BY KATHY BARATTA
HOWELL — Municipal sewer utility customers are one step closer to a promised rate reduction.
The Township Council introduced an ordinance amendment on Aug. 17 that, if adopted on Sept. 21, will give the sewer authority’s residential customers a 5 percent reduction in the rate they currently pay. The rate averages $161 per quarter, according to township finance officer Jeffrey Filiatreault. A 5 percent reduction would lower that amount by about $8.
Councilman Joseph DiBella, who is the Republican candidate for mayor, suggested the rate reduction for the utility’s customers at a meeting in July.
Filiatreault subsequently prepared a cost analysis that supported the rate reduction DiBella proposed.
DiBella also proposed refunding surplus funds to those same sewer customers, but Filiatreault determined that is not possible at this time, according to state statute. However, the suggested $750,000 surplus dispersal to the sewer utility’s residential customers could be provided for in next year’s municipal budget, according to the finance officer.
If the ratepayers had received the rebate totaling $750,000 now, there would have been $1.2 million left in the sewer utility’s surplus account.
According to township officials, even with the 5 percent reduction in rates an additional $200,000 in surplus is expected to be generated by the end of the year.
At the time the 2004 municipal budget was adopted, DiBella and the other members of the Republican-majority council were criticized by Democratic Mayor Timothy J. Konopka for taking $750,000 from the sewer surplus and putting it into the municipal budget’s general fund.
According to municipal officials, at the time of the budget appropriation the sewer utility had a $1.9 million surplus.
Konopka, a two-term mayor who is not seeking re-election, said the surplus funds belonged to the utility’s paying customers and further stated that any surplus generated by sewer payments should remain in the coffers of that utility in the event emergency repairs are needed. That was the case in 1997 when an infiltration of the system’s pipes cost $1 million to repair, he said.
Using $750,000 from the sewer surplus fund this year shaved 3 cents off a projected tax rate increase. The municipal tax rate rose by 5 cents per $100 of assessed valuation instead of 8 cents.
According to DiBella, a four-year analysis of the sewer utility determined that the department generates an average annual surplus of $770,000. He said the amount of the annual surplus indicates ratepayers are paying too much and demonstrated the need for a rate reduction.
Democrat Steve Farkas is DiBella’s challenger for the mayor’s seat. Farkas decried the majority council decision to put the $750,000 sewer surplus into the general fund. He said doing so constituted a “theft of emergency funds.”
Farkas said he would like to see legislation that would prohibit the practice of taking surplus utility money.
“Since the current council has seen fit to steal emergency funds from the sewer utility and the town general account, depleting those areas and leaving Howell in danger of major tax increases should emergencies arise, the council should no longer be able to shift needed funds to artificially balance the town budget,” the candidate said. “They’re playing politics with our budget and that will be evident in next year’s budget when they won’t be able to use an election gimmick.”