Montville Township is no longer planning to lower sewer rates in January after the township committee discussed introducing a new ordinance to keep rates the way they were prior to this year's ratepayer holiday on Tuesday.
After generating a multi-million dollar surplus over several years, the committee voted to give ratepayers a sewer rate holiday for the remainder of this year and lower rates beginning in January to restore some of the surplus money. But last month, the committee learned that Montville will owe more money to the Parsippany-Troy Hills Wastewater Treatment Plant, which provides sewer services for the township, than originally anticipated.
The 16 million-gallon-per-day plant, which underwent renovations this year, serves Parsippany-Troy Hills, Montville, East Hanover, Mountain Lakes and a portion of Denville. Combined, those municipalities share the costs of sewer service, each paying a percentage of the total cost to treat the wastewater that goes through the plant based on what that town uses.
New meters at plant have showed that Parsippany brought less sewage through the facility than was originally estimated. As a result, usage percentages will be increased for the other communities and affect the costs associated, including for Montville.
The township committee began discussing what to do about the situation in early October, but seemed to be in agreement at Tuesday's township committee meeting that it would not be possible to move forward with the lower rates that were approved this summer.
"My advice would be, at this point, we put the rates back to what they originally were before we planned to do the reduction," Township Administrator Victor Canning said.
As part of the ratepayer holiday, Committeewoman Deborah Nielson said the township restored approximately $2.2 million to the ratepayers. Canning said restoring the rates to what they were before the holiday for 2013 would not mean they could not be lowered in the future. Committeeman Scott Gallopo said he was comfortable with restoring the rates because of the significant increase in cost the township is facing.
"I wish we could deliver the rate reduction but I think it would put us behind the eightball, fiscally, if we jumped the gun," he said.
Canning said that if the township did offer the rate reduction, the CFO has confirmed that Montville would run into a deficit.
"In our line of business, unfortunately, we cannot do that," Canning said.
Additionally, the township committee discussed keeping the water rates the same, as suggested by the Long Term Financial Planning Committee. Gallopo noted that water rate increases did not generate a surplus in the same fashion as the sewer rates and that it is a different situation.
"The water rate increases several years ago did not produce dramatic surpluses," he said. "They were much more in line with what was expected."
The committee is planning to vote on an ordinance, expected to be introduced at the next meeting, that would cancel the lower sewer rate structure.