Municipal Utilities Authority Hikes Rates by 4 Percent

The Lacey Municipal Utilities Authority (LMUA) voted unanimously to raise rates by 4 percent at its annual rate hike hearing Wednesday night.

“It is necessary to examine the rates and fees to ensure the authority's revenues are adequate to support our expenses including operating and maintaining the water and sewer systems, meeting our bond obligations and preparing for the long-term repair and rehabilitation of our infrastructure,” Executive Director Edward Woolf said.

The adjustment to current water service charges is a $5.16 increase for the year. The present rate for the LMUA’s sewer service and consumption charge is $83.17 per quarter. After the rate hike, ratepayers will pay $86.50 per quarter. Additional rates are listed below.

A rate increase is necessary to support the 2012 budget increases, Woolf said. In July, the LMUA was notified that the Ocean County Utilities Authority (OCUA) would be increasing the sewage disposal charge by 1.5 percent, which amounted to $48,000.

Next to debt service, the OCUA’s charge to process waste is the largest portion of the LMUA’s budget, Chairman Jim Knoeller said. The cost is more than the LMUA’s operating budget.

The projected debt service for 2012 is $4,437,929 while OCUA treatment fees amount to $3,241,470.

“If we don’t pass it on, accumulating more debt, accumulating more operating expenses and sooner or later we’re going to really have to hit our ratepayers with a tremendous increase and that’s what we’re trying not to do,” Knoeller said. “We’re trying to level the playing field.”

The LMUA provides a collection of wastewater which is then discharged to the OCUA and treated at the Central Plant in Bayville, said Richard Warren, Executive Director of the OCUA. The OCUA bills customers, such as the LMUA, based on the actual number of gallons discharged to the system.

When the OCUA raises their rate, which they have the last four years, the LMUA is forced to increase as well, Knoeller said.

“We’re looking at a way to maintain a business approach, balance this budget, come to almost a revenue neutral point where we can pay for our operational expenses without looking at other money to pay for that,” he said.

In 2011, the OCUA’s bulk rate for all customers was $3,825 per million gallons, which represented a 2.5 percent increase from 2010. The 2012 rate will be $3,882 per million gallons, which reflects a 1.5 percent increase since 2011, Warren said.

Over the years, the LMUA has relied on rate stabilization funds, which are now near depletion, Woolf said. The fund for water is down to less than $300,000 while sewage is at $1.5 million.

Even though the LMUA’s annual budget decreased by $212,779, the rate increase is needed to balance the budget, Woolf said.

Resident Regina Discenza  hears her husband scream every time he opens the LMUA bill.

“I’m sure a lot of other people in our neighborhood open up your bill and they scream,” she said.

Discenza asked the LMUA to protest the OCUA’s rate increase.

“This has been going on for years now. I think they’re the one’s running a muck and then they cause you guys to go looking for ways to balance everything out,” she said.

Discenza recommended the LMUA pass a resolution asking the OCUA to stabilize their rates.

“Let them do the belt tightening, let them do the layoffs, let them do the reapportioning that you guys are forced to do,” she said. “I’m tired of hearing it…I’ve never seen somebody go to the OCUA and say "Go to hell" and I think it's time.”

Knoeller assured that the LMUA does speak up against the OCUA and there is a discrepancy over the current rates.

In the future, the LMUA hopes to use two new wells as a form of rate stabilization. Wells seven and eight are 1,500 and 1,600 feet deep and will provide excess capacity, Knoeller said.

Each well cost $1 million and a total of $2.5 million for treatment, he said. The main reason for installing two new wells was to maintain non-contaminate water and to offset increases.

Since the wells will provide more water than the township needs, the LMUA will look to sell water to neighboring townships, Knoeller said.

The LMUA is in the process of receiving a water allocation permit as well as building a treatment facility, he said. The wells are expected to be in service by the end of 2012.

The following adjustments to current charges were passed at the LMUA’s rate hike hearing: