HIGHTSTOWN: Borough may raise water and sewer rates

By Amy Batista, Special Writer
HIGHTSTOWN — The Borough Council discussed increasing water and sewer rates by about 10 percent for next year during its meeting on Sept. 15.
"We have done a survey of other town rates so you can get an idea of how we stacked up against some other towns that we could get prices on for water and sewer rates," said Borough Administrator Henry Underhill. "Hopefully we wouldn’t have to change it for another three years after that."
If adopted, the rate increase would start in January.
Mr. Underhill said the borough is currently just covering expenses by keeping the rates where they are.
"Basically we’re spending everything we have to keep the rates and just covering expenses. There’s no rainy day fund," he said.
A budget report was distributed to council members prior to the meeting.
"Part of what is in there is part of the reason we’re talking about a water and sewer rate increase," he said. "The most important thing is the fund balance has declined to a point where we’re not going to generate enough to have what you have put in the last couple of years to balance the budget."
He said the council has been putting in $290,000.
"We don’t anticipate that we’re going to make $290,000 as an ending balance," he said. "We based part of that on some of the revenues that are lagging behind at this time."
Water and sewer fees are only down by $17,000 but the grey water is down $48,000, he added.
He said there has been on "more than one occasion where the plant has had a problem with taking intake of the grey water septic."
"The $17,000 I think we probably will catch up on but part of that $48,000 we’re probably not going to make up," he said. "There are probably other parts of the budget that will offset that but we will probably be a little short on the revenue from the water and sewer utility."
The thing that we have here that other towns don’t have is that 21 percent of your total revenue comes from the grey water and septic intake, he said.
Mayor Steven Kirson said that the budget for the septic and grey water "continually goes up each year."
"Is that the condition that we anticipate more volume, higher prices we will charge or a combination thereof," said Mayor Kirson.
Prices, Mr. Underhill said.
"We are purposing in this to raise it instead of all at once, each year for the next three years," he said. "So that is the only one that would change each year. The Superintendent (of Public Works) thought that if we just raised it the one time, a big jump, that it would scare away (residents) and then you would lose based on the lack of volume so we basically broke it into three years."
The water will go up one time, he added.
Council member Steve Misiura questioned what the percentage increase would be for each year.
"The overall increase is 10.9 percent based on what they are today," Mr. Underhill said. "If you notice I had the sewer part going up higher than the water part. We seem to need more expense in the sewer than on the water side."
The waterside of the plant seems to be fairly stable and not needing as much work as the sewer, he added.
"What it means to the average house is a combined increase of about $108 per year," he said.
He said the revenues and expenses between 2011 and 2014 have been "fairly modest in increases on the expense side."
"I think right now your capital and debt-service are driving some things," he said.
He said they have not added any new people and "basically the same number of employees there as the previous four years."
"We are anticipating the capital is going to go up over the next three years," he said, adding there are projects that are being discussed.
"We are trying to catch up with replacing the faulty water and sewer mains, there are water tanks to be painted," he said. "There is always work at the sewer plant it would seem."
He said studies were being conducted into ultra-violet sterilization system.
"If we can avoid it, the cost of ultra-violet my estimates from the engineer (Carmela Roberts) are $500,000 to $1 million dollars somewhere in that range," he said. "That would be on top of anything you were trying to do just to keep things running smoothly."
"We can balance the budget based for the next three years if we generate the income we think we will off those rate increases," he said.
Chief Financial Officer George Lang said it’s been about eight years since they have had an increase.
"The way you generate surplus is if your revenues you collect come higher than what you estimate," said Mr. Lang, adding that they hope the surplus from the previous budget last the following year.
We are trending now where we may not have any excess revenue, he said.
"The bottom line is where we used $292,000 this year we’re not going to have $292,000 to use as surplus in the following year which would necessitate a rate increase to balance the budget," he said.
The last surplus goes back over 10 years, he added.
"That goes back to when the Minute Maid was in operation," he said.
Mayor Kirson said since Coca-Cola left "it really hurt us."
"When Coca-Cola packed up it hurt the water department, it hurt our taxes," he said. "It was a great ratable."
If they were still here we wouldn’t be talking about a rate increase, he added.
Mayor Kirson said that in 2011 there was a "large bond approved" for $2.2 million dollars and around $2 million was used for water and sewer.
"Money had not been allocated towards water and sewer to maintain it so we recognized in 2011 that had to be done," he said.
Mr. Underhill said that the debt-service is $875,340 for 2014.
Council member Denny Hansen said that the "infrastructure is needing major dollars."
"Not just the road projects but the plant itself and there has been huge amounts of capital spent," said Ms. Hansen. "We have a lot going forward that we are going to need to deal with as well as increased Department of Environmental Protection regulations."
DEP regulations they become more restrictive year after year, Mayor Kirson said.
"I’m not asking that you take any official action tonight," Mr. Underhill said. "I’m imagining you would want to take some time to think about it and we will come back and talk about it."