Quarterly sewer rates will still rise, despite a thorough inspection of the township utility's books by two skeptical members of the Township Committee.  

"Unfortunately we have no choice but to raise the rates. We've come to that painful conclusion," said Committeeman Larry Fink at the April 7 meeting. "There's really no way to cure the deficit problem that we had last year, to the tune of $332,000, and the projected deficit this year of $300,000."

A public hearing on the new ordinance is set for the Committee meeting on April 21. It is the second attempt to pass the new rate structure to support the money-losing utility. On Feb. 17, Committeemen Fink and Eric Hinds had voted against raising the rates on residents, sinking the bill. 

After hours pouring over the financials, the two members now agree rates have been too low and must be increased on the little over half of the township's households that are hooked up to the sewer system. Fink said the "prudent" thing to do would be to raise the rates to maintain the utility, putting aside a modest amount of money for an important inspection of the 25-year old sewer system to check its efficiency.

Cracks in the underground pipes underground could possibly be allowing groundwater to infiltrate the system, which could be costing the town money when the clean water gets sent to the Bayshore Regional Sewerage Authority for treatment, said Fink, citing advice from engineers. 

Committeeman Eric Hinds pledged that the Committee will monitor the books every year or so to make sure rates are correct. "Our goal is not to drive up the surplus," he said. "This should be a break-even, every year, with allocating a few dollars towards maintenance. It should not be something generating hundreds of thousands of dollars in surplus. And we'll be on top of that."

The sewer utility has been operating in the red for the last ten years, but had been bolstered by the surplus fund fattened by housing developer's hookup fees, said Hinds. In 2005, 2006, and 2007, the Township Committee moved money from the surplus into the general fund. Then housing development came to a halt, further shrinking the surplus to nearly nothing today.

The Bayshore Regional Sewerage Authority, of which Holmdel is a member, recently said it will soon finish paying off some large debts.  But that optimism is not calculated in the new rates. "It was hard for us to make the assumption that the fees will come down," said Hinds. 

The rates that were agreed upon on April 7 were lower than the Township Engineer's suggestion of a week earlier, to charge heaviest users $115, medium users, $100, and smallest users, $75, according to Fink. 

"I did an analysis of various rate increase scenarios and found that a lesser increase in the rates would be sufficient to cover the 2011 projected deficit of $300,000, and would assist significantly with the 2010 deficit of $332,000," he said.

Nonresidential Facilities -- including industrial/manufacturing/warehouse facilities, office and research laboratory/offices/commercial retail facilities, public schools, Garden State Parkway (includes Arts Center, Reception Center, State Police Barracks, and Maintenance Office), Hospitals, and Motels -- will pay a quarterly fixed charge on the number of equivalent dwelling units times $100, up from $70.