RICHMOND — Members of the Town Council voted at a public hearing during their Feb. 5 meeting to amend the town’s water system ordinance to allow an increase in water rates.
A second amendment, also approved, will add a requirement for the town’s approval of water-main and water-pipe plans as well as water-main extensions.
Finance Director Kelli Russ explained that the rate increase was necessary because the water system is not in the municipal budget but, rather, a separate fund that cannot sustain a loss.
"Our rate is too low based on our expenses,” she said. “We’ve had some years of losses and it’s an enterprise fund, which means it’s run like a business. That fund is not supposed to be supplemented with funds from the taxpayers, so in order to make sure that the fund is self-sustaining, we determined that it was necessary to increase the rates per gallon.”
The current base water rates are $.0031 per gallon for the first 30,000 gallons and $.0035 per gallon for more than 30,000 gallons.
After researching the rates charged by other towns, Russ said the new rates would be $.0050 per gallon for between one and 30,000 gallons, and $.0060 per gallon for more than 30,000 gallons.
Russ said she also looked at how much the increase would affect the town's coffers. Most Richmond residents are on private wells and only 260 homes and businesses are connected to town water.
“We calculated the entire bill per person to see what that change in rate would do to each individual and whether or not we would raise enough income to bring us out of a loss situation, and it does appear that that would be beneficial to us,” she said.
The town is anticipating having to perform work on its water system that could include chlorination. The rate increase would leave sufficient money in the account’s fund balance to cover repairs and treatments.
“You are definitely okay to cover expenses because you have a fund balance, but you don’t want to keep dipping into your fund balance with losses because then it won’t be there to maintain the property and your assets,” Russ said.
Council member Paul Michaud asked how much the rate increase would add to the average customer’s water bill. Water customers are billed on a quarterly basis. Russ said some people would pay more but others would see lower bills.
“I don’t know from a percentage standpoint,” Russ said. “… It really depends on what they use. It was all over the board. Some people went down, some people went up. When they’re being billed $30, some people might double, so they might get a $60 bill instead of a $30 bill for a quarter for water use.”
One of the town's largest water consumers is the Cumberland Farms store on Route 138. The car wash, which is now closed, was also a heavy water user.
“They are a drain to your system overall, so it’s not odd that we should increase their rate,” Russ said.
The new rates will go into effect in April.
“There’s a whole computer upgrade that needs to take place to make that change,” Russ said.