BELMAR, NJ — Belmar’s water woes have heated up to a financial boiling point, according to borough auditor Robert Allison.
During the borough council’s February 18 meeting, Allison presented financial projections for 2020 that show the water/sewer utility budget falling into the red by nearly $266,000 due to increases in expenses. That deficit would have stood at nearly $683,000, but $416,700 in surplus has been applied — wiping out the reserve fund that stood at more than $1 million in 2017.
“Right now, we have a (water and sewer) budget that can’t be balanced, and the state won’t accept that. We need something to plug the hole at least for this year,” Allison said, referring to the possibility of a water/sewer rate increase for 2020.
“It’s a steep cliff we’re going off. Expenses keep on going up — $200,000 to $250,00 per year — and revenues can’t go up. We only have 3,000 (water and sewer) users,” he said.
As a result, total annual revenues have remained at about $3.2 million since 2017, while expenses have climbed nearly 15 percent over the past two years to more than $3.9 million.
Those escalating expenses have been for capital improvements to the water/sewer system and the resulting debt service, Allison explained. While those repair costs increased 45 percent to $160,000 from 2017 to 2019, debt service rose nearly 32 percent to $682,000 over the two-year period — and is expected to reach $741,000 this year. Borough officials hope that permanently financing the capital projects will eventually help bring down those costs.
In addition, the borough’s sewage treatment costs have rose 18 percent since 2017, reaching more than $1.6 million in 2019 paid to the South Monmouth Regional Sewerage Authority — or about 39 percent of its total annual water and sewer budget.
While Belmar draws water from its own four-well system from June through September, it purchases water from the New Jersey American Water Co. for the remainder of the year — at a cost of about $360,000, an amount that has declined from a high of $430,00 in 2017.
Belmar’s last water/sewer rate increase in 2014 was successful in helping to balance the budget at that time, Allison said.
Mayor Mark Walsifer said that one option under consideration is the implementation of a tiered rate increase with no rate change for property owners with the lowest water/sewer use, and increased rates for those who consume the most.
“We’re trying to figure out what to do … and looking at different scenarios,” Walsifer said, referring to current discussions among borough officials, including Allison and Chief Financial Officer Christine Manolio.
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