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Town reconsiders price of water use; Rate structure from 2011 criticized.

Byline: Melissa McKeon

HOLDEN - A rate structure for water and sewer bills established nearly two years ago that solved financial problems in that department - but raised rates for users - came under fire this week.

Selectmen, who serve as water-sewer commissioners, agreed at a meeting Monday night to have the town's acting town manager and water-sewer department employees bring more options and financial analysis to the commissioners in order to consider changes to those rates.

Holden residents who use town water pay a fixed rate of $23.09 and then a stepped rate per cubic foot of water used. Residents connected to sewer lines pay a fixed monthly fee of $13.54 and then a stepped rate per cubic foot of sewage.

That rate plan has been in place since early 2011, when commissioners considered a financial plan and rate analysis from CDM Smith Inc. The rate plan chosen spread the fixed costs for operation of the system evenly among users, with some higher fixed monthly rates for higher-end users with larger meters, and then estimated what it would cost to purchase water or dispose of sewage for the second part of users' bills.

The estimated costs are dependent on a variety of unpredictable factors such as weather, conservation levels among users, and some variable costs from the city of Worcester and the state Department of Environmental Protection for water and for disposal of sewage.

Officials are also keeping an eye on a federal court case involving the Upper Blackstone Water Pollution Abatement District at the Worcester-Millbury line, which disposes of Holden's sewage. The sewage plant is involved in a court case over mandated improvements that Holden officials say could increase each Holden household's sewage disposal costs by $200 a year.

Selectman Mark Ferguson suggested reducing the fixed rate and spreading the fixed costs to the per-gallon charge. He said a system that charges a high fixed rate for use of the system was a hardship for low-end users, who sometimes end up paying far more in fixed rates than in cost for actual water used.

"I just don't understand how anyone can look at this rate structure and possibly think for a second it's fair, especially to the most vulnerable in our community, which is the single household," Mr. Ferguson said.

The rate structure implemented in 2011 also had as its goal a five-year plan to create a surplus of $1 million to help stabilize rates in the event of a high-cost incident, such as a water main break. That's about two months' operating costs for the $6 million per year enterprise fund.

Half of that goal was accomplished in the first year of the plan, mostly because of unexpected one-time revenues and cost-saving measures, acting Town Manager Jacquelyn Kelly said.

Selectmen were concerned about reducing rates while keeping the water-sewer enterprise fund in the black.

The water-sewer enterprise fund has been troubled by deficits that caused commissioners to go back to taxpayers for more money to fund it at town meeting several years in a row. Commissioners also raised rates by double digits several times in the past five years. In 2010, the department had to raise rates before the state Department of Revenue would certify its free cash.

Ms. Kelly said the current system is working, creating the necessary surplus and paying the bills.
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Title Annotation:LOCAL NEWS
Publication:Telegram & Gazette (Worcester, MA)
Date:Dec 19, 2012
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