EGREMONT -- The selectmen will meet on March 3 at 7 p.m at Town Hall to try to develop a strategy that will improve the financial viability of the town’s municipal water system.
However, a report by a local auditing firm that examined the system suggested that an increase to the town’s already excessive water rates "is not practicable at this time."
The board will meet with the Finance Committee and Water Dept., according town administrative assistant Mary Brazie.
For the past several years, town voters have been subsidizing 25 percent, or about $62,000 of the water system’s total costs.
This was not the initial plan. When the town purchased the privately-owned South Egremont Water Co. in 1996, the premise was to operate it on a so-called enterprise system, which means that costs would be offset by revenues.
In the wake of these annual revenue issues, the town voted in 2012 to hire an auditing firm to see where the shortfalls appeared. Last Monday, auditors Melanson, Heath and Co., PC, of Pittsfield presented a report to the town.
The report noted that the town’s water rates are already more than twice the average water rate for other communities in the state. The average Massachusetts water rate is $498 annually, while Egremont’s average is $1,015.
One factor, reflecting an older population many of whom are not full-time, is that the average water usage by 95 percent of the ratepayers is less than 24,000 gallons annually. The Massachusetts average is 64,000 gallons.
This use shortfall generates a financial shortfall, the report said.
"If usage in Egremont was equivalent to the state average (64,000 gallons annually)," the report stated, ‘based on present rates, the revenue generated would be $275,763."
That sum would have been more than enough to cover 2014’s expected operating costs of $249,593.
But the report noted that Egremont rates are already "excessive."
The report also spotlighted billing errors and reported that interest for late ratepayers is not calculated or collected. Also brought to light is that the water system budget was based on an estimated 212 users. But the number of users presently online is 176.
Potential solutions include monthly billing and a more stringent scrutiny of the water distribution system. The report suggested that the town closely monitor the select customers whose usage is well below the 64,000 gallon average.
The report also conceded that the town will likely continue to subsidize the water system for the foreseeable future.
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