PWD seeks rate hike to offset costs, revenue drop

The Passamaquoddy Water District (PWD) is seeking a water rate increase because of increased operating expenses and revenue losses. A public hearing on the revised rate schedules will be held on Monday, August 20, at 6:30 p.m. at Shead High School in Eastport.

The district is looking for an additional $140,556 in annual revenue. Although there was a rate increase of approximately 20% in 2003, PWD Manager Nancy Seeley says that operating expenses to meet the requirements of the Safe Drinking Water Act have been increasing, while revenue is decreasing, because of the loss of industrial and commercial customers and the increase in the number of seasonal customers. The PWD had a loss of $49,126 in 2006, and a greater loss will be experienced this year unless there is a rate increase, she says. The proposed estimated increases by customer class are as follows: residential -- 20.8%, $69,530; commercial -- 20.8%, $6,108; industrial -- 20.8%, $1,243; public authorities -- 20.8%, $7,028; public fire protection -- 26.3%, $47,632; private fire protection -- 24.2%, $9,015.

Seeley points out that Eastport has lost a number of industrial users, including Gates Formed Fiber Products and BASF, with Phoenix Salmon now only using the minimum amount with the closure of its processing plant. At the same time, revenue from residential customers has decreased because there are more seasonal customers who are only charged the minimum of $318 a year.

Operating expenses are increasing to meet the testing requirements of the Safe Drinking Water Act, Seeley says. "We're required to do more testing than we ever did." The annual cost for testing by engineers and for auditors and a generator is $59,000. Included in that amount is the quarterly calibration of the treatment plant's telemetry system, which costs $25,000 a year. At least $5,000 a year is spent on having the manufacturer maintain the equipment for chlorine dioxide pretreatment of the water. Rodney Hanscom, an engineer from the Drinking Water Program of the Maine Department of Health and Human Services, states in a July 18 letter to the PWD that the 65 treatment classification points is by far the highest point total of any treatment facility in the north/central Maine district and "reflects the extreme level of complexity and sophistication involved in treating a difficult source such as Boyden Stream." Seeley notes that the stream is shallow and has a lot of algae, and the water from Boyden Lake has a high level of organic compounds and a high turbidity.

The PWD also has increased debt service costs, as the water mains in Eastport are being replaced. Although the PWD will not have to repay 75% of a recent State Revolving Fund loan for water main replacement work, the district still has to pay $18,000 a year over the 30 years of the loan.

Seeley agrees that the timing of the proposed increase may not be good, with some property owners facing significant tax increases following the city's revaluation of property. "It does seem like a double whammy," she notes. However, concerning the proposed water rate increase she adds, "But it's needed. We can't operate without an increase." She hopes that customers will come to the August 20 meeting "and get all of the facts before they make a judgment."

Customers may inspect data relating to the present and proposed rates at the district office before the hearing. The Public Advocate is available for assistance and can be contacted at 287-2445. If within 30 days of the hearing, 15% of the customers of the district file with the treasurer of the district and the Maine Public Utilities Commission petitions demanding a review of the rate changes, the rate change may be suspended, investigated, reviewed and changed. Signatures on the petition are invalid unless accompanied by the printed names and addresses of the signers.