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Town’s Lawyer Explains Impacts of Proposed Water Rate Hike

Town Counsel Gerald Moody briefed the Board of Selectmen on December 3 about how the Milford Water Company's proposed 83.4 percent rate hike would impact the town government, residents and businesses if it is approved by the state Department of Public Utilities (DPU). The state rate-setting agency kicked off the lengthy process of looking at that increase by holding a public hearing in Upper Town Hall two days ago.

If granted, the rate hike would cost the School Department an additional $20,686, the general government operations an additional $40,960 and the cost of the town paying for fire hydrants would rise by $437,688, Moody explained. Those nearly half-million-dollars in increases would "about wipe out" the $625,228 which the town can increase its tax levy by under the terms of Proposition 2 ½, he added. And, taxpayers would be paying for those increases in addition to their own water bill increases, Moody said.

The town's lawyer – who is driving the town's opposition to the proposed rate hike – said he took to actual water bills and projected how the rate hike would impact these families: One family – consisting of two adults and a teenager – would see their bill jump by $221.20 a year, from $265.26 a year to $486.46. The other – a family of five – would see their bill go up by $815.98 per year, from $978.40 to $1,744.38. "This is a big increase," Moody commented.

He compared the town's Sewer Department to the privately-owned water company, saying they both oversee aging systems of pipes and treatment facilities. But, while the Sewer Department has not increased its rates during the past four years, the Milford Water Company already received a 33 percent increase and will be getting another one once the DPU agrees how much of this request to grant, Moody said.

Questioned by the board, Moody noted that having the state Attorney General's office decide to intervene in this rate increase request "can't be anything but a positive for us." The town is hiring two experts to help him fight the increase, Moody explained

During the DPU's rate-setting process, the water company will try to show that they have a "revenue deficiency" that needs to be offset by charging higher rates. The utility also is asking for an 11.5 percent "rate of return," he told the board.

All three selectmen expressed their views on the rate hike request. "It certainly is exorbitant," Selectman Dino DeBartolomeis said. "We all understand that the water company is making improvements to their infrastructure," noted Chairman Brian Murray, but cited the high costs of "passing it on 100 percent to ratepayers." Selectman William Buckley said the state and federal regulations that led to the utility building a new water treatment plant "didn't come out of the ozone" and questioned whether the Milford Water Company adequately planned for them.


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