TodayCarlisle faces third water rate hike in three years
The proposed hike would increase the average quarterly water bill in Carlisle from the current $70 to $77.
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Article RatingCarlisle residents are facing the possibility of a third water rate increase in as many years.
The proposed 2009 budget includes a 10 percent hike in the user fee. Council may adopt the fiscal plan at its Dec. 11 regular meeting scheduled for 7 p.m. at borough hall, 53 W. South St.
The proposed hike would increase the average quarterly water bill from the current $70 to $77, Borough Manager Steve Hietsch explained. This would equate to about $28 more over the course of the year.
In December 2007, council approved a 10 percent fee hike to build up the water fund reserve. The year before, council increased the fee by 15 percent to shore up a revenue loss and make capital improvements.
Upgrades needed
Staff recommends this latest proposal to cover rising costs, a still insufficient fund reserve and the need for the borough to invest in its aging water system, Hietsch said. If approved, the new rate would take effect April 1.
The 2008 water fund budget anticipated a surplus of $222,672, but now staff are projecting a $56,019 deficit by the end of the year, Hietsch said. This would leave a reserve of $380,201, but having about $1 million on hand to cover emergencies is preferred.
The deficit this past year was due to a switch to quarterly billing, which resulted in less frequent meter readings and a drop in revenue during the first year of the change, Hietsch said.
Decline in usage
The recent rate hikes have nothing to do with the ability of the borough to control its expenses, he added. Operating costs for the water fund have increased in line with the Consumer Price Index over the past several years.
However, total costs have risen faster than the CPI due to the aging water system and its associated capital costs, Hietsch said. The borough water plant was constructed in 1949, while parts of its distribution system date from the 1800s.
In recent years, there has been a steady decline in water usage due to conservation and the scaling back by such major users as the International Automotive Components Group plant and other companies that recycle water.
“Since most water treatment and distribution costs are fixed, we don’t see a reduction in expense with a reduction in volume,” he said. “This drop in volume is responsible for the need to continually increase rates despite a respectable record of controlling expenses.”
Higher fixed costs and lower volume result in a price per unit of water treated increasing at a rate greater than the CPI, Hietsch explained.
New tank
The 2009 water fund budget includes money for system upgrades and repairs put off year after year. The largest line-item is $85,110 to complete the engineering design for the replacement Ridge Street water tank, estimated at $1.7 million.
The current undersized tank was built in 1933, is covered in lead paint and is significantly rusted, Hietsch said. Replacement was originally recommended in the early 2000s, but the project has been delayed.
“The price of this project will certainly require the borough to borrow money,” Hietsch said. “Fortunately, we will see a significant reduction in our water fund debt service beginning in 2010, which will free up resources to provide for this borrowing.
Ridge Street is one of three water tanks maintained by the borough to create the necessary volume and pressure to run the system. The Penn Street tank was built in 1961, while the West End tank dates from 1993.
Equipment plans
The 2009 budget also includes the purchase of new equipment so Carlisle can better detect leaks in its aging water distribution system. The borough currently has a contractor run leak detection tests once a year.
With water losses routinely falling between 30 to 40 percent of production, the current leak detection activities are inadequate, Hietsch said. The plan for 2009 is to purchase the first phase of a four-phase fixed location system at a cost of $26,600.
The borough also plans to buy a portable leak detection system next year for $10,000, which is less than the cost of bringing in a contractor, Hietsch said. The hope is to reduce the cost of chemicals, electricity and sludge removal to the point where the leak detection equipment eventually pays for itself.
Other proposed improvements include:
• $36,600 to replace valves at Kerrs Avenue and Hanover Street; Spring Road and Hanover Street; and Cart Avenue and Willow Street.
• $10,670 towards the purchase of a public works van. This cost is being split among the general fund, water fund and sewer fund budgets.
• $6,800 to upgrade the water main along East Baltimore Street running from Spring Garden Street to Juniper Street.
• $4,000 to replace a self-contained breathing apparatus.
