Published January 10. 2013 4:00AM
Norwich - When Norwich Public Utilities sought a controversial 36.7 percent water rate increase last spring, utility officials outlined the dire need for infrastructure improvements in the aging water system to improve efficiency, reduce pollution and increase water capacity.
The rate hikes approved by the Board of Public Utilities Commission are now fully in place as of Jan. 1, and NPU will ask the City Council for support of five bonding ordinances totaling a combined $12.8 million to pay for improvements to the water system.
The council on Monday scheduled public hearings for Jan. 22 on the five ordinances. One calls for spending $2 million to improve contaminant removal systems and other upgrades at the Stony Brook Reservoir in Montville.
Another calls for $2.8 million to build a new water tank at Mohegan Park.
The third would spend $2.6 million to decommission the Royal Oaks pump station, and two ordinances call for rehabilitating and replacing water mains at the Stony Brook Reservoir - $2.8 million for the north transmission main and $2.6 million for the south main.
"These are the projects we talked about in the spring when we talked about the rates on water," said Steve Sinko, division manager of business services for NPU.
Although the City Council would have to approve the bonding ordinances, no taxpayer money would be used for the projects, Mayor Peter Nystrom said. He and utility officials called the ordinances "technicalities." NPU has no bonding authority, so the city must approve the borrowing.
The projects would be funded by low-cost state loans through the Connecticut Drinking Water Fund, estimated at 2 percent interest over 20 years. In seeking the funds last spring, NPU was told by state officials that it would need local rates in place to solidify the water division's finances before the low-cost loans would be approved.
Prior to the rate increase, the water division had been operating at a deficit, borrowing money from other NPU operations to cover annual losses. The controversial rate increases included enough revenues to cover the losses and give the division a positive bottom line to qualify for the state funding.
The public hearings will take place at the start of the Jan. 22 City Council meeting at 7:30 p.m. at City Hall.
Sinko said if the City Council approves the ordinances after the public hearings, the utility should be ready to begin construction as soon as this spring. Some projects already are being designed by project engineers.