CONNEAUT — A 20 percent sewer rate increase Conneaut administrators say is desperately needed to maintain the municipal waste water fund faces opposition from some City Council members.
Legislation authorizing the increase was moved to a second reading last week, and — based on Monday night's work session — the passing days have only raised more questions among skeptics.
At issue is a hike administrators say is required to salvage the sewage plant fund. The account is an enterprise fund, meaning it subsists solely on money earned from customers.
The day-to-day operation of the sewage plant and collection system is not the problem, council has been told. In fact, a sizable surplus is projected.
“Operations are doing fine,” Finance Director John Williams said Monday.
Instead, it's the large amount of debt the fund has attracted over many years that has caused the budgetary pinch. The city is still paying off loans for treatment plant improvement projects in 1971 and 1987, as well as equipment purchases.
The debt level has come to the attention of various state agencies that loaned the city money, Williams said. The agencies are worried the city's sewer rates aren't sufficient to cover the debut service, he said.
Officials have said a 20 percent hike in 2010 is needed to reduce the debt to an acceptable level. Some council members say this council has inherited a problem that has festered for years.
“Our backs are against a wall,” said Ward 3 Councilman Greg Mooney.
Ward 4 Councilman Tony Julio said past councils have been “reactive, not proactive” to the wastewater enterprise fund problem. “It's been building over the years, and we have to make the decision,” he said.
Others say they will have a tough time supporting the rate hike. Ward 2 Councilman Charles Lewis was angry that a sizable amount of debt was added to the fund in 2009. He pointed out the six-figure purchase of a sewer-jet machine used to blast away clogs in storm and sanitary sewer lines.
Lewis said he urged the city to delay that purchase a year or two and keep the city's old sewer jet, only to be rebuffed. “We've shifted a lot of burden to this fund, and now we have to stick it to the people,” he said.
Ward 1 Councilman Dave Campbell said the city should consider cutting expenses rather than impose a double-digit rate hike. “Twenty percent is a doozy,” he said.
Councilman-at-Large Robert Naylor asked administrators to prepare options to a 20 percent hike for council's review in advance of Monday's regular meeting. While some cuts are possible, no amount of slashing can make up the revenue the proposed rate hike would earn, administrators said.
"We would need some significant savings to avoid (the 20 percent rate increase)," Williams said.
The city cannot use the rate hike money to pay down on the debt, thereby reducing interest payments, because some state loans forbid pre-payment, Williams said.
A few weeks ago, administrators said the city is pumping 5 million gallons of water less per month than it did five years ago.
The 2010 budget council approved last week includes the sewer rate hike, so any revision to that plan must come quickly, said City Manager Robert Schaumleffel Jr.
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