Town of Lovell addresses replacement fee change

The Town of Lovell announced in a letter to utility customers this week that water and sewer replacement fees that over time are paying for the town water and sewer infrastructure project will now continue on all temporarily suspended accounts.

In a letter dated Oct. 21, Lovell Clerk-Treasurer Valerie Beal explained that the replacement fees are assessed to pay back funds for the new town water and sewer lines borrowed from the USDA Rural Utilities Service.

Faucet“We are required to collect fees from our utility customers and to make an annual payment to repay this loan,” Beal wrote. “It was anticipated that approximately $37.52 per customer per month would be required to make the loan payments. Each active account is being billed for these fees.”

Under past practice, when a utility customer is out of town for a significant amount of time, like going south for the winter, or when a landlord is between renters or refurbishing a property, accounts could be temporarily suspended. That included the water and sewer replacement fees.

The problem is, Beal wrote, that the payback on the RUS loan is based on anticipated revenue from the total number of property units in town paying into the account for 12 months per year.

“This anticipated funding is not being realized due to the number of temporary terminations we have been experiencing,” Beal wrote, citing the section of the town code establishing the replacement fees. “We must collect the water and sewer replacement fees on each property each month.”

Thus, Beal wrote, property owners will be billed monthly starting in November for the replacement fees even when temporarily terminating utility services at a given location.

Beal stressed that the change in billing is not an increase for utility customers, just applying the replacement fees during temporary suspension of service.

Assistant Treasurer Ed Allred said the town is also in the process of locating and contacting owners of vacant properties in town “to make sure they understand we’re going to start assessing them a fee.” Even a vacant house, if habitable, will be assessed the fee, he said.

The majority of town residents will not be affected by the policy, Beal said, including most of the people who received the letter.

“We needed to send out a letter across the board so everyone can get the information and understand it,” she said.

From now on, a temporary suspension of service will stop billing for water, sewer, garbage and mosquito control, but the replacement fees will continue to be billed at a rate of $18.32 per month for the water line fee and $19.20 per month for the sewer line fee, more for customers with larger meters.

It’s not only a matter of revenue, it’s a matter of fairness, Beal said.

“The benefits we receive by installing the new lines are shared by all of us,” she wrote. “Thus, the fees should also be shared equally as was voted on and passed for the bonds.”

Beal said the town administration and council have been talking about the replacement fees for more than a year, but the town was working on converting from the post card system to a bill within an envelope system, which would make the process of including the utility fee information much easier. That changeover took place a couple of months ago.

by David Peck