AUBURN – The first water rate increase in three years won approval from Water District trustees Wednesday, despite concerns that the 8 percent hike might not be enough.
Findings by Horton, MacFarland & Vessey, an auditing firm from Ellsworth that specializes in utility rate analysis, called for a 13 percent rate increase.
General Manager Norm Lamie recommended the 8 percent increase Wednesday, saying that he re-evaluated spending for debt service this year with bond interest payments reduced significantly due to refinancing. He also said he anticipates higher sales in 2006 due to new construction, a planned development of a trailer park and business expansions. He said he feels the district could hold the rate increase to 8 percent for two years.
“There is no contingency (fund for emergency expenses), but I’m comfortable with 8 percent,” Lamie said.
Treasurer William Harnden was cautious that 8 percent might not be enough because the district could show a year-end loss that might result in higher bond interest rates in the future.
Trustee K.C. Geiger said he would have been comfortable with the increase set a little higher than 8 percent. “I would like to have a little bit of a cushion,” he said.
The increase was necessitated by distribution system improvements over the past three years, including projects on Court, Main and Cook streets, and anticipated projects for this year. Some of the improvements eliminated dirty water from taps caused by aging water mains. Temporary financing for the projects now must be refinanced. Lamie said the increase would fund a refinancing package.
Trustees voted unanimously to accept Lamie’s 8 percent recommendation.
A public hearing on the rate increase is scheduled for 7 p.m. on April 20 at City Hall. Letters notifying water customers of the hearing will be mailed March 30.
New rates would become effective June 1.
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