Authority could need rate increase for '16 payment
A bond payment due in two years has Saxonburg Area Authority board members considering a rate hike for 2014 and possibly subsequent years.
The authority has been paying about $1.33 million a year on a $20.4 million bond issue for a regional sewage expansion project that began in 2002 when Penn and Middlesex townships decided to join Saxonburg, Jefferson and Clinton to establish a unified sewage system.
Without a rate increase, the authority might not have sufficient funds to make its March 2016 payment, officials said.
The Saxonburg Area Authority's approximately 3,350 customers could see between a $4 and $6 monthly increase to their flat-rate bill or an increase of $1 to $1.50 per 1,000 gallons of water used for metered customers, under three proposed options.
The rates represent between a 2 percent and 3 percent average annual increase. The authority is expected to vote on the increase at its Nov. 11 meeting.
“Certainly, rate increases are part of business as our expenses increase, but we would hope that they're minimal,” said Authority Manager Paul Cornetti. “We had a planned increase in 2013, but the board looked at it and thought we could get by without a rate increase.”
The 2014 increase is being considered as part of the authority's annual budget, which is about $5.5 million.
Two options include proposed rate increases in 2015 and 2016, but the amounts wouldn't be formally approved until those budget years, Cornetti said.
“As expenses go up, there may be increases in the future,” he said.
Authority board member and Penn Township Supervisor Doug Roth said he believes the increase is going to be needed because each year the authority's finances have gotten tighter.
The authority has been trying to collect about $240,000 in outstanding tap-in fee payments following the 2007 completion of the expansion project. Roughly 40 residents still need to pay the $6,000 tap-in fee, Roth said.
He said that the authority has spent money this year repairing pumps at the Davis Road Pump Station and making improvements to eliminate storm water runoff into the sewage system.
“I don't like the increase, but I trust the manager and people who work for the authority, and I'm sure if they could get around it they would,” Roth said.
He said he's disappointed because he and other flat rate customers in areas without metered public water would have no choice but to pay more.
“They don't have a way to help themselves out,” Roth said. “You can't just take less time in the shower or flush the toilet fewer times.”
Board Second Vice President Ed Gulik of Saxonburg said complying with regulations issued by the state Department of Environmental Protection and the federal Environmental Protection Agency is “getting more expensive all the time.”
He declined to say whether or not he would vote in favor of a rate increase. He's unsure what the board will decide.
“At this point we have to discuss it more,” Gulik said. “We have to make that decision as a group and an authority.”
Jodi Weigand is a staff writer for Trib Total Media. She can be reached at 724-226-4702.