Freeport tries to soften the blow of sewage rate hikes by phasing them in

Sewage rate increases for Freeport residents to pay for the new $18.6 million sewage treatment plant will be levied incrementally.

Council President Clint Warnick laid out how the increases would be added to residents’ bills.

The increases tentatively would total $47, which is a 95% boost in the current $49.41 monthly residential sewage rate.

Warnick said council will use $250,000 from Freeport’s sewer fund to try to soften the financial blow. He said the coming increases would be in addition to the $13 surcharge residents are paying.

Warnick said the first rate hike — $17 — probably will come in May.

That will be followed by a $10 increase at the beginning of 2024 and an additional $7 increase at the start of 2025, he said.

Council will hold a special meeting April 17 to approve an ordinance enacting the rate increases.

Warnick said the increases could change if the borough is able to secure a $1.2 million state H2OPA grant.

“If we get the H2O grant, we may not need increases down the road,” he said.

The fate of the borough’s grant application is pending and might not be known until September.

Currently, financing for the project includes an $11 million PennVEST grant and a $1.5 million federal grant secured through U.S. Sen. Bob Casey’s office.

The remaining financing will be coming from a pending bond issue to which council committed last month.

Warnick said the revenue from the rate increases will help pay for the bond issue.

“This isn’t something anyone on council is looking forward to,” he said. “We all live in town. We all have to pay the increase.”

Resident Floyd Lutz questioned that, noting Warnick said the bond issue rolls in another $700,000 in existing debt. Warnick said that debt is for work on the project that has already been done through the first phase.

“I’m 78 years old and on a fixed income,” Lutz said. “That’s a pretty hefty increase.”

Warnick said he understood Lutz’s concern. He said he owns 10 rental units and will be paying the rate increase for each of them. Lutz countered that Warnick could recoup that money through rental income.

Warnick emphasized that the borough has no choice. If the borough does not act, it will be giving up the huge PennVEST grant and still will face pressure from the federal and state governments to build the sewage treatment plant, he said.

“The train is on the tracks,” Warnick said. “It’s coming. We have to do it.”

Meanwhile, project engineer Robert Horvat said the borough’s bond counsel will meet with bond rating agency Standard & Poor’s this week.

The agency withheld a rating for Freeport, seeking assurances on its ability to repay the bonds it issues. The bond counsel told council at the March meeting that approving the use of sewage rates to repay the bonds is the type of assurance the agency desires.