TOWANDA - The Towanda Municipal Authority on Friday raised its water and sewer rates by 2 percent,

The board of directors of the Towanda Municipal Authority (TMA) on Friday voted unanimously to pass the TMA's $6.35 million budget for 2013, which includes the rate increases.

"I think we're being very prudent" in instituting the rate increases, Towanda Municipal Authority Manager Tom Fairchild Jr. said at the TMA's meeting on Friday. "We have (experienced) increases (in the TMA's costs) here and there."

The rate increases are based on the increase in the consumer price index, he said. "We're trying to stay ahead of inflation," he said.

The rate increases will go into effect on Jan 1, 2013, said Mary Ann Harris, secretary of the TMA.

The water rate is being increased from $3.78 per 1,000 gallons to $3.86 per 1,000 gallons, Fairchild said.

The large majority of the TMA's customers are charged the "regular" sewer rate, which is being increased from $8.42 per 1,000 gallons to $8.59 per 1,000 gallons, a 2 percent increase.

However, the 230 customers in the Route 220 sewer district will see their sewer rate increase from $8.65 per 1,000 gallons to $8.75 per 1,000 gallons, which is a 1.2 percent increase, Fairchild said.

The sewer rate for the Route 220 Sewer District, which is higher than the regular rate, takes into account the large amount of debt that the TMA has incurred for the Route 220 Sewer District, Fairchild said. "We're trying to keep their rates (the rate for the residents of the Route 220 Sewer District) reasonable," he said.

The Route 220 Sewer District includes Monroe Borough, the homes and businesses between Monroe Borough and the Chesapeake Energy office (former Ames department store) in Towanda Township, and homes and businesses in the Crystal Springs area in North Towanda Township.

The other component of residents' water and sewer bill is the base charge - also called a meter charge - which is not being changed, Fairchild said. In most cases, the base charge is $5.08 per month.

Fairchild said the rate increases could have been much higher - perhaps as high as 6 percent - if the TMA had not had revenue from bulk water sales to gas drilling companies to pay for the almost $1 million in damages to its water and sewer system that was caused by Tropical Storm Lee. If the revenue from the bulk water sales had not been available, the TMA would have had to borrow money to make the repairs, he said.

The TMA is still waiting for hundreds of thousands of dollars in reimbursements from FEMA and PEMA for those repairs, he said. The TMA needs the reimbursements because it has been planning on using the revenue from the bulk water sales to pay for capital projects, including the development of additional water wells for the TMA.

Even with the rate increase, the TMA's water usage rate will still be less than it was in 2009, when it was cut by 10 percent in response to the large amount of revenue that the TMA was receiving at the time from bulk water sales to gas companies. Up until the 10 percent cut went into effect, the water rate was $4.03 per 1,000 gallons.

On Friday, the TMA's board of directors also voted to hire consultant David Unkovic to explore the feasibility of refinancing over $9 million of debt owed by the TMA.

Fairchild said that refinancing the debt to a lower, 2 percent interest rate would yield $50,000 in annual savings.

Unkovic had served as a bond counsel to the TMA in the past.

James Loewenstein can be reached at (570) 265-1633; or email: jloewenstein@thedailyreview.com.