Norwich Public Utilities proposes $93.7 million budget, no rate increases
Norwich — Norwich Public Utilities officials presented a $93.7 million combined budget for all four utility services Tuesday that calls for no rate increases, with a $1.1 million spending increase offset by a $2.2 million increase in revenues.
The Board of Public Utilities Commissioners is expected to vote on the budget at its April 16 meeting. No public hearing is planned, NPU officials said, because rates for all services will remain the same. NPU will discuss the budget with the City Council in a workshop scheduled for 8:30 p.m. April 4.
The budget includes a charter-required payment of 10 percent of gross revenue of electric, water and natural gas revenues to the city, totaling $8.86 million based on revenues from the 2017-18 fiscal year. The payment is up by $385,095 over last year’s payment.
The electric division is by far the largest of the four NPU services, with a total expense budget of $55.18 million, an anticipated drop in expenses of $529,203.
Electric rates for NPU customers will remain stable, because for the second consecutive budget year, NPU will use $4 million in rate-stabilization funds from NPU’s membership share of revenues generated by the Connecticut Municipal Electric Energy Cooperative to offset purchased power costs. The budget shows a $773,962 reduction in the cost of purchased power, to a total of $26.2 million, although NPU expects to purchase more power next year, NPU Financial Planning Manager Laura Huren said.
The natural gas expense budget totals $20.3 million, an increase of $976,327. The water division budget totals $10.09 million, up by $496,084 and the sewer budget is set at $8.1 million, an increase of $165,741. Natural gas rates will remain the same but residential customers already saw a $5-per-month increase in their bills starting in March to reflect the added cost of purchasing natural gas from Northeast pipelines.
NPU acting General Manager Chris LaRose said a delay in construction of a major pipeline project across New York caused purchased gas prices to jump. No new increase is expected in the 2019-20 budget.
NPU anticipates increases in revenues across the board next fiscal year, for a combined total of $101 million, in part due to the improving economy and the ongoing natural gas expansion, LaRose said. Natural gas revenues are expected to rise by $1.48 million, including an $862,000 increase in residential gas sales. Electric revenues are budgeted to increase by $350,872, water revenues by $200,406 and sewer revenues by $239,905.
Expense increases include costs of system upgrades, the payment to the city and a $792,239 increase in employee benefit costs, reflecting a 15 percent increased payment to the city’s employee pension fund as part of a citywide effort to catch up on contributions to the fund, NPU spokesman Chris Riley said.
But the total number of budgeted positions will drop by four in the coming year. Huren said four vacant positions — a lineman, sewer collection employee, a natural gas inspector and a project coordinator — will not be filled, putting NPU’s total employees at 146. Total wages, budgeted for $26.2 million, will be down by $90,087.
The NPU salaries budget includes unspecified totals for general manager and assistant general manager — LaRose’s position before he took over for former General Manager John Bilda. Bilda was placed on paid administrative leave in November and then removed under a separation agreement in January that calls for him to retire in April. Bilda faces four federal corruption charges in connection with his role in CMEEC’s hosting of lavish trips to the Kentucky Derby for four years, from 2013 to 2016.
Board Chairwoman Grace Jones said Tuesday said a search for a permanent general manager “is not on deck” for the next few months. Jones said the board will wait to address the issue until the budget is reviewed and adopted and the annual audit is reviewed.