Little Egg Harbor Township’s Municipal Utilities Authority will increase its base water rate for the third consecutive year as it continues to rebuild about 18 months after Hurricane Sandy.
MUA Director David Johnson said a budget increase and continued loss of revenue during the past two years are reasons for annual increase of $24. The MUA’s board of commissioners will vote on that proposed increase June 10.
But Mayor Arthur Midgley said he is not happy to hear the MUA also may increase water- and sewer-connection fees as the township connects to rebuilt homes and new residents. This could impede commercial growth as officials work to develop a Route 9 corridor, he said.
“They operate as a separate entity. We appoint members, and then there is really no control from the township. We’re really not happy about some of the things they have done, like salaries and other decisions,” Midgley said.
In 2012, Township Committee members and the administration expressed concern about Johnson’s salary of $159,047.
Johnson said he holds two positions at the MUA, including chief financial officer and contract administrator. Part of Johnson’s salary includes $12,000 for the CFO position and $15,000 for contract administrator. He receives longevity pay of $18,605, he said.
“We’ve always tried to keep the rates as low as possible and were able to for 16 years, and unfortunately, it’s catching up with us. Yes, there is an increase this year, but no one thanked us for the 16 years there was not an increase,” Johnson said.
The MUA did a comparison with 13 Ocean County municipalities of base water rates for annual use of 15,000 gallons per household and all have significantly higher rates, Johnson said.
“This is somewhat of a modest increase considering what we have to do and what we’re faced with after Hurricane Sandy was so devastating,” he said.
In 2012, the base water rate increased from $30 to $34 per quarter, and increased in 2013 to $40 a quarter. This year, customers could see another rise to $46 each quarter.
More than 600 water customers have shut off service after walking away from their homes since Hurricane Sandy devastated the township, Johnson said. This number represents some of the 5,000 homes substantially damage during the storm.
The loss of revenue from those customers is contributing to the potential increase of the base water rate, said Eugene Kobryn, MUA board member and township committeeman.
With fewer ratepayers using water, revenue is down, which has contributed to the increase in the base water rate.
The $2 monthly water rate increase equates to about 7 cents a day and is not being implemented to fatten the MUA’s escrow account, Kobryn said.
“It’s certainly not the right time for a rate increase, and I wish it weren’t happening at this time. I do feel sorry for anyone getting a rate increase right now, because we still are rebuilding and coming back from the storm,” Midgley said.
The base rate in Little Egg Harbor allows the use of up to 15,000 gallons of water, Johnson said.
The MUA will use $365,000 in reserves and expects to receive $369,000 more from the Federal Emergency Management Agency to offset the budget.
Since Sandy, the MUA has received about $600,000 from FEMA to apply to the budget, Johnson said. The funding is for municipalities whose budgets have been affected as a result of the storm, but he doesn't know if a check will be coming next year.
The budget for 2014 is about $6.8 million, an increase from $6.5 million last year.
Along with the increase to the base water rate, new customers could see an increase of $100 for water and sewer connection fees. The water connection fee is $2,575 and the connection to the township sewerage system is $1,300.
The MUA will impose inspection fees for meters, meter turn-off and re-inspections. There will be a $35 turn-on and off fee during normal business hours and $125 after hours.
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