A public hearing on the proposed increase will be held at 6:30 p.m. Nov. 18 in the Town Council chambers.
"We are asking for a rate increase because of the project that we have going on now — we're replacing water lines in the town," Gregory Brawn, the district chairman, said Friday. He said the town has about 25 miles of water mains, and some of those are 100 years old and leaking. It comes to a point where the district either continues to spend money on repairs or proceeds with the upgrades, he said.
The district has been working steadily on a five-phase project to improve the mains, Brawn explained. The next phase will be the third.
Brawn said the district was lucky enough to have been offered a 65 percent grant and a 35 percent loan from the U.S. Department of Agriculture's Rural Development program to do the third phase. The loan would be repaid over 40 years at a 2 percent interest rate, he said.
"We had the opportunity to get this grant at 65 percent, which is pretty much unheard of now. The last time we only got a 40 percent grant," Brawn said. "So when we were offered it at 65 percent, we didn't feel it would be prudent to pass it up."
Brawn said the district tries to keep the budget as conservative as possible, but trustees felt it was necessary to continue the upgrade since the grant was much larger than typical.
"We thought it prudent to do this now even with the tough economic times," he said. "We certainly aren't anxious to up the rates, but we feel this is a pretty minor rate increase."
Even with the increase, Brawn said, the district still will have one of the lower averages for water rates in the state.
To help repay the loan, the district has asked the PUC to increase the residential rates by 8.33 percent; public fire protection by 11.67 percent; commercial by 8.32 percent; industrial by 8.22 percent; governmental by 8.28 percent; and private fire protection by 8.33 percent.
The last rate increase for the approximately 900 district customers was in 2008.
The new rate will go into effect on Jan. 1 unless a petition signed by at least 138 customers is presented to the PUC by Dec. 18.
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