NEW SHARON — The New Sharon Water District is asking state regulators to approve a significant rate increase that is opposed by some if its customers, who say the hike is too steep.
The district, which serves fewer than 100 customers, struggles to maintain an aging system and collect enough payments from its customers to cover day-to-day operations, leaving nothing for long-term upgrades.
Much of the district’s equipment and infrastructure is nearing the end of its useful life or has surpassed it, and the district is losing a massive amount of water to suspected leaks. District officials say they need to increase rates in order to fund repairs and upgrades.
“It’s a terrible conundrum we are in,” district Treasurer Mercy Hanson said in an interview Tuesday.
But the district’s customers struggle to make payments, and some are resisting a rate increase. In January, a small group of customers petitioned the Maine Public Utilities Commission to investigate the district to determine if the proposed 26 percent increase is justified. This month, the commission suspended the rate increase to give itself time to complete its investigation.
Forrest Bonney, the district operator and chairman of the board of trustees, said Monday that the utility hasn’t raised its rates in a decade.
Last November the district proposed a 41 percent rate increase, which would be enough to cover operating expenses and save money to pay for improvements, but customers balked at the size of the increase, according to Bonney.
In response, the district reduced its proposed rate increase to 26 percent.
“It really wouldn’t meet our needs for maintaining the infrastructure, but it would let us pay our bills and put some money aside, which we are not able to do now,” Bonney said.
The proposed change would increase the minimum charge for the district’s 88 customers from about $25.50 a month to $32, and the rate per 1,000 gallons of water from about $7 to almost $8.75 if the customer exceeds the approximately 3,700 gallons included in the minimum rate.
Janet Kennedy, who started the petition for the PUC investigation, is dead set against the increase. About 15 customers signed the petition.
Kennedy owns Imelda’s Fabric and Design, at the corner of Starks Road and U.S. Route 2. She uses 200 gallons of water a month, she estimated, but she is still being charged the same as someone who uses the total minimum.
“I almost feel like I should have car washes out front here to get the fair share of water I’m charged for,” said Kennedy, who lives in Industry.
The district probably needs to raise rates, but Kennedy said it won’t be coming out of her pocket. She wants the district to change its rate schedule so customers that use less water don’t have to pay as much.
“They probably do need a rate increase, but I won’t pay, I’ll go without water first,” she said.
Jeffrey Brackett, a former New Sharon fire chief and a district customer on Starks Road, also signed the petition.
“I have no doubt they probably need it, but I think it is a little excessive,” Brackett said. The district’s proposal to increase the annual amount it charges the New Sharon Fire Department, from $18,500 to about $20,000, presents a further problem, he said.
“They’ve been operating on a shoestring budget so long I don’t know how much actual money if would take to get them on the positive side,” he said.
The district relies on water from a drilled well on Pump House Lane and distributes it to homes and businesses in New Sharon village. The business was converted to a public water district in the 1960s, but the last major equipment replacement occurred in the 1990s.
According to a 2013 district inventory from the Maine Rural Water Association, 70 percent of the assets were listed as high risk for failure requiring immediate attention. That infrastructure included fire hydrants, the well, and pump, water treatment equipment, shut-off valves, distribution and transmission mains and water meters.
Altogether, the cost is roughly $87,500, an amount far outside of what the district can afford, Bonney said.
“At the present time, we can’t afford to do that, and in some cases, we are living on borrowed time,” he said.
According to Hanson, district revenue in 2015 was $52,700 and its expenses were $39,900, but it also had to pay more than $14,000 to cover debt service on two federal loans from the federal government and pay for emergency repairs on the system. According to commission documents, the district had to take out a short-term $4,000 loan last year to cover its bills.
Some equipment already has failed, such as a fire hydrant on Post Office Road. Instead of pursuing a long-term plan, the district is stuck doing emergency fixes.
“We do the cheap things. You throw on another valve and hope for the best,” Hanson said.
The district isn’t even sure how much water its customers are using, because many flow meters are broken, and the system is pumping a gigantic volume of water that might not be reaching customers.
According to its January records, the district pumped almost 914,000 gallons of water but billed customers for only 293,000 gallons. In February, the district pumped 872,600 gallons; customers were billed for only 290,500.
That means more than 582,000 gallons of water is somehow disappearing into the system.
“There is something horrendously wrong,” Hanson said.
“We are pumping a huge amount and we have no idea where it is going. That is not OK,” she said. Pumping that much water means the district uses more energy to power the well equipment and more chemicals to treat it, which puts more wear on infrastructure.
A malfunctioning flow meter on the main pump and inaccurate remote readers on customer’s lines could explain some of the disparity, but not everything, Hanson said. If broken meters were the only problem, that would mean each of the district’s customers would be using around 10,000 gallons a month, about three times the minimum monthly use, she said.
Hanson suspects there is a massive leak, or series of leaks, in the system, but the district can’t afford to locate and fix them.
“It’s not pretty. It really has to be our main priority,” she said.
The district is scheduled to meet with the PUC again in April, and officials are hopeful that the commission will rule on their case. If it can raise rates enough to qualify for federal loans or grants, it could move ahead and address the problems.
“We are being optimistic about it,” Hanson said.
Even if it secures a rate increase, the district still will face cash flow problems. According to Hanson, many of its customers have trouble paying a $30 monthly bill.
“The people who can really afford it are few and far between,” she said. “You add on another $5 or $8 a month and it’s worse. To be fair to them, it hurts,” Hanson added.
Even coming up with the money it is owed is a problem. According to Hanson, a third of the district customers pay on time, a third pay late and a third have to be pressured into paying at all.
“It’s a constant struggle to collect what’s owed us. We are constantly threatening to shut off water,” Bonney said. “It’s like pulling teeth to get them to pay.”
Although it wants to raise rates high enough to afford required fixes to its system, Bonney said the district knows that raising rates too abruptly could make things worse.
“If you raise rate too high and they can’t pay them, you lose customers,” he said. “But if we go out of business, it will be more expensive for everyone.”
Peter McGuire — 861-9239
Send questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.