Questions Answered On Sale Of Bethel Water

Bethel First Selectman Matthew Knickerbocker released a FAQ sheet pertaining to the proposed sale of the town’s public water systems to Aquarion Water Company.

The first public hearings dates for the proposal will be set at Tuesday night's Board of Selectmen’s meeting.

Read through a few selected questions and answers from the sheet below or download the full PDF here.

Have a question that wasn't answered? Leave it in the comments and we'll work to find the answer.

Q: What has to happen for the sale to take place, and who decides?

A: The decision can only be made by voters.  A town meeting is required, but the Board of Selectmen feel that the question should be adjourned to a town-wide referendum and will recommend such at the town meeting.  A public hearing will be scheduled in advance of the town meeting.

Q: What impact will the sale have on Bethel water rates?

A: The simple truth is Bethel’s water rates must increase no matter who owns the system.  

Throughout most of the last decade, Bethel was not charging enough to cover its basic operating costs, nor setting aside funds for repairs or upgrades, causing the system to go deeply into debt. 

In 2011 the P.U.C. approved rate increases to be phased in over a five year period, shown below, to stop the red ink:

Year 1 35 percent   (Jan 2012, now in place)
Year 2 35 percent   (Jan 2013, now in place)
Year 3 25 percent   (Jan 2014)
Year 4   5 percent   (Jan 2015)
Year 5   3 percent   (Jan 2016)

Aquarion plans to follow this same schedule, subject to PURA approval (which is expected).

Q: What would happen if Bethel chose not to proceed with the sale and instead continue operations as they are?

A: In the short term, the town would need to sell bonds in an amount between $4 million to $6 million to cover the immediate costs of infrastructure upgrades and building new storage tanks.

But the costs noted above reflect only the most urgent upgrades that are currently known.  A more comprehensive long term capital plan is needed, and its cost is unknown. The expense of replacing failing underground water lines, as we’ve seen in the case of the Bethpage water system failure a few years ago, runs at $200 to $300 per foot, or up to about one million dollars per mile.

Although selling bonds to cover these costs would need to be approved by a town wide vote, the cost of that borrowing would be assessed only to Bethel water users, pushing their rates higher.

Q: During the time the reservoir lands are owned by Aquarion, would Bethel residents still be allowed access for recreational purposes?

A: Yes, Bethel residents will still be allowed to use the property for most recreational purposes, subject to state public health regulations and Aquarion security policies necessary for the protection of the residents of Bethel, the public water supply and the associated critical infrastructure.
   
Aquarion imposes minor additional restrictions of its own, such as prohibiting pets or horseback riding, where necessary to prevent dangerous bacterial runoff into the water.

Q: Why did the B.O.S. and P.U.C. recommend selling the water department?

A: In short, because we believe Aquarion has the ability to provide Bethel’s 3,408 water users with better service at lower rates over the long term than the town can provide by itself.   

Bethel is not alone. The state of Connecticut is currently served by over 500 independent public and private water operations.  It is impossible for them to operate as cost effectively as larger regionalized systems can.  Smaller operations around the state have been regionalizing in this manner for years, and without exception, their customers see improved service as infrastructure investments are made.

Our water system needs immediate upgrades in order to meet new state health standards, improve water volume for adequate fire protection and replace older wells that are no longer working properly.

The costs of these upgrades would force the town to borrow millions, adding to the two million dollar debt the department still owes.  Selling the department would provide immediate debt relief as well as begin work to improve water supply.

We also believe all town residents will benefit from the financial advantages of selling.  The sale would replenish the water department’s $2 million debt plus interest still owed to the town’s general fund.  It would relieve the need for millions in new borrowing and boost the town’s financial reserves, making it more likely for the town to earn an upgrade in its bond rating in the future.

The significant cost factors include the following:

• Water volume:  The capacity of our system is stretched to its limit.  There are numerous locations where water pressure is weak and can be easily disrupted, inconveniencing residential and business users and putting fire safety at risk.  At least one new high volume storage tank is needed to address this problem at a cost over one million dollars, and a second tank will be required in the future to balance water demand throughout the system.
• Economic development:  In order to hold down the rise in our residential property taxes, Bethel must attract more commercial development.  At present our water supply is insufficient to support further development of Bethel’s Clarke Business Park.  
• Danbury’s refusal to allow Bethel’s water tank:  Both of the problems noted above could have been solved if the city of Danbury had not repeatedly blocked Bethel’s plan to build a 750,000 gallon storage tank on Bethel’s Eureka Lake property on Long Ridge Road in Danbury. Aquarion will not be subject to the same protracted approval procedures and will most likely be allowed to build the tank. Additionally, over the long term, the company could use its ability to interconnect Bethel with the larger network to better serve Clarke Park.
• Need for new wells:  Some wells that serve Bethel are nearing the end of their useful life span, as reported by independent inspectors.  In addition, new water quality standards are making it increasingly costly to purify surface water from reservoirs.  Aquarion will invest in new wells and begin taking the reservoirs off line as soon as the wells are operational.