Hallowell, Augusta utility sewer disputes nears trial as court costs reach $120,000

Posted March 14, 2012, at 5:04 a.m.

AUGUSTA — As the city of Hallowell and the Greater Augusta Utility District head toward a court battle over sewer rates, legal costs have already amounted to more than $100,000 combined.

Hallowell and a group of local ratepayers in the city, Hallowell Citizens for Fair Sewer Rates, filed a lawsuit in Kennebec County Superior Court appealing new sewer rates that went into effect last October.

Court records indicate the case will be scheduled for trial in June or July, with a two-day trial anticipated, overseen by Justice Nancy Mills.

Ken Knight, chairman of the trustees of the Greater Augusta Utility District, said the district has spent about $70,000 preparing to defend its rates in court, between legal fees and district staff time spent on the issue.

“It seems like we’re headed to trial at this point,” Knight recently told city officials in Augusta. “It’s a colossal waste of money for the district and city of Hallowell. I’d like to see it all go away tomorrow.”

Michael Starn, Hallowell city manager, said the city has spent nearly $50,000 on the case so far.

Hallowell and a group of residents sued because they say the district’s 35 percent increase in sewer rates was too high, and the district failed to keep proper records to justify the rates.

The Greater Augusta Utility District provides sewage service to 758 customers in Hallowell. According to Hallowell council minutes, that’s about 80 percent of the households in Hallowell, with the Greater Augusta Utility District last year collecting an average of $266,000 a year from Hallowell sewer rate payers.

Hallowell’s lawsuit says the district failed to track sewer treatment costs separately from stormwater treatment.

“Since the district’s creation by the Legislature in 2007, the district has not maintained separate accounts for sewer and stormwater charges, or records supporting the method of allocation between sewer and stormwater ratepayers,” the complaint states.

Customers in Hallowell buy only sewer services from the district.

Augusta customers buy sewer and stormwater services.

The utility district is in the midst of a $17 million project meant to prevent stormwater from combining with sewage during major rainstorms and overflowing into Bond Brook in Augusta.

Officials said the project is a major factor in the need for the rate increase.

“We think it’s a stormwater issue, and they’re trying to pass their costs on to us,” Starn said of the $17 million project. “When the city of Hallowell joined with the Greater Augusta Utility District, they did so only for sewer, not for stormwater. In the 1990s, Hallowell separated our stormwater from our sewer.”

Knight and Starn said the district essentially has one pipe coming into the plant, not one pipe for stormwater and another for sewer.

Both Starn and Knight said their sides are willing to discuss potential out-of-court solutions, such as a new rate structure, but neither was aware of any negotiation efforts.

“We’ve been, from the very beginning, open to that,” Starn said. “It seemed to me it was (utility district) trustees that were adverse to having some type of mediation or out-of-court discussion.”

Knight, while saying a lot of work and thought went into establishing the current rates, said the trustees are open to considering a different rate structure.

“We’ve always extended the offer to Hallowell, if there is another formula they’re interested in, we can look into that,” Knight said. “Our doors have been open forever, and always will be open.”

© 2012 the Kennebec Journal (Augusta, Maine)

Distributed by MCT Information Services

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