JAY – The Maine Public Utilities Commission approved a 10.75 percent rate hike Tuesday for the North Jay Water District to go into effect Oct. 1. It took several months of discussion between parties to settle the contested increase.

The commission had suspended the rate increase in March after district customers petitioned the PUC to investigate several matters, including whether the district was operating efficiently and using sound management practices.

Under the proposed rate increase, a residential customer’s base rate would increase an estimated $6 to about $66 for the first 1,000 cubic feet of water. That’s about 750 gallons.

It is the second rate hike since 2004, when residential rates increased 33.4 percent, from $46 to $60.

The new rate covers residential, commercial, public authorities, private and public fire protection.

“I don’t object, but I don’t agree with the management process that has led us to the need for the rate increase,” said Jennifer Easter.

Easter, of North Jay and a district customer, was the lead petitioner in the case and worked with PUC Public Advocate Bill Black and representatives of the district and state to resolve the matter.

Black filed a recommendation with the PUC to settle the case July 17, and to approve the rate hike after a thorough examination of the district’s finances and expenses, Black said Aug. 2.

After a review of material, they found that some downward expense projections were outweighed by some of the misassumptions that appear in the water district’s anticipated revenue.

Black felt it would have been reasonable to decrease several accounts by a total of $4,034, but after further investigation found the district had over estimated revenues.

“We felt it was smarter to let the rates go into effect as filed,” Black said.

According to paperwork answering a hearing examiner’s questions, the district’s accountant, Gordon LaBay, who has since moved to California, had completed the form for a rate increase before the 2005 financial statements were ready and falsely assumed that $4,000 received for an insurance adjustment in 2004 was for a re-occurring rental in 2005.

District trustees had rejected LaBay’s recommendation to go for a higher rate increase to minimize the impact on its customer base, filed documents state.

District trustees asked that loss of a commercial customer in 2005, which equated to 11 percent of the district’s annual income, and a $5,000 increase in a principal debt service payment be weighed as the smaller increase was being considered. Those two items represent a $24,484 shortfall, documents state.

Superintendent Richard Jackson said Tuesday that the accountant figures out projected revenues and expenses using the last three years of operating expenses and what the district says it needs for money.

“We did the best we could with the information we had,” Jackson said.

It’s a projection of expenses and revenues, he said, just like a town budget for a new year.

“I cannot project how many breaks there will be,” he said. “It could be five, it could be 20.”

Jackson, who deals with the maintenance of the water system, said customers need to call if they have questions and should also attend the annual meeting.

“We cannot read minds,” he said.

Petitioner Easter thanked everyone who helped with the process including, customers in North Jay and Public Utility Commission staff.

She hopes that others will continue to stay involved, attend annual meetings and ask questions, she said.

“We can’t hesitate to question as customers,” she said.

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