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NK sewage rates to increase

| Sunday, Nov. 24, 2002

NEW KENSINGTON: Although operating costs are down, an increased debt service is forcing the Municipal Sanitary Authority of New Kensington to raise sewage rates about 9 percent for 2003.

Arnold, Lower Burrell and a section of Plum also are serviced by the New Kensington plant and share a stake in its debts although Arnold is the only municipality that has said it will raise rates.

Arnold residents, who pay a fixed rate, will see about a 9 percent rate increase.

The plant, which sits along Industrial Boulevard, incurred about $7 million in debt two years ago to repair its three digesters — machines that break down raw sewage and reduce fecal matter into sludge, which is pressed and sent to a landfill. The repairs were mandated by the state Department of Environmental Protection.

According to plant manager Dan Rowe, debt payments jumped about $225,000 over this year. While the plant paid about $115,000 in debt this year, next year it will pay about $340,000, he said.

A $5.8 million PennVEST loan is financing the bulk of the upgrade along with a $950,200 federal grant. The upgrade, which was delayed about six months because of equipment problems, should be complete by February, Rowe said.

About two years from now, a second phase of upgrade will happen at the plant, costing between $12 million and $15 million, Rowe said. Pipework improvements will be made and the capacity of the plant's settling tanks will be increased.

Rowe said that despite the ongoing improvements, plant directors managed to cut operating costs by about 2 percent for next year. The 2002 operating budget was about $1.6 million, he said, while the 2003 budget will be about $1.57 million.

The cuts were made despite continually-rising wages and utility costs.

However, a decreasing population base in the area is forcing water consumption rates down, Rowe said, which has an inverse affect on sewage bills. A higher water consumption rate typically lowers sewage bills as more customers pay a share of the costs.

Although, the debt service remains the primary reason for the rate hikes.

Rowe said that when the plant became an independent operating authority in 2000, plant directors committed to not raising rates beyond 10 percent for five years. Rate hikes in recent years have been between 7 percent and 9 percent.

Rowe said his philosophy has been to raise rates marginally from year to year to avoid raising them by leaps and bounds within a single year.

"To me, that's the best approach," he said. "Otherwise you find people in sticker shock."

Although Lower Burrell's share in the plant's debts will increase about $50,000 next year, Mayor Don Kinosz said the city will be able to absorb the cost thanks to cuts in operating overhead. The city last year closed one pump station and is looking to close three more in the near future, he said.

As for Plum, where about 200 residents are serviced by the plant, Rowe said, borough officials were not able to predict a rate increase.

Although it varies each year because of credits and charges, Plum's share of the plant's debts is 19.5 percent in 2003 while Lower Burrell's is 7 percent and Arnold's is 16 percent, Rowe said.

About the rate increases

The average New Kensington sewage bill, which is based on 1,500 cubic feet of water consumption per quarter, will increase about $4.65 per quarter, or about $18.60 per year. The 2002 rate in the city was $3.43 per 100 cubic feet of water consumption, while the 2003 rate will be $3.74 per 100 cubic feet of water consumption.

In Arnold, where residents pay a fixed rate, sewage bills will increase by about $19 per year, according to a preliminary budget. The 2002 rate was $206 per year, whereas the 2003 rate will be $225 per year.

Plum has not indicated it will raise rates and Lower Burrell has committed to not raising rates.

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