Newark Residents! Sewer rate hike could come in February

Real Estate Agent with Exit Central Realty - Delaware Home Sales

Attention Newark residents, be prepared for a sewer rate increase.  Newark is struggling to meet it's budget and is finding ways to come closer to meeting the demands. With a waste water tax going into effect and a notice of increased electric rates scheduled for next year, I shutter to think of what will be next. 

The following article appeared in a 11/12/09 Newark Post News Alerts:

Sewer rate hike could come in February

By Mark Corrigan

The City Council voted to approve the first reading of a proposal that will raise sewer rates by 25 percent and will go into effect February 1, 2010. A second reading of the proposal is scheduled for the Council's meeting on November 23.

The adjusted rate for residential customers will rise from $5.267 to $6.584 per thousand gallons. A typical quarterly residential bill will be increased by $12.56, when based upon an average consumption of 9,540 gallons. Retail users will see a 31.4 percent increase, or a jump from $4.19566 to $5.51266 per thousand gallons. 

According to a memorandum from Finance Director Dennis McFarland and City Manager Kyle Sonnenberg, the adjustment is needed to help offset the increased costs of sewer maintenance and infrastructure and to help keep overhead down within the sewer department. The hike will also help reduce costs for unexpected repairs to the sewer line and will assist in keeping the department operating within their margin. Additional factors cited for the rate increase are the closure of the Chrysler plant, which has reduced sewer volume, and the effects of a down economy upon other commercial customers.  An additional provision is recommended in the proposal to track changes in the rates for New Castle County. 

According to the memo, "This would permit the timely recovery of increased costs from the County and, correspondingly, permit the refund to customers of any decrease in costs." By providing a "tracker", the City could adjust sewer rates in response to County changes.  In other news, Director McFarland presented a financial report outlining the past nine months, ending September 30, that shows a deficit of $3.732 million.  

The report shows that the shortfall is mainly attributed to reductions in utility revenues and cites that electric consumption was down 3.1% due to a cool and wet summer. To offset some of this financial burden, the report details a $671 thousand refund from the Delaware Municipal Electric Corporation (DEMEC) that will be paid in November. The report does not include projections based upon the new water rates that went into effect on October 1. 

McFarland cites that Newark has shown some financial promise, as well. Operating expenses are $1 million under budget due to lower personnel costs and the City's cash on hand balance was $12.8 million, an increase of $2.3 million from the previous month. Though overall cash on hand for the year has declined $1.6 million.  The outlook for year's end is projected to be an operating deficit of $2.3 to $2.7 million. Initial projections predicted a shortfall of $2.6 to $3 million.