(10/5) At its October 3 meeting, the Town Council discussed the possibility of a water and sewer rate fee increase. A rate increase would cover the rise in day-to-day operating expenses, plus fund planned infrastructure improvement projects.

The last sewer rate increase was in 2015, following the construction of the new wastewater treatment plant, Town Manager Cathy Willets said.

Emmitsburg’s last water rate increase was in 2013, as a 50 percent increase which was only applied to usage of 10,000 gallons/month and above, only affecting about five to eight percent of users, she said.

The need to thoroughly review water and sewer rates has been looming as the water system has been running at a loss for many years now, while the sewer system has had a slight profit in the last few budget years, according to town accountant Cole Tabler.

The ongoing deficit in town’s water revenue is getting to the point where the water fund will soon have to borrow cash from the other funds just to cover costs. Borrowing from another fund typically puts a black mark on audits, especially when there is no plan to repay the borrowed funds, said Tabler.

The town has been able to deal with decreasing water revenue by reducing expenditures, such as not performing needed infrastructure projects. But it can no longer delay repairs and upgrades to the water system. The five-year water system plan includes clarifiers and repairs to deteriorating water lines that will have to be paid for.

A presentation of water and sewer rates was provided by Mike Maker, Deputy Director of Water Practice of New Gen Strategies and Solutions.

Maker said water and sewer systems should be financially self-supporting and each system should maintain reserves to provide for contingencies and unplanned expenses. Factors that affect charges and rates include operating and maintenance expense changes and capital improvement plans. If connection fees are set at less than cost or anticipated growth does not occur, existing customers will have to make up the difference via higher user rates, Maker said.

One option placed before the council to increase revenue for the water system was to enact a onetime rate increase and continue to increase rates three percent each year. Another option was to spread the needed rate increase out over the next three fiscal years.

Maker recommended that the town council maintain connection fees of $8,200 per water connection and $8,000 per sewer connection, and to consider a full cost of service study for all rates, charges, and fees every three to five years.

The council will decide between the three-year rate increase plan or a one-year rate increase at its November meeting.