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Norwich - Business owners and residents voiced strong objections Tuesday night to Norwich Public Utilities' proposed 36.7 percent water rate increase and 11.5 percent sewer rate hike.
About 30 people attended a lengthy public hearing before the Board of Public Utilities Commissioners. Chairman James Sullivan said the commission would consider comments over the next two months before making a final decision on the rates, which are part of the 2012-13 proposed water and sewer budgets.
NPU General Manager John Bilda led off the hearing by explaining several costly water projects the utility must undertake over the next several years.
"Every one of these projects is directly related to water quality and water quantity," Bilda said.
Displaying a water rates chart that showed the average user could see an increase of $11.12 per month, Bilda said the chart's average usage figures are higher than most families' actual usage. He said a single person on a fixed income more likely would see a monthly increase of $7. That same person could see a $2.25 monthly sewer bill increase.
Bilda also told the audience that NPU is projecting an electric rate decrease this fall that could cut the average residential electric bill by $5 to $10 per month, offsetting the proposed water and sewer increases.
But attorney Glenn Carberry said the proposed water and sewer rates would hurt large and small businesses and senior citizens alike.
ACLS New England Inc., a commercial laundry facility in the Norwich Business Park, is one of the city's largest water users. Carberry said the impact of the proposed rate increases on ACLS "is shocking." The company estimated it would pay an additional $110,000 next year in water and sewer fees, about 4 percent of the $3.1 million in anticipated revenue from the increased rates.
Coupled with a prior 2010 increase, ACLS would pay about $650,000 next year for the same water and sewer usage that cost $435,000 before 2010.
"That extra $215,000 is about a 50 percent increase in a fixed expense in a little more than two years," Carberry said.
Daniel Goldberg, senior vice president of ACLS, questioned how the rate increase could be proposed with so little advanced notice when it is meant to fund major capital projects that have been in the planning stages for years.
Bilda responded that NPU only learned April 11 that some of the projects are eligible for low interest state funding, giving the utility little advance notice.
Carberry argued that the commission should slow down. The rate increase was just made public last week and would take effect on July 1 - a sharp contrast to the months of rate hike reviews private utilities must go through. He said the rates are "unjust and unreasonable," and have not been adequately explained by NPU officials.
Joe Mastronunzio, owner of apartment complexes in Norwich, including a 142-unit complex, called the rate increases "unconscionable." He said rents in the city have dropped during the recession as landlords have faced tax, utility and fuel increases. He said owners can't pass on the costs to tenants, because many already can't afford to pay.
Ray Bedard, owner of an office condominium building on Case Street and several apartment buildings in the city, said the last rate increase already had hurt his business. "Not only are we going to get hit with this, but the mill rate is going to go up too," Bedard said.