds budgeted for pensions have increased from 37% of bonds to 85% of bonds, which contributes to the large proposed increase this year.

The single largest expense line in the WPC budget is $2.3 million for paying bond principal, and this, Nocera said, is to pay off the $61-million facility upgrade. “Any fee increases are driven largely by the $61-million upgrade completed approximately six years ago,” Nocera said.
And $1 million goes for solid waste removal.

Paying fees to the town
Two expense items that taxpayers have publicly inquired about are a land use fee of $600,000 and a transfer to general fund of $300,000. According to Nocera, the town charges rent to units that generate revenues from user fees. (EMS is another unit that generates user fees and gets charged rent by the town.) WPC and EMS generate revenues and are “on town property that could otherwise be utilized, and [they] are therefore assessed an annual rental fee based on acreage,” said the administrative officer.

Regarding the $300,000 that WPC pays to the town’s general fund, this represents “an overhead allocation which includes finance/payroll/HR/etc. support services from the town to the WPC,” Nocera said. “This expense belongs in the WPC … because it supplants finance/payroll/HR/etc. expenses that they would incur if they had to provide those services directly.

Revenues
There are about 18,900 residential accounts that were to generate approximately $7 million in revenue for 2014. The other approximately $2.2 million is generated from commercial accounts. Commercial accounts are charged varying amounts depending on usage.

Stratford receives fees from other municipalities whose sewage flows into the Stratford system, and those fees are accounted for in the same budget line as Stratford-based commercial accounts, said Nocera. Details of the revenue that comes from other municipalities was not immediately available when requested near press time.

Fees collected by the town for connecting accounts to the town sewer system are not included in the WPC facility budget. Nocera explained that these fees are accounted for in a sewer revolving fund in the capital projects budget, which is the same budget where expenses related to sewer connections are accounted for.

Fees in other towns
Town Council Chairman and WPCA member Joe Kubic said he was checking sewer fees in other towns around the state so he could compare Stratford’s to them. He said there is little guidance from that survey, because rates vary significantly and because each town or city has its own infrastructure issues.

Stratford has a population of about 52,000 and a current residential sewer fee of $375. Milford has a population of 52,000 and a sewer fee of $306; West Haven a population of 55,000 and a fee of $408; Middletown a population of 47,000 and a fee of $276; and Trumbull a population of 36,000 and a sewer fee of $679. (Sewer fees reported by Tighe & Bond.)

Part of the Stratford’s upgraded water treatment plant that sits on nine acres near Birdseye docks. Greg Reilly photo.

Part of the Stratford’s upgraded water treatment plant that sits on nine acres near Birdseye docks. Greg Reilly photo.

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