Sewer bond produces questions about Brunswick-Topsham deal
BRUNSWICK — As the Brunswick Sewer District moves forward with a plan for a $22 million sewer plant upgrade, questions are being raised about whether Topsham, the plant's largest customer, is paying its fair share.
Critics say the terms of a 50-year agreement for sewage treatment between the Brunswick and Topsham sewer districts favor the smaller town, which is being charged only for plant operations and debt service.
The board of trustees authorized a $22 million bond earlier this month, but will hold a public hearing on June 19 before going further with the financing. If it goes through with the plan, it could mean a 40 percent rate increase in Brunswick.
At-large Town Councilor John Richardson said the upgrade was necessary, but the Brunswick Sewer District trustees should review the contract with Topsham before considering a rate hike for Brunswick ratepayers, who are already smarting from several years of property tax increases.
Topsham has grown substantially in the years since the agreement was signed, he argued, and the contract should be amended to reflect that growth.
“I think that before going forward with such a substantial upgrade the parties ought to be renegotiating a 50-year-old contract to come to more equitable terms for both sides,” Richardson said.
The problem persists because the two sewer districts are separate, quasi-municipal authorities with independent boards of trustees appointed by the Brunswick Town Council and Topsham Board of Selectmen – not a consolidated district with all costs shared by both towns.
Under the 1975 agreement, Topsham is billed for the percentage of the plant's operating costs equal to the amount of waste it brings into the system.
Currently, the town accounts for about 17 percent of inflow, so it pays that share, Brunswick Sewer District General Manager Leonard Blanchette said.
The percentage-based billing means Topsham pays a lot less than Brunswick.
According to Blanchette, Brunswick ratepayers are charged $46.85 per 1,000 cubic feet of flow. The average household uses about 2,000 cubic feet per quarter, he said.
In April, Topsham was billed roughly $12,000 for the sewage treated at Brunswick’s plant, Blanchette said. According to his calculations, if Topsham were charged for administrative, maintenance and other costs borne by Brunswick, it would have owed approximately $92,000 for the month.
Spring months are outliers, Blanchette cautioned, mainly because storm water infiltration and inflow skews the calculations.
Still, Topsham still pays less to treat its sewage than Brunswick residents even during dry months. In July 2013, for instance, Topsham was charged $9,000; had it been charged for all costs absorbed by Brunswick, its bill would have been closer to $47,000, Blanchette said.
But even though it seems that Topsham is getting a better deal, simply looking at the cost to operate the plant doesn’t take into account other costs borne by Topsham’s ratepayers, said Stuart Kay, the Topsham district’s superintendent.
Along with sewage treatment, the district also has own administrative costs, the price of maintaining its sewer network – a service it contracts with the Brunswick Sewer District – and debt service on its own projects.
Kay disputed the perception that the Topsham Sewer District isn’t paying its fair share, noting that Topsham ratepayers are actually being billed at a higher rate than Brunswick residents, $49 per 1,000 cubic feet.
If the nonprofit district was actually getting a better deal, Kay said, it would “have excess revenues, without the costs to justify it.”
Topsham’s rate is also expected to go up by as much as 40 percent to pay for the district’s share of the sewer upgrade, Kay noted.
Blanchette acknowledged that even if Topsham’s payment structure is amended, it would not substantively change the inevitable Brunswick rate increase.
Brunswick trustees have discussed the “inequities” in the agreement and those concerns will probably be at the forefront of a contract renegotiation, Blanchette said.
The agreement has been amended twice since it was signed.
In 1997, it was changed to bill the Topsham Sewer District monthly, rather than quarterly. In 2003, an annual administrative charge was applied to Topsham, starting at $17,000 and increasing over time. Kay said the charge last year was roughly $21,000.
Even though a full-scale reworking of the agreement can be done, Blanchette said it might not be worth pursuing.
“It can certainly be amended,” he said. “The question is, how much energy you want to put in it.”
State Rep. Charlie Priest, D-Brunswick, and chairman of Brunswick’s Board of Sewer Trustees, said that when the agreement was amended in 2003, the Topsham Sewer District Board was unwilling to entertain a wholesale renegotiation. The Brunswick board isn’t willing to break the contract, Priest said.
“If they want to hold us to the contract, they have every right to do so," he said. “That’s not to say we can’t ask them to change it, but I don’t suspect they would."
Unless Topsham has a “change of heart,” the terms of the contract probably won’t be revisited until it runs out in 2023, Priest said.
“We have lived with it for this long, sometime unhappily, but we have lived with it,” Priest said.