WESTERLY — The Board of Finance learned Tuesday of several high cost projects needed to keep the town's water and sewer services working properly, during a review of the two department's proposed budgets for 2019-20.
The sewer system will require $992,645 worth of capital projects to upgrade the main plant and off-site pump station in 2019-20, according to estimates developed by Jacobs Engineering Group, the Texas-based firm that operates the municipal wastewater treatment plant. An additional $5.5 million worth of projects will be needed for 2020-23, according to the company's estimates.
Additionally, Town Manager J. Mark Rooney said his staff is seeking grant funds to cover the cost of building a flood wall around the plant to protect it from potential storms.
The Water Department, which has about 16,000 customers, will pay for a $1.3 million water line replacement project on Canal Street with money in its current budget, but is looking at $300,000 in water pipe rehabilitation projects on Valley Drive and First Street in 2019-20. The department also learned this week that the state plans to overhaul Potter Hill Road in the near future.
The Water Department tries to schedule capital projects prior to road projects to avoid having to disturb newly paved roads. The cost of replacing the aging water line on Potter Hill Road is estimated at $2.5 million, said Bill Beauregard, the town's assistant director of public works. It is unclear exactly when the state will commence the Potter Hill Road project, Beauregard said.
On Tuesday the finance board approved new rates for both water and sewer services. The base rate for residential customers of the water department would remain at $88 under a recommendation approved unanimously by the board, but the overage charge would increase 10 percent to $4.06 per 100 cubic feet (750 gallons) for consumption over a set minimum.
The commercial overage rate would increase to $5.06 per 100 cubic feet. The rates were recommended by Bill Beauregard, the town's assistant director of public works. The overage rate generally affects water customers who have sprinkler systems for their yards, Beauregard said.
The rate change would support a proposed $5.6 million budget, a 3.17 percent increase from the current Water Department spending plan.
The Water Department currently maintains a fund balance or surplus of about $4 million. Between the projects that are scheduled for the next fiscal year and the work on Potter Hill Road, the fund balance would be reduced to $1 million — a level that officials said is too low.
"You might have to look at base rate change in the very near future," said Kenneth Swain, finance board chairman.
Paula Brouillette, a member of the board, said the projects point to a need for better long-range planning for capital projects.
Rooney said the list of projects needed for both the water and the sewer systems points to an approach used by town officials in the past. "It's a lot of deferred maintenance," he said.
Public Works Director Donald Ouellette said municipalities throughout the country are faced with the dilemma posed by the cost of replacing aging infrastructure.
The board struggled to reach a solution for how to approach the sewer department budget but ultimately settled on recommending an increase in the ad valorem tax to 54 cents from its current 47 cents and using $637,780 from the department's surplus to offset the proposed $5.20 million budget, a 5.2 percent increase from the current budget.
Rooney said he planned to stick to his recommended 60 cent ad valorem tax increase when he presents the budgets to the Town Council. The finance board serves in an advisory role to the Town Council, which has final authority over both the water and sewer budgets.
Swain said he was reluctant to increase the ad valorem tax at a rate higher than the one recommended by the board, because customers will experience an increase in the assessed value of their homes as result of a real estate revaluation that is nearing completion. Additionally, Swain said, the Town Council, contrary to Rooney's recommendation, increased the amount the water and sewer departments pay toward the cost of various town positions by about $120,000.
"The council made money here because they wanted to add money to the general fund," Swain said.