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Who should pay?
The burden of sewer costs will be reconsidered
By Pru Sowers
Banner Staff
PROVINCETOWN — There is a growing belief among town officials that the sewer construction project cannot be funded under the original premise approved at Town Meeting and that all local property owners — not just those who have hooked on to the system — may be asked to foot the bill.
It has proven difficult to meet the financial projections in Phase 1 of the sewer project, which originally showed that properties connecting to the system would be able to fund all construction costs. The largest area of financial shortfall has resulted from the so-called “red dot delay” (RDD) properties, which were given permission to delay hooking up until their septic systems failed or they were otherwise required to connect.
Approximately 40 percent of those RDD properties have since connected; however, 36 properties remain in that category. As a result, the betterment fees those properties would have been charged to connect in Phase 1 have not been paid. In addition, these properties are also not yet paying approximately $2.7 million a year in annual user fees. The result is that Phase 1 is showing a shortfall, although no one knows exactly how much.
Phase 2 construction costs are still projected to come in at or slightly above the estimated $5.65 million construction cost. However, the $45 per gallon annual charge assessed to users has caused some property owners to back away from hooking up because of the sharply higher costs they would incur for increased water-wastewater flow. Officials want to reduce the $45 per gallon annual fee but have been unable to do so because the revenue is needed to pay for system operations and maintenance.
As a result, many people who hooked up in Phase 1 are paying higher fees than they originally anticipated when they signed the contract to connect to the new sewer. One of them is Mary-Jo Avellar, chair of the board of selectmen.
“People who are on it have fees they didn’t know they were going to have to pay. It was a big lie and total misrepresentation,” Avellar said last week, adding, “Everyone should pay a portion. Everyone benefits from the cleaner harbor and cleaner ground water.”
Avellar said she wants to include a refinancing of the sewer project in the selectmen’s goals and objectives for this fiscal year. Those goals are currently being developed and will be the subject of a public hearing in July.
What may ultimately drive any discussion about redistributing the costs of the sewer project across all property owners will be known on July 16, when financial consultant Mark Abraham presents the results of his audit of the Wastewater Enterprise Fund to selectmen at a special meeting. Abraham has been going over the fund’s finances since last December in an effort to assess all revenues, costs and financing assumptions made previously.
“It [sewer financing plan] isn’t necessarily going to change but [Abraham] is looking at everything,” said John Goodrich, the town’s wastewater team facilitator.
Selectman Austin Knight said financing methods are “a discussion that has to happen in the public again.” The sewer has already contributed to cleaner water in the harbor, he said, and a state-sponsored water quality-testing program that will take place over the summer will show that, he predicted.
“[Test results] will come back over the summer and will show the sewer has been a benefit to the town. The benefits we all receive from it have to be discussed,” Knight said.
“The major contribution that wastewater brings to the table is an environmental one,” said David Guertin, director of the department of public works. “It’s clear to staff that answers to environmental questions always have a public benefit component. Those solutions always cost the public money.”
According to Goodrich, preliminary indications are that the Wastewater Enterprise Fund, the funding mechanism set up to manage the costs of the sewer project, will be approximately break-even for fiscal 2007 and break-even or positive going forward. Abrahams’ report is aimed at identifying ways to reduce the high sewer user fees while ensuring the fund will be financially sound.
There may be other ways to raise revenue without resorting to a town-wide assessment or sewer fee, including adding gallons to the flow allotted to downtown businesses, which would increase their user fees while not adding significant construction or operating costs.
At least one selectman, Michele Couture, said that she would not vote to change the current financing method, where only users of the system pay for its costs.
“The only way we got [the sewer project] through Town Meeting is the agreement that the people who use the system pay for the system. It was valid then and it’s valid now,” she said.
But Avellar disagreed, blaming high sewer costs for helping convince some people to move out from town.
“This sewer has been a contributing factor to the flight we’ve seen in Provincetown. There has to be a better way to finance this sewer,” she said.
psowers@provincetownbanner.com
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Jun 21st, 2007