A water and sewer surcharge will likely be renewed in Point Borough on Aug. 20 to help plug a $900,000 shortfall in the water and sewer budget.
At that time, it’s expected that the Borough Council will adopt an ordinance on second reading to again impose a surcharge. That will reduce the current shortfall to about $300,000, said Borough Administrator Dave Maffei.
The surcharge consists of a $17 surcharge for water and a $17 surcharge for sewer for all residential and commercial users per quarter, Maffei said. Since the Borough is imposing the surcharge for the third and fourth quarters of this year, users will pay $68 for the surcharge for water and sewer for the third and fourth quarters combined. (Commercial users pay per account.)
Councilman Bob Sabosik said at Tuesday night’s Borough
Council meeting that he wanted to table the ordinance so the finance committee,
which he chairs, can try to figure out if a “Community Disaster Loan” the
Borough will receive can be applied to the water and sewer account to avert the
need for a surcharge.
The Borough has been approved for a $4.7 million Community Disaster Loan from FEMA, Maffei said.
However, Maffei said, before the Borough can use funds from a Community Disaster Loan, it has to charge the same amount as last year for water and sewer. And since there was a surcharge last year, there needs to be a surcharge again or there needs to be a rate increase to compensate for lack of a surcharge, he explained.
“The water and sewer budget has to be balanced,” he said. The Borough has had a water and sewer surcharge for the past two years, he added.
Sabosik cast the lone no vote for the ordinance on first reading. Councilman John Wisniewski was absent.
Maffei said after the meeting that the state will monitor how the Borough draws down from the Community Disaster Loan, which can only be used to compensate losses caused by Superstorm Sandy.
“We can only use the loan to help cover the shortfall and to help start building up the surplus in the water and sewer budget,” he said. “Right now, there’s very little surplus. We have about $800,000 in surplus, we should have about $1 million.”
Maffei also told the council that if they did not act on Tuesday night, the Borough would miss the third quarter billing. The ordinance is scheduled for a public hearing and adoption on Aug. 20. If it passes that night, the Borough can include the surcharge in the third quarter billing, Maffei said.
Schroeder had argued that without a rate increase, the council had to impose the surcharge again, and that’s also the recommendation of Maffei, Borough Engineer Ernie Peters and the borough auditors.
Maffei said there has been a drop in water and sewer revenue, partly due to Superstorm Sandy flooding some residents out of their homes.
He said he does not know how many residents are still not in their homes.
Regarding the future of the water and sewer budget, beyond this year, Schroeder said, “The council has to evaluate how to fund the department: continue the surcharge, increase the per gallon charge or a bit of both. The department has to be fully funded.”
(This article was originally published on Oct. 16 and then slightly revised on Aug. 20.)