Amherst water, sewer funds $1.3 million short of revenue target

  • Amherst Town Hall GAZETTE FILE PHOTO

Staff Writer
Published: 10/19/2020 2:44:06 PM

AMHERST — Campus closings in Amherst last spring at the outset of the COVID-19 pandemic have left the sewer and water enterprise funds about $1.3 million short of projected revenues, according to a financial report issued to the Town Council.

But the report for the fiscal year that ended June 30 states that Amherst remains in a good financial position.

“Although COVID-19 will continue to challenge us, we start FY21 with a balanced budget without using reserves,” states the report, which was compiled by Sonia Aldrich, the town’s comptroller, Holly Bowser, the assistant comptroller, and Finance Director Sean Mangano.

The net operating surplus in the town’s general fund was $1.79 million, or 2.1% of the town’s $85.2 million budget, and similar to the net operating surplus from other recent years.

The deficits in the enterprise funds are associated with significant reductions in water and sewer use, in particular at the University of Massachusetts.

For the water fund, where the projected revenues were $4.49 million, the town only took in $3.95 million, for a shortfall of $543,841.

For the sewer fund, where the projected revenues were $4.51 million, the town only took in $3.74 million, for a shortfall of $753,427.

The Town Council already approved adjustments, recommended by Town Manager Paul Bockelman, that charge all users more for both water and sewer this year, in part due to the pandemic, and also because of looming projects the funds will support. The rate for water is going up from $3.90 per 100 cubic feet to $4.20, and the sewer rate is rising from $4 per 100 cubic feet to $4.60.

The future projects include rebuilding the Centennial water treatment plant in Pelham at a cost of $11 million starting in fiscal year 2022, and a $7.3 million item for improvements to the wastewater treatment system, including a gravity belt thickener, a device that removes water from the sludge produced.

In a memo from the Finance Committee, the Town Council is being advised to keep an eye on use.

“Regarding the water and sewer funds, there needs to be close monitoring of usage since that will affect revenue and has possible implications for future rates,” the memo states. “The capital projects for these funds also have rate implications.”

In addition, the Finance Committee suggests whether it could be time to revise the rate structure so that there would be fixed quarterly charges to cover some costs of water and sewer operations, and lower rates based on lower usage.

Meantime, without a transfer from the general fund, the $1.07 million transportation fund would also have been left with a deficit of $244,838, caused by parking meter receipts and ticket revenues dropping when the town suspended enforcement for several months.

That fund supports projects such as improvements to downtown parking lots but also covers payments for a PVTA outreach route to encourage use of public transportation.

Scott Merzbach can be reached at smerzbach@gazettenet.com.


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