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Proposed Phillipsburg Sewer Authority rate increase under scrutiny

Published On: Feb 06 2013 08:59:32 AM EST

A vote on a proposed Phillipsburg Sewer Authority rate increase is on hold for at least a month after officials from the authority's four receiving municipalities raised various concerns during a Tuesday night meeting before Town Council.

The authority -- overseen by Phillipsburg and serving the municipalities of Phillipsburg, Lopatcong, Pohatcong, Greenwich and Alpha -- is considering a 10 percent sewer rate increase over the next five years, which would be phased in at 2 percent annually. If approved, it would mark the first rate increase in nearly two decades.

Phillipsburg officials say the increase is needed to restore utility capital that has been depleted over the years and to meet increasingly stringent regulations set forth by the state Department of Environmental Protection.


But, several representatives from the authority's receiving municipalities raised questions over the justifications for the increased rates and expressed concern over not receiving the latest updated information from the authority.

As a result of these concerns, the authority decided to table a vote on the proposed rate increases until at least its next meeting on March 5.

One official from Lopatcong raised concerns that a 2 percent increase may not be needed, citing projections that the authority would still have a $500,000 surplus at the end of five years with no rate increase.

But officials in favor of the increase say that $500,000 surplus projection represents an amount that would continue to decrease each year without a rate increase.

Officials in favor of the increase cited two multimillion dollar projects being required by DEP -- the installation of a flow equalization tank to avoid spikes in the amount of sewage being treated during peak daily periods and the installation of an ultraviolet treatment system at the end of the treatment process.

Officials from the sending municipalities also expressed concerns over what they perceived as a shift in the rationale for the rate increase They said the original rationale focused on Phillipsburg seeking additional capacity, which shifted later to having to meet stricter environmental standards.

Multiple officials from the surrounding districts also said they failed to receive an updated authority rate report issued in January. These same officials also said Phillipsburg for years had failed to invite them to authority meetings.

Mayor Harry Wyant Jr. claimed the opposite, saying these municipalities offered very little input over the years, until this pending rate increase.

"As long as you flushed and everything went down, everything was fine," Wyant said, directing the comment toward the officials from the receiving municipalities.

Phillipsburg Town Council President Bernie Fey Jr. urged all authority representatives to be ready to make a decision next month.

"The DEP is getting more stringent all the time," Fey said. "If we wait, it can get worse."

During a Town Council meeting back in December, Wyant estimated the 2 percent annual increase would translate to a quarterly increase of between $1 and $1.50 for the average residential user in Phillipsburg.

The four surrounding municipalities that receive sewer service from the Phillipsburg utility would be charged a 2 percent increase, Wyant said. Wyant said it will be up these four municipalities if the increase will be passed along to their sewer users or absorbed partially or fully by each municipality.

Wyant has said it is important to restore a funding “cushion” to account for both foreseen and unforeseen sewer utility expenses, such as an approximate $1 million loss in equipment as a result of Hurricane Sandy. While Wyant is hopeful most of this loss will be covered by insurance, he noted the importance of “building back the capital cushion that has been depleted as time goes on.”