HALLOWELL — Rates for customers in the water district here may increase by 30 percent following a proposal sent to the Public Utilities Commission last month.
The increase also falls to taxpayers, who will be responsible for a 34 percent increase in the Fire Department’s share of operating costs for the district. If approved by the PUC this month, the change would take effect on Jan. 1, 2019.
The minimum charge for Hallowell Water District customers now is $61 per quarter, but that would rise to $79.30 per quarter. Annually, that is a $73.20 increase, or $6.10 a month.
District Superintendent Zach Lovely said the Fire Department is responsible for 30 percent of the total operating cost for the district because of its need for reliable water. He said a 30 percent operating cost is a standard between most public fire protection agencies and water districts. To maintain 30 percent of operating costs, the Fire Department’s share of operating costs increased by about $43,000 over two years, to be funded by taxpayers.
Lovely said 50 percent to 60 percent of the increase is a result of the ongoing reconstruction of Water Street. The Maine Department of Transportation recommended working on water mains while it was tearing up pavement to rebuild the roadway. Lovely said the project afforded the district the best opportunity to replace the water main, which was placed in 1898.
Lovely said water customers are charged a minimum fee for the use of 1,200 cubic feet of water being supplied to their property and then charged a rate per gallon after that if more water is used. The rate becomes higher once use reaches certain thresholds in water usage. He said average residential customers use about 1,300 cubic feet.
The district includes 870 customers, mostly from Hallowell, but some from Farmingdale and Chelsea.
A public hearing on the rate increase was held at the July 24 meeting of the district’s board of trustees, but the proposal was sent to the PUC on June 14, according to PUC Director of Consumer Assistance Derek Davidson. Davidson said sending the proposal in before the public meeting is normal, as there is a state statute that consumer-owned utility districts need to follow for a rate increase.
The PUC does little more than review the district’s calculations and oversee that the statute is being followed. The only way the commission would investigate the rate increase is if 15 percent of the customer base — or, for larger districts, 1,000 customers — signed a petition asking for a review. Customers have 30 days — in this case until Aug. 23 — to file a petition. After that, the commission would approve the rate increase.
Only one person attended the public hearing, Lovely said, and that person’s only concern was the volume of water that is used for the minimum rate.
He said the water is the least expensive part of the equation for the rate structure and the volume of 1,200 cubic feet was calculated to cover the cost of delivering water to the customer.
“The infrastructure itself and the front office stuff is the biggest expense,” he said.
Patti Burnett, owner of Dom’s Barber Shop, said her July bill came with a notification about the increase. She said she was at peace with the increase, especially with improvements to infrastructure downtown.
“I’m a business person, so I know things cost,” she said during a phone call Thursday. “They’re doing all this construction, and that comes with a cost.”
Lovely said the rate increase was enough to cover the next three to five years without another increase. After speaking with accountants about the increase, which he said could have been as much as 45 percent, district officials determined 30 percent to be sufficient to keep water prices down for customers and maintain the district’s infrastructure. Lovely said the district has not been putting money away effectively for maintenance projects, such as painting tanks every 20 years to ensure their longevity.
“We were trying to do one rate increase to cover three to five years,” he said. “We put some money aside to do some maintenance on the tanks.”
DOT is working on stormwater drainage from the large hill in Hallowell. Lovely said granite blocks used in the drainage system needed to be replaced because they were more than 100 years old.
Lovely said water rates will not decrease when the reconstruction is done because the district had to bond $1.2 million for the project.
Further bonding for the DOT Water Street project included $600,000 of a $2.36 million bond approved by Hallowell voters last year.
Sam Shepherd — 621-5666
sshepherd@centralmaine.com
Twitter: @SamShepME
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