Hadley Select Board retains $10 quarterly sewer impact fee, with modifications

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HADLEY — A quarterly $10 impact fee, assessed to all property owners beginning last year as a way to keep the sewer enterprise fund solvent, is being retained, but with modifications in how it will be used.

After officials heard concerns from residents who pay the fee even though their homes are not on the sewer system, the Select Board Wednesday voted unanimously to continue collecting the fee, but to begin directing more than half of the nearly $100,000 brought in annually to the water enterprise fund instead of the sewer enterprise fund.

The decision to keep the infrastructure fee followed a recommendation from Town Administrator Carolyn Brennan, Treasurer Linda Sanderson and Tax Collector Susan Glowatsky, and a presentation showing that steep adjustments to both the water and sewer rates would otherwise be necessary.

“We need the revenue, and this makes sense,” Glowatsky said.

Select Board Chairman David J. Fill II said the fee is needed to avoid seeking Proposition 2½ debt exclusion overrides to pay for various water and sewer projects.

“We’re going to be left with overrides if we cut out this fee,” Fill said.

The impact fee is bringing in $96,040, and under the new plan 55%, or $52,822, will be directed to the water fund and 45%, or $43,218, will be directed to the sewer fund. This division is calculated based on the 1,243 property owners who only use town water, while 1,035 property owners use both services. Another 87 property owners have agricultural meters that demonstrate their water is not going into the sewer system.

Sanderson said the new way of using the fee should reduce concerns from those residents who have argued they are paying for something they don’t use. “We all admit it was clumsy rollout,” Sanderson said.

Officials have argued that even residents who don’t have town sewer benefit from the town’s low property taxes, which is possible due to the numerous businesses on municipal sewer.

If the impact fee that began last May were not retained, along with a 3% increase in sewer charges that will be the subject of a hearing this spring, the Select Board would be forced to increase water charges by 5% and sewer charges by 7%, according to figures provided by Glowatsky.

Under the adopted strategy, a chart presented by Glowatsky shows that for a residential medium user consuming 1,400 cubic feet of water, and on town sewer, the added quarterly burden, from the fee and 3% sewer rate adjustment, would be $12.38. If instead the town pursued a 5% water rate and 7% sewer rate increases, that user would pay just $8.19 more per quarter.

But the commercial restaurant, using an estimated 6,900 cubic feet of water, would pay $22.42 more per quarter under the adopted strategy and $46.69 more per quarter if the town went with the steeper rate increases. Even bigger increases would hit bigger commercial users, such as hotels, if the impact fee were dropped.

Meantime, the town is also undertaking strategies to keep the enterprise funds, which cover operating costs and capital projects, intact. One means of doing this, Brennan said, is to make cuts where possible and bring to Town Meeting slimmed-down budgets.

The sewer enterprise fund will be $64,625 less, dropping from $942,335 this year to $878,070 next year. The water enterprise fund will be $50,861 less, dropping from $1.13 million this year to $1.08 million next year.

Sanderson said both will be able to cover operating expenses and also pay for ongoing debt related to various projects, though she added “we are not on a good trend” with paying for capital. These projects for which the town has taken on debt include water and sewer line improvements, being done in conjunction with the state’s Route 9 widening project, and painting the Mount Warner wells and buying a new truck.

Scott Merzbach can be reached at smerzbach@gazettenet.com.

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