Norwich – The Sewer Authority Tuesday approved a 9 percent rate increase effective July 1, lower than the 11.5 percent increase Norwich Public Utilities officials said was necessary to meet operating expenses and maintenance in coming year.
The authority voted 4-1 on the new rate increase, with member Alan Remondi voting against the measure.
During a discussion of the rate hike last week, Remondi criticized the 11.5 percent rate increase, especially on the heels of a 27 percent water rate increase next year approved by the Board of Public Utilities Commissioners.
Remondi suggested the utility divert money from a mandatory sewer system upgrade charge enacted in 2009 to cover next year’s projected budget shortfall, but NPU officials explained Tuesday that those funds are dedicated and could not be used for operational expenses.
Without a rate increase, the sewer authority would use up its cash reserve to cover operational deficits and would end the 2013-14 fiscal year in the red, officials said.
The 9 percent increase approved Tuesday would keep the cash reserve at about $800,000, about 8 percent, much lower than the 15 to 20 percent the authority prefers.