This letter is in response to a citiizens petition asking for the removal of the $25 capital fee on sewer bills in Fairhaven.
Sewer billing revenue covers just the costs to operate the Department and perform routine maintenance. As such, on March 28, 2016, the Fairhaven Board of Public Works voted to create a sewer capital fee of $25, to be included as part of the water/sewer invoice. These collected monies will be used solely to cover the costs of required Sewer Department capital upgrades.
As written in our mailing to all property owners in Town, the Town’s Sewer Treatment Plant has typical age related issues. In order to keep treating the sewage and comply with our Federal Discharge Permit, the Town needs to significantly improve some of the equipment, which removes the sewage from the water, at our Treatment Facility.
On May 7, 2016, Town Meeting voted to approve $8,000,000 in borrowing for some sewer plant upgrades. As you may be aware, the Sewer Department is an enterprise fund, which means that it is self -supporting and does not receive any revenues from the tax base.
As such, this capital fee was established by the Board of Public Works in order to pay the principal and interest payment associated with the aforementioned $8,000,000 loan.
Per the Mass Department of Revenue accounting requirements, the monies collected from the sewer capital fee have to be placed in a separate account where every subsequent Town Meeting will vote to transfer the monies from this separate account to pay the loan.
The intent of the Board of Public Works, by creating a sewer capital fee, versus raising the sewer rates, was to remove this fee from the invoice when it is no longer necessary to pay back principal and interest fees associated with sewer Department capital projects.
Fairhaven Board of Public Works
Click to download the 6/2/16 issue in its entirety: 06-02-16 MemDay
