FARMINGTON — Farmington Village Corp. will hold a public hearing on a proposed water rate increase at 6:30 p.m. Monday, Aug. 12, at its office at 137 High St.

The proposed increase of 8.94 percent per quarter means the bill of a minimum water customer using 1,200 cubic feet of water or less would increase $3.95, from $44.21 quarterly to $48.16, Jane Woodman, business manager said. This is the first rate increase since 2009.

The proposed hike, which would be effective Oct. 1, represents an overall increase of $65,544 in revenue annually, she said.

The water company has sought Public Utilities Commission approval for the increase and needs to hold a hearing as part of that process.

Like everyone else, she said, higher costs of gas, heating oil and regulations for the department have taken a toll.

The PUC has changed some regulations.

Every home has a water meter but when any meter is taken out, a new lead-free model has to replace it, Woodman said. The new ones cost $120.

Meters should be replaced every so many years, Woodman said.  The older they get, the slower they run, which means the department is losing revenue.

The company is phasing out old meters and putting in new ones for its 1,600 customers. All meters at the University of Maine at Farmington have been replaced, he said.

The PUC has also changed its view of contingency funds. Previously, the water company couldn’t save money for things like major breaks or to buy large equipment, such as a backhoe.

A major break needing replacement of a line means the company has to borrow money and pay interest, she said.

Now the PUC is seeing how water companies need to save money, Woodman said.

“We don’t buy the cheapest or the most expensive but we buy local and what we can afford,” she said.

The water company has also made agreements with Vining & Sons for use of equipment in an emergency and with other area water systems, similar to mutual aid for fire departments but sharing equipment rather than manpower, she said.

Woodman said the water company hired Maine Rural Water to go through its figures and come up with a proposed rate.

“Another set of eyes have looked at it,” she said.

The company was presented with three options: A small rate increase, a 8.94 percent increase and an 18 percent increase, she said.

“We chose the middle ground so we could start tucking money aside,” she said. About half of the increase will be put in a contingency fund.

The public fire protection paid for by the town won’t rise until January.

“We didn’t want to stress the town,” she said.

A presentation with more information will be given Monday night. Customers nay contact Woodman at 778-4777.

abryant@sunjournal.com