Originally published in Island Ad-Vantages, February 6, 2014
Stonington Water Company draft budget continues system upgrades
by Rich Hewitt
The Stonington Water Company board got its first look at a draft budget for 2014 that will provide for continued improvements to the system while working within the revenues provided by the new rate structure.
Annaleis Hafford, an engineer with Olver Associates Inc. who serves as the water company manager, on Monday, February 3, presented the budget which totals $202,664. That’s about $9,500 less than what was budgeted in 2013 and almost $1,500 less than what was actually expended last year.
Comparing the two, however, is tricky, because the 2013 budget was funded in part by a $60,000 bridge loan that made up a shortfall in revenues. There is no loan revenue this year; the budget will be funded through new revenues based on the new water rates which the state’s Public Utilities Commission has approved and which went into effect January 1.
Hafford explained, however, that because the water company bills for past use, the first bills of 2014—for water usage in October, November and December—will still reflect the old rates. So income for the first quarter will be less than in the next three quarters which will be billed under the new rates.
“So we’ll be running a little behind on revenue,” she said.
Still, even with the first quarter under the old rates, anticipated revenues show an increase over the 2013 budget (not counting the $60,000 loan). The total revenues are budgeted at $203,887, an increase of $59,926 over last year.
The rates approved by the PUC increase the rates for most of the 173 year-round customers from $72 per quarter for the first 1,200 cubic feet to $102 per quarter, for a total cost of $408 per year. The cost for exceeding that usage would increase from $8 per 100 cubic feet to $11 per cubic feet.
Seasonal residents would pay $408 for the season, up from $288 for the first 1,200 cubic feet.
There will also be a fee of $50 charged to customers for turning on and shutting off the water each year.
The new rates will add much needed revenue for the water company, even accounting for the old rate income for one quarter. They will boost revenues to an estimated $108,300, an increase of $28,500 from last year. The $50 start-up fee is expected to add about $8,000 in revenues, while the new rates applied to the hydrant rental will increase that revenue line by $18,600.
Hafford stressed that the budget was based on proposed costs and revenues and indicated that it was a tight budget that was likely to get tighter as the year goes on. Some work that was done in 2013—particularly the repairs to the pump on the 110 well—will have to be paid for this year.
As a result, she said, she has trimmed back the budget in many areas.
“I’ve had to cut some lines that I didn’t want to cut,” she said. “But we have to do what we can.”
The materials and supplies line in the budget will be somewhat fluid, according to Hafford and will have to be adjusted to meet the system needs as they develop. That line covers purchases for the system operations, from meters to heating fuel and other supplies. The $20,000 budgeted is less than was spent last year, but significantly more than had been budgeted in previous years.
“I’ve had to predict where we’re going to spend the money,” she said. “It’s possible that we’ll spend more in some areas and less in some others.”
The selectmen, who serve as the water company directors, will review the budget before they approve a final version.