POTTSTOWN >> Water and sewer rates may rise by a combined 8 percent in July as a result of the water and sewer budgets proposed earlier this week to the Pottstown Borough Authority.
On Tuesday, the Authority board adopted the $6.56 million water budget and recommended that borough council adopt the $9.39 million sewer budget.
With the budget are rate hikes of 10 percent for water and 7 percent for sewer, which, when combined result in an 8 percent hike for the average customer, said Utilities Administrator Robert Plenderleith.
The impact of the hikes, if enacted in full, would take the average quarter water/sewer bill from $165 to $178, he said. An average customer uses 7,500 gallons of water per quarter.
It works out to about $6 more per quarter for the average water bill and $7 for the average sewer bill, he said.
The increases are to the “usage rate” and not the base rate that each customer pays no matter how much water is used.
However, the exact rate increases are not set in stone and will not go into effect until July.
There are several primary factors for the increases, not the least of which is there has been no water rate increase since 2011 and no sewer rate increase since 2014 “but costs are going up,” said Plenderleith.
Also part of the puzzle is the authority’s five-year capital improvements plan.
The authority has sworn off debt as a way to fund capital projects and for the past several years has built budgets that not only don’t increase rates, but include a portion to set aside to pay for upcoming capital projects.
But as costs increase, the amount of money available to be set aside for capital projects dwindles each year, Plenderleith said.
In the meantime, the latest five-year capital plan is being prepared and includes “a more aggressive” schedule for replacing aging water and sewer lines, some of which are 100 years old, he said.
So the two 2017 budgets envision the increased rates to generate an additional $125,000 or more in each fund each year.
However, by March, Plenderleith said he will have a better idea of how each fund is doing in terms of costs and revenues and the new rates will be reviewed then to see if they need to be adjusted up or down for July implementation, he said.
Further, these may be the last water and sewer rate increases needed for quite a while.
The existing debt the authority is carrying will finally be paid off in 2021.
Currently, servicing that debt consumes $3 million of the sewer budget and $2 million of the water budget.
If the rates that are increased until July can provide sufficient revenues to keep the capital plan moving forward until 2021 – something the board is pushing the administration hard to achieve – the authority will suddenly have an additional $5 million available to put toward capital projects come 2022, Plenderleith said.
“In that case, we would not need to raise the rates for quite some time,” he said.
