Town keeps sewer rates at same level

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LIVERMORE FALLS – Selectmen voted Monday to keep the sewer rates the same this year at $45 for each unit per quarter, plus 2.75 cents per cubic foot of water used.

Auditor Ron Smith of RHR Smith & Co. recommended selectmen keep sewer rates the same, set up capital reserve funds for future maintenance and capital replacement, and develop a three-year, five-year and 10-year capital plan for the Sewer Department. He also recommended the sewer ordinance and related policies be revisited.

The department bases its sewer rates on information provided by the Livermore Falls Water District. Water district personnel read the meters and furnish this information annually to the town, Smith said.

Based on those readings, the town sets its rate for the entire year.

The town has an estimated 1,135 units to bill and generates about $204,000 in income annually from these users. The town also bills for 6.2 million cubic feet of water at a rate of 2.75 cents, which generates an additional $172,000 annually, Smith said.

The town’s philosophy, Smith said, is that the user fees are calculated to pay the debt of the Sewer Department and the operational costs of the maintenance and plant and collection system. Currently, Jay pays about 54.6 percent of the sewer treatment plant, he said.

Another piece of information that he didn’t initially know, Smith said, was that Livermore Falls has lost three of its larger users of the sewer system in the last several years: Cole Haan shoe manufacturer, Parkview Nursing Home and Central Plaza Laundromat.

This clearly has an affect on sewer use and also makes it very hard to understand all the ramifications of the closing of these businesses, he said.

Those buildings are owned or leased by others now who don’t use nearly as much of the sewer than the previous businesses.

Livermore Falls Sewer Superintendent Kent Mitchell said Monday it cost about the same to treat 300,000 gallons of wastewater as it does to treat 500,000.

The sewer treatment plant does have the capacity to treat two million gallons a day to help with future growth in both Livermore Falls and Jay. Livermore Falls doesn’t have miles and miles of roads on the system to develop though, Mitchell said. He also noted some of the infrastructure pipes in town are in poor condition with some of them installed in 1911. Mitchell also said the department needs an extra man to work part-time to help keep up with maintenance and other needs.

Smith said it is recommended that towns have about one year of debt service on its books to maintain debt repayment. At an annual cost to the town’s Sewer Department this would be about $194,696 for sewer debt. The department has three outstanding bonds and a bank note.

The unrestricted net assets total somewhere close to $475,000 in 2005, and he expects it to be about the same this year, Smith said. Sewer debt is subtracted from that amount.

Currently the town has no designated net assets for future capital replacement, Smith said.

“Your unrestricted net assets cover all maintenance and future capital replacement,” he said.

He recommended the town put money into reserves to cover future replacement costs and projects.

Smith said the reasoning is that historically towns have to match need grants at a rate of 10 percent to 20 percent.

“I’m afraid if money is not there, you would lose opportunity to access that money,” Smith said.

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