Two years ago, Gardner’s water and wastewater utilities were underfunded by $32 million, according to report from the BPU Exploratory Committee, and while residential rates have risen, the council has yet to take definitive action on correcting flaws pinpointed in the February 2012 report.
This year’s water and wastewater budget included an 8 percent water rate increase and an 11 percent wastewater rate increase. The rates cost the average family of approximately 2.5 people an additional $8.59 per month, or $103.
The BPU Exploratory report, which recommended the city build upon the success of the (then) independent Electric Utility Board, concluded, “This committee strongly believes that continuity of independent, non-political leadership is important to the success of Gardner’s W & WW utilities.”
Last month, due to an attorney’s opinion that the electric utility ordinance was flawed and that the board operated outside state statute, the city council voted to make the EUB an advisory board, and board members were asked to remain through the end of their terms.
Discussion regarding how to fund the water, wastewater shortfall continues with ongoing plans to increase rates by up to 12 percent each year for the foreseeable future.
Reasons for the water and wastewater underfunding highlighted in the 2012 report list several concerns:
• Past management decisions having a negative impact on the continued viability of the utilities
• A “generous” industrial rate for entities that use more than 40,000 gallons per year, such as the subsidy provided USD 231. According to the report, “Subsidies distort the actual costs of providing utility services. This makes a fair comparison between Gardner’s utility costs and the costs of neighboring municipal utility service providers difficult or impossible and impedes transparency of rate development.”
• Rate studies have been untimely and rate changes inadequate.
• Utility service revenues have been used for non-utility purposes.
• Deferred maintenance. When timely maintenance is not performed, the deferred costs of repair is increased.
• Lack of experience of council members in operating a utility business model. Decisions made for political purposes rather than sound business reasons.
Mayor Chris Morrow, at the March 3 city council meeting, provided an informational handout regarding a “separately created Utility Department,” and asked members to review the information and be prepared to make suggestions.
The mayor’s recommendation was, “In conjunction with the Public Works Department, or a separately created Utility Department, the city council should move to form an advisory commission. Said advisory commission will study, deliberate, build consensus, and make recommendations to the city council . . . . consistent with utility industry best practices regarding the safe, economical, efficient and business like operation and management of the city electric, water, and wastewater utilities.”
Members of the BPU Exploratory Committee included: Lee Moore, Jim Ross, Mike O’Connor, Tom Mertz, Norm Schutte, Don Cooper, Mark Baldwin, Lance Boyd, Kristy Harrison and Morrow.