Manalapan town commissioners will vote on raising water rates for everyone and making sewer customers pay the full cost of that service at a Jan. 25 public hearing.
Consultants Mock, Roos and Associates are recommending that water rates go up each year for the next four years, from the current $1.85 per 1,000 gallons to $2.34 per 1,000 in 2014. Sewer rates would jump from $2.29 per 1,000 gallons in 2010 to $5.73 in 2011 and continue rising to $6.07 in 2014.
Commissioners are concerned that water users have been subsidizing sewer users and that the water and wastewater system is heavily in debt.
Henry Glaus of Mock, Roos said the system would take in $1.7 million in revenue in 2010 but spend $475,000 on debt service. Planned capital projects will boost the interest payments to $695,100 in 2012, he said.
“If that were a business, it wouldn’t be a business. It’d be out of business, it’d be bankrupt,’’ Commission President Pro Tem Robert Evans said at the December meeting.
Besides town residents, the system also serves most of Hypoluxo, but commissioners worried that the mainland customers could someday go to Boynton Beach or another provider and seemed to favor raising rates now while their customer base is at its largest.
“This is our opportunity to recoup capital expenditures while we have more customers that are nonresidents than just resident customers,’’ Evans said.
Glaus suggested that water and sewer rates both be raised in a rate study presented in October. Commissioners held a workshop on the rates in November and told him to develop a rate plan that would lower water rates because of the additional money from higher sewer rates.
Commissioner Howard Roder wanted to stick to that strategy at the December meeting, but Evans argued the town should not have a third of its water costs going to debt service.
“We’re paying a lot of interest that we shouldn’t be paying, and if you look at the big picture, it’s fiscally more responsible to reduce that interest than it is to just keep the nominal rates low,’’ Evans said.
He and Vice Mayor Basil Diamond said the town could send a letter to water and sewer customers explaining the need to pay down the debt. Diamond said the commission could monitor how much money the town takes in.
“If we do review it and we see that we don’t need to accumulate as much, then we can always adjust it down,’’ Diamond said. “But it’s not possible to recoup what we should have done earlier, after the fact.’’