AUBURN — Losing the Auburn Sewer District’s largest customer, Cascades Auburn Fiber, will likely mean rate increases in 2017, Superintendent Sid Hazelton told city councilors Monday night.

“They were our No. 1 water and sewer customer,” Hazelton said at the council’s workshop meeting. “We will review our operations to minimize impact, but I don’t think it will come as a big surprise. Water and sewer rates will rise because of this shortfall — this is a very big shortfall for us.”

Councilors urged sewer district officials to do what they could to keep that from happening.

“I would urge the trustees to leave no stone unturned in terms of looking at creative ways to reduce costs,” Councilor Bob Stone said. “I think the citizens, or ratepayers, know you are looking at a 13 percent reduction in sewer revenues and 5 percent in water. It’s a great opportunity to really look at everything in business, a combination of generating more revenues, reducing costs and taking advantage of other resources that might be available in city government.”

Hazelton said the sewer district looks to lose as much as $500,000 after the Cascades plant closed last week. The water district looks to lose about $117,000.

The plant, on Lewiston Junction Road and just west of the Auburn-Lewiston Municipal Airport, has long been one of the sewer district’s biggest customers, responsible for roughly one-eighth of the district’s annual revenues.

Cascades Inc. closed the Auburn operation last week, citing a failing market for its printing and writing paper and their de-inked paper pulp.

The Auburn mill made green packaging and tissue paper products and employed 45 people.

Residential sewer customers pay a minimum of $47.16 every three months, plus $3.16 for 748 gallons.

Hazelton said the sewer district has not calculated what the looming revenue cut will mean for budget cuts or sewer rates and said ratepayers should not see changes until 2017.

“This news is new to us — we only found out last month,” Hazelton said. “We have revenue projects and we know where things are headed, but we have not had a formal meeting with our own trustees yet on this issue.”

Sewer trustees are scheduled to discuss the closing and impact on fees at their monthly meeting at 4 p.m. Tuesday, July 19, in the district offices at 268 Court St.

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