DIXFIELD — The Board of Selectmen received six different proposals from Town Manager Carlo Puiia for raising the town’s sewer rates over the next five years to match an increase in sewer expenses.
Puiia told the selectmen during Monday evening’s board meeting that “if you look at the revenue side of the 2015 sewer budget, there should be some concern about the amount of revenues coming in versus your expenses.”
Puiia explained to the board that a majority of increase in the sewer expenses came from the bonds the town took out to pay for the $1.8 million upgrade to water, sewer and drainage systems on High, Pine and North streets.
The project, approved by voters during a special town meeting in July 2013, would replace old galvanized pipes that are in danger of breaking. The money would pay for water and sewer line replacements, road reconstruction, engineering and design costs, transaction costs and other expenses.
In order to pay for the project, the town applied for $1 million from the Maine Bond Bank, $110,000 from the Clean Water State Revolving Fund and $676,000 from the Drinking Water State Revolving Fund.
Puiia told the board and residents that the bond principal for the bonds is $55,728, and the interest on the bonds is $31,901 for the 2015 budget.
“That creates an additional $87,000 for a budget that was already $198,000,” Puiia said. “What I’ve tried to do is give you some options about how you can approach the situation about raising your revenues. In other words, you’ll have to look at the sewer rates and adjust them to meet your revenue goals.”
On Thursday afternoon, Puiia said that the board is currently reviewing the High, Pine and North Street project to see if any of the bond money is being slated for storm water.
“If it was, that would relieve the sewer users of a portion of that debt,” Puiia said. “It’s a big project. If it turns out that some of the money is being used in that project to deal with storm water, then we could be looking at some lower numbers.”
Dixfield has 662 sewer users.
Resident Dan McKay asked Puiia what the current sewer rate was for Dixfield.
“I believe it’s about $64 quarterly right now, and by the end of five years, it would be somewhere around $115 or $120,” Puiia said.
The revenue portion of the town’s sewer budget is currently $200,000 a year, Puiia said, adding that in order to get the town back into good shape, the town would have to raise $1.6 million in revenue over a five-year period.
Puiia provided the selectmen with six different proposals for raising the sewer rate, with some proposals increasing the rate at a slower pace than others.
One option, Puiia said, was to raise the sewer revenue from $200,000 to $250,000 in 2015, from $250,000 to $300,000 in 2016, and then from $300,000 to $350,000 in 2017 where it would stay for the next three years.
“Another option is to raise it from $200,000 to $275,000 in the first year, and then raise the revenue $25,000 for the next four years,” Puiia said. “The goal for the town is $350,000. If you’re running a business, you don’t want to lose money. You don’t want the town of Dixfield to lose money. In order to meet those revenue goals, the selectmen have to address the situation, and in order to do that, the sewer rates have to increase. That is as simple as it gets.”
Board of Selectmen Chairman Scott Belskis clarified to residents that the sewer rate increase that occurred in 2012 was to cover a different increase in expenses, which has since been paid off.
“This new rate increase is to cover additional debt that was incurred recently,” Belskis said.
Whittemore said that the debt from the bonds wasn’t “100 percent the reason there’s an increase in the sewer expense.”
Puiia said that there was also an increase in “some of the fees we pay,” but that the expense increase was “predominantly the principal and interest on the bonds the town took out.”
Resident Norine Clarke said that when the town held a public hearing in 2012 to discuss a hike in the sewer rates, “we were told by the auditor that the sewer rate should go up to 25 percent to leave us in good standing.”
“A compromise was made, and it only went up by 15 percent,” Clarke continued. “People were told, everybody complained that they wouldn’t be able to afford it, so the town went with a 15 percent increase, and now we’re right back where we started. We didn’t really gain any ground with the 15 percent, and I’m not sure how much we would’ve gained if we had originally increased it by 25 percent.”
Puiia said that the selectmen could review the proposals and make a decision at a later board meeting.
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