Groton City considers fees instead of taxes to cover sewer services

Groton — Groton City may move the operation of sewer service to Groton Utilities, which means the cost of maintaining the system would be covered by user fees rather than taxes, allowing the utility to charge nontaxable entities like the University of Connecticut-Avery Point for use of the service.

A user fee setup would affect multiple entities, including the university, the city itself, the Marine Science Magnet High School, Sacred Heart School, other nonprofit organizations and town-owned property in Groton City, such as Shennecossett Golf Course and West Side Middle School.

"We don't have enough information at this time to understand how the change might impact our utility costs," said Matt Engelhardt, marketing, communications and advocacy coordinator for LEARN regional educational service center, which runs the Marine Science Magnet High School. "If the measure goes through and our costs are affected, we will adjust our budget accordingly."

UConn is aware water rates are increasing to support modernization of the water treatment facility, but hasn't been notified of any other billing changes, said Stephanie Reitz, university spokesperson.

The city's budget for sewer service is about $1.7 million, a cost that for years has been borne by Groton City taxpayers. Operational costs were paid using general tax revenue, with improvements covered by taking on debt.

Under the proposed new system, the budget for sewer operations would be transferred from the city government to the utility, which then would assess a fee based on usage and place it in an enterprise fund to maintain and improve the system, Groton Utilities Director Ronald Gaudet said.

The typical residential customer would pay a monthly bill of about $31, based on a draft of the rate impact. Rates have not yet been set and the proposal still is in draft form.

“The user fees will be designed to take care of the system so it always runs,” Gaudet said.

The change is meant to distribute the system’s costs more equitably and make it self-sufficient, Gaudet said. The fund would allow the utility to gradually build a reserve to cover emergency repairs and capital costs rather than relying on taxes or debt. The utility is following the guidelines of a 1999 manual by the state Department of Energy and Environmental Protection regarding sewer rates, he said.

City Mayor Keith Hedrick said he will be reaching out to nonprofit entities and others with information about the proposed change.

He gave this example of why it is needed: Under the present setup, two property owners with homes valued at $200,000 pay the same amount for sewer service through property taxes, even if one home has four residents and the other home has one resident. The proposed system would base charges on usage, he said.

City Councilor Rashaad Carter expressed concern last week that the change could create hardship for renters.

Landlords could pass the fee on to renters as an added utility charge, but keep rent the same, he said. The difference between the user fee and any reduction in the tax burden is expected to be about a wash, Hedrick said.

While $31 a month might seem a small amount to some families, Carter said it could be a hardship for renters struggling financially. “What I’m saying is I know people that $30 is something,” he said.

Based on the research the city has done so far, Hedrick said he does not believe the fee will create a financial hardship.

The City Council’s Committee of the Whole will hear details of the proposed change at the end of this month. Ordinance changes needed to transfer service costs to Groton Utilities would be read in March, with a second or final readings in April.

A public hearing on the changes will be held at a date to be determined. Hedrick said he may add a public informational session on the proposal.


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