Towanda Water And Sewer Rates To Increase 4 Percent [Daily Review, The (PA)]

TOWANDA - The economy and increased costs are being blamed for an upcoming water and sewage rate hike in the Towanda area.

The Towanda Municipal Authority recently adopted a $6.8 million budget for 2012 which raises its water rates by 4 percent and its sewer rates by 2 to 4 percent.

The rate increase is needed due to the increased costs that the authority is facing across the board, including a 9 percent increase in the cost of employees' health insurance, the increased cost of workmen's compensation insurance, wage increases, an increase in the contribution to the employees' pension fund, and higher electricity costs, Towanda Municipal Authority Manager Tom Fairchild Jr. said at Friday's meeting of the board of directors of the authority.

Noting that the consumer price index increased by 4 percent over the past year, Fairchild said: "I feel it's prudent that at least we keep up with inflation."

The budget and the rate increases were adopted by unanimous votes of the Towanda Municipal Authority's board of directors on Friday. The rate increase will go into effect on Jan. 1, said Mary Ann Harris, recording secretary of the Towanda Municipal Authority.

The Towanda Municipal Authority owns and operates the Towanda water and sewer systems.

The water rate will increase from $3.63 per 1,000 gallons to $3.78 per 1,000 gallons, a 4 percent increase, Fairchild said.

The "regular" sewer rate will increase from $8.10 per 1,000 gallons to $8.42 per 1,000 gallons, also a 4 percent increase, he said.

However, customers in the Route 220 Sewer District will see their sewer rate increase from $8.48 per 1,000 gallons to $8.65 per 1,000 gallons, which is a 2 percent increase, he said.

The Route 220 Sewer District includes Monroe Borough, the homes and businesses between Monroe Borough and the Chesapeake Energy office (former Ames department store) in Towanda Township, and homes and businesses in the Crystal Springs area in North Towanda Township.

The Towanda Municipal Authority's bulk charge for treating the Wysox Township Municipal Authority's sewage will increase by 4 percent, as will the authority's charge for supplying New Albany Borough with bulk water, he said.

Meter charges, which are sometimes called a base rate, are not changing, Fairchild said. Customers who are on both municipal water and municipal sewer pay a water usage charge, a sewer usage charge, and a meter charge, he said.

Due to the 4 percent increase, the monthly water bill of the average household, which uses 5,400 gallons of water per month, will rise from $24.68 to $25.49, an increase of 81 cents, Fairchild said. That same average household, based on a 4 percent sewer rate increase, will also see its monthly sewer bill increase from $43.74 to $45.47, an increase of $1.73, he said.

At Friday's meeting, Towanda Municipal Authority member Ralph Park initially suggested that the authority use revenue from its bulk water sales to gas drilling companies to avoid a water and sewer rate increase for businesses and residences.

However, Fairchild said the revenue from the bulk water sales to gas companies is needed for other purposes.

For example, the authority used a total of $507,000 from the water sales in 2010 and 2011 to help pay the debt service on a $10.5 million upgrade to the authority's sewage treatment plant that was completed several years ago, he said.

The amount of debt service that the authority had to pay for the project peaked this year, and will now slowly drop off, he said.

In addition, the authority will be using over $800,000 from the bulk water sales to help pay for the estimated $1.42 million the authority will face in 2012 in developing additional water sources, Fairchild said. The $1.42 million is for land acquisition and preliminary development costs for new wells, he said. The authority needs to develop "a couple" of additional wells to use as an emergency backup, in case a problem developed with one of its existing water sources, and to accommodate the increased commercial and residential development that is occurring in the Towanda area, he explained.

The authority already used $250,000 from the bulk water sales in 2011 for preliminary costs associated with developing additional wells, he said.

The authority has not chosen the site for the new wells but is considering its 15-acre site in North Towanda Township, where its two wells are now located, and is also looking at the Hollenback property on Leisure Drive in Wysox Township, he said.

Revenue from the bulk water sales has also been used to make emergency repairs resulting from Tropical Storm Lee, including $380,000 to repair four water main breaks between Laddsburg and Monroeton, he said.

Damage to the sewage treatment plant from Tropical Storm Lee amounted to $590,000, he said. Other damage sustained by the authority's sewer system from Tropical Storm Lee included $77,000 to the Fox Chase lift station and $18,000 to the Crystal Spring pump station, he said.

Fairchild said he hoped the cost of all the damage to the Towanda water and sewer systems would be reimbursed by FEMA, PEMA and the insurance company payouts. However, he said he is not counting on a 100 percent reimbursement.

For example, Fairchild said that, of the $380,000 spent on the water main breaks, he is only budgeting a reimbursement of $300,000.

Fairchild said the amount of revenue the authority receives from bulk water sales to gas companies has been increasing since the sales started a few years ago.

He said he anticipates that by the end of this year, the authority will have received $850,000 in revenue from bulk water sales to gas companies in 2011.

However, Fairchild said he did not know how long the bulk water sales will last, and therefore had built only $400,000 in revenue from the bulk water sales into the 2012 budget. "If we do better than that, then we'll be able to keep rates stable into the future," he said.

The last time the authority's water rate was raised was 2008, he said. The water rate was decreased by 10 percent in 2009, in response to the bulk water sales to gas companies.

The last time the authority's sewer rates were raised was two years ago.

James Loewenstein can be reached at (570) 265-1633; or email: [email protected].