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Water and sewer funds show tight reserves; trustees weigh 30'40'per-thousand rate increases
Summary
Town budget staff presented water and sewer drafts showing reduced reserves, rising debt-service and operating costs, and asked trustees to consider rate increases to stabilize the funds.
Town budget staff presented the water and sewer budgets and several possible paths to shore up reserves at the Oct. 14 workshop.
Water presentation highlights: staff reported a proposed water tax rate of 2.5339 per $1,000 of land value (a 17.6% decrease from the prior-year rate that staff tied to debt-service changes), a levy near $1.5 million (presented as an 11.5% increase), and a projected water fund balance of roughly $429,000 (about 8% of appropriations) after appropriating $1,018,000 of fund balance for 2026. Staff said average delinquent collections arrive in February and that the current projected fund balance would not leave a comfortable cash cushion for typical fall/winter delinquencies or a major main break.
Sewer presentation highlights: staff described the sewer tax rate at about $3.72 per $1,000 of land value in the presented draft (down from a 2025 figure the presenter cited as 5.624 per $1,000), and said the draft appropriates roughly $945,000 of fund balance for 2026. Staff said the projected sewer fund balance would be approximately $169,500 (about 3%), which trustees and staff described as very low for a utility that faces intermittent large capital repairs.
Rate options discussed: staff said every $0.10 per $1,000 of tax rate change equates to roughly a $40,000 revenue change for the sewer fund (a figure staff used to estimate the fiscal effect of proposed increases). The presentation included a staff recommendation of a +$0.30-per-$1,000 sewer increase as a base case; several trustees asked staff to model a +$0.40 option to build additional cushion and to account for volatile chemical and energy costs that the department reported have risen since the COVID period.
Operational and staffing issues: trustees and staff discussed overtime levels and the possibility of adding a full-time operator. Staff said overtime has trended up because of 12-hour shifts, senior staff vacation, and emergency responses; trustees asked staff to compare the cost of hiring an additional operator (salary plus benefits) with ongoing overtime costs and potential morale and coverage benefits.
Meters and reserves: staff confirmed meter-fee revenue (a $17 quarterly meter charge introduced in prior years) is being collected and moved into a reserve used to prepay future meter-related debt. That reserve is expected to be used when capital payments come due.
Ending: Trustees asked staff to return with specific modeling for (a) a sewer +$0.30 and +$0.40 per-$1,000 scenarios including projected year-end fund balances, (b) a cost comparison of hiring an additional operator versus continuing current overtime levels, and (c) updated delinquent-collection estimates to clarify cash-flow risk heading into winter.
