A letter was sent to customers with the November sewage bills alerting them of December's impending hikes, which will be used to pay for state-mandated repairs.
The letter was signed by authority board president Jill Fleming-Salopek, vice president Tony DeMartino, treasurer Matt Bovee and board members Andy Fedoris and Larry Schamus.
Rates will increase from $7.69 per 1,000 gallons and a $2.88 monthly service fee to $11.50 per 1,000 gallons and a $16 monthly service fee.
The change affects 4,500 rate payers. The hike was approved at a special authority board meeting Oct. 27.
“Following months of analysis and discussion, the authority has determined it necessary to raise sewage rates in Munhall borough,” the letter says.
Authority manager Mike Terrick said the rate hike will help pay for much-needed sewer repairs to the borough's 60 to 80 miles of sewer lines as part of a state Department of Environmental Protection consent decree.
“Most of the repairs are due to deteriorated and broken lines that haven't been repaired over the course of 70 years,” Terrick said. “That's a lot of expense to have to cover with such a short group of people, but we're under a consent order. If there is any pollution making it into the waterways, anyone can sue to stop (pollution) from occurring. When you agree to a consent order with the DEP, that stops lawsuits from being able to move forward. What we need to do on our end of the program is do repairs. They give us a schedule.”
The schedule includes taking video of the entire sewer system's lines, immediately addressing significant repair needs and monitoring any other problematic areas.
“We are mandated to take steps to ensure that Munhall's sanitary sewers do not overflow into the Monongahela River and accompanying waterways,” the letter read.
“Work was only done in Munhall whenever a problem occurred,” Terrick explained. “We've done repairs on a proactive basis. The purpose of the establishment of the municipal authority was to make sure work was done on a proactive instead of a reactive basis. That kept us from fines and penalties from the DEP. The expense from keeping those lines in good shape is something that we need to face.”
The authority acquired two Pennsylvania Infrastructure Investment Authority loans totaling about $11 million. The loans fund two phases of work, each involving repairs in 350 to 400 borough locations. The first phase was from 2009 to 2012 and the second runs from 2014 through 2017.
Terrick said projected loan payments are $60,000 a month for 20 years.
Rate changes bring the authority's revenue from $2.1 million this year to a projected $3.5 million next year.
This year's expenses were estimated at $2.4 million. Projected expenses in 2016 are $2.7 million.
Terrick said the authority tapped its capital reserve fund to cover gaps between revenue and expenses as well as repairs not covered by the loans.
He said Chester Engineers did a rate study and found the authority had one of the lowest rates in Allegheny County.
“The current rate increase, while seemingly large, only places Munhall and its residents in the middle of the Allegheny County sewer rate range,” the authority letter read. “Considering that Munhall has one of the older sewage systems in our area, the fact that we have been able to keep rates low and currently maintain them in a reasonable range is a testament to the hard work and long-term efficiencies employed by the authority's management and board. Please appreciate that the board members, who are unpaid volunteers, are ratepayers as well. As such, this sewage rate increase affects us just as it does every citizen of Munhall borough.”
Terrick said the rate hike is projected to last through 2019, at which time the authority will re-evaluate its capital reserves, rates and repairs to determine if another increase is necessary. He said several municipalities plan on annual rate hikes over the next few years rather than a one-time jump.
The authority has four paid employees, three part-timers and Terrick, its full-time manager.
Terrick said operational costs and salaries are paid by collected service fees such as the dye testing program.
Dye tests are necessary to help prevent the overloading of the sanitary sewer system, Terrick said.
He said a few hundred of the authority's customers failed dye tests in 2007. Some have made repairs while others remain noncompliant.
“We've issued notices to people that go back several years,” Terrick said. “If that's not done, our consent decree requires we take it to the next level.”
Those who have not passed the dye tests and separated their storm and sanitary systems are prosecuted at the district magistrate level.
Terrick said the authority has prosecuted 10 to 20 people so far this year and plans to do so, starting in December, with 30 accounts per month.
Those found guilty could be ordered to pay fines and court costs up to $500.
Terrick said a majority of the needed repairs cost between $40 to $400, while a few people may need to spend $1,000 to $3,000 to be in compliance, depending on the severity of the sites.
“We have people that have to go out and do inspection work and give advice on what needs to be done,” Terrick said. “Once the compliance program is taken care of, we're going to lose some of our staff because they're no longer needed.”
Dye test inspections cost between $70 and $165, depending on the work required.
A dye test is required when a property is sold. An inspection is required after repairs are made.