Bangor asks to raise water rates by 15 percent, citing revenue dip

Posted April 21, 2009, at 9:10 p.m.

BANGOR, Maine — The Bangor Water District is asking the Public Utilities Commission for a 15 percent increase in its water rates as a way to counter declining revenue and increased operational costs.

Kathy Moriarty, the district’s general manager, said for most residential users, it would mean an increase of 8 cents a day, $2.25 a month or $6.76 each quarter. Businesses and those who use more water would see higher jumps.

“We understand this is not a good time to be asking for a rate increase, but it’s not a good time for us either,” she said Tuesday. “We face the same financial pressure.”

Within the past year, the district’s revenue from water meters and fire protection has dropped by 2.6 percent, according to Moriarty. That combined with increased costs associated with chemical treatment and insurance rates has left the district with few options.

“It’s the main way we generate revenue,” she said of water rates.

The 15 percent increase represents about $670,000 in annual revenue. Aside from closing the revenue gap and paying for inflated operational costs, the district also has a couple of infrastructure projects coming up, according to Moriarty.

To keep the increase at 15 percent, the water district will delay water main projects for one year, forgo merit pay increases for its 31 employees and continue making energy improvements. Additionally, about $2 million in stimulus funding will help subsidize needed upgrades to treatment facilities.

If approved, the rate change would go into effect July 1.

The city’s water district last increased its rates in 2007. That jump was 7 percent. Moriarty said rate adjustments are common every two years and added that the district plans to make rate adjustments in 2011 and 2013. She did not predict what they might be.

All rate increase requests must be approved by the Maine Public Utilities Commission, which essentially provides independent oversight.

“Utilities understand finances more than the PUC does, but they make sure there are no red flags,” Moriarty said.

The Bangor Water District filed paperwork with the PUC earlier this month and also recently invited a number of large business customers to discuss the proposal. Only one showed up, Moriarty said.

Later this week, a notice will be sent to all residential customers as well. The water district then will hold a public hearing at 7 p.m. Thursday, May 14, at Bangor City Hall.

“If people have genuine concerns or questions, they should come,” Moriarty said.

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