City BPW mulls raising sewer rates

NASHUA – Faced with rising operating costs and a federally mandated system upgrade, the Board of Public Works is considering a proposal to raise sewer rates by about 45 percent over the next five years.

At the same time, the city is nearing a deadline on planning for a major sewer project. The federal Environmental Protection Agency has said Nashua must decide by March 31 what route it will take in the next portion of a $70 million project to reduce overflow of pollution into the Nashua and Merrimack rivers.

The proposed sewer rate increase was included in a sewer rate study report that the city’s chief financial officer, Michael Gilbar, gave to the Board of Public Works on Monday.

Under the proposal, sewer rates would increase by 15 percent in fiscal year 2010, which begins July 1, and again by 15 percent in 2012 and 10 percent in 2014. If approved, these would create a cumulative increase of more than 45 percent over current rates.

For the next fiscal year, the 15 percent increase would mean that home owners would see their sewer bills increase by an average $36 a year, or $9 a quarter, Mayor Donnalee Lozeau said.

The Board of Public Works, which the mayor chairs, will discuss the proposal at its next meeting in March. That board and the Board of Aldermen must vote to approve the new rates before they take effect.

Lozeau said she hopes the rates are approved before aldermen consider the fiscal year 2010 city budget.

The sewer system’s operating expenses outpaced revenues beginning in 2005, according to statistics provided by Gilbar. That has caused the city to dip into cash reserves, he said.

The deficit is partly because the Board of Public Works approved a 30 percent rate cut in 2003, when operating revenues were about $2.5 million more than expenses. Now, operating expenses exceed revenue by more than $700,000, according to Gilbar’s numbers.Further, in 2003, the city’s estimated cost for the mandated combined sewer overflow project was $43 million, said Dave Fredette, the city treasurer and tax collector. Now, the cost of the project has topped $70 million.

The projected rate hike is designed to help cover this new, higher cost

So far, the city has spent about half the cost through earmarked money that has been set aside in the city budget since 2003.

Thus far, money has paid for such upgrades as a wet weather treatment facility, which handles heavy volumes of water during rainstorms. Though not finished, that facility has been online since January, according to city officials.

The city is applying for federal economic stimulus money and for other funding sources to help offset part of the project’s cost, Lozeau said.

The city’s next deadline is March 31, when it has to tell the EPA how it intends to proceed with the improvements.

Overflow into the river is different from water backing up into streets and basements during heavy rain, city officials said. Problems with neighborhood flooding often result in areas of low elevation where it’s difficult for high flows to be pulled out by gravity, officials said.

However, the Public Works Board agreed to ask a Quebec company called BPR to see what can be done to mitigate the problem in neighborhoods that often flood during heavy rainstorms as part of a $35,000 second-phase of the study.

The Public Works Board will vote on whether to approve the second phase in March. Also, city engineers will recommend what the scope of the second phase of the BPR study should include.