Backed with a comprehensive study of existing rates and projected expansion projects, the Warwick Sewer Authority is considering reducing the operational fee for residential users by about 5 percent; imposing an annual $271.50 connect-capable fee to those residents who have access to sewers but have chosen not to tie in and set the per linear foot assessment rate at $84 through 2016.

Those options are contained in a 47-page report prepared by David Bebyn, vice president of B&E Consulting, LLC, a public accounting firm with offices in Providence. Bebyn presented his findings to the authority Thursday evening.

The aim of the $14,850 study is to properly assign costs to the work performed and to prepare the authority to take on the expenses related to upgrading the wastewater treatment plant as being demanded of the Department of Environmental Management as well as doing about $2 million in maintenance on older pumping stations and lines.

In large part the study assumes the abandonment of the existing system of charging users based on the quantity of water they use and replacing it with one dependent upon the size of their water meter. There would be a per-unit resident charge. In addition, commercial users would be charged on the basis of their meters, with bigger meter users paying more regardless of the volume of wastewater discharged into the sewer system. Proposed commercial rates range from $302.84 a year for a 5/8-meter user to $31,749.93 for a user with a 10-inch water meter.

A system that doesn’t consider consumption has City Council President Bruce Place concerned. Place said yesterday he wants to understand the impact on the business community and would oppose a system that fails to consider water consumption. Janine Burke, executive director of the authority, said that under the proposal, the average homeowner now using 9,700 cubic feet of water a year or 73,000 gallons is paying $462.56. Under the new system the same homeowner would pay $436.67, a savings of about $35. However, since the fee is not based on water consumption, low water users – say a homeowner living alone who uses only 500 cubic feet of water a year – would end up paying more.

“The devil is in the details,” said Burke. She expects those issues will be aired at meetings before the council, which she is hopeful could start within the next couple of weeks. Her goal is to have a new rate schedule in place by June so that it would be reflected in the July billing.

But while a reduction in residential rates would be music to the ears of the City Council, there are major hurdles to the proposal. Top on that list is a connect-capable fee that has come before the council but has never been acted on. A $400 fee was proposed as a means of prodding those with access to sewers to connect. There was no logic to the amount other than it was believed to be high enough that residents would opt to connect.

With the study Burke says the authority can now back up how it arrived at a fee.

As Bebyn told the authority Thursday, the proposed $271.50 connect-capable fee reflects the cost of maintaining the infrastructure from the pipe in the ground to the treatment plant so that it will be there when the property owner is prepared to connect. Foregoing that charge puts the entire burden on the current users. As there are 5,409 property owners who could tie into the sewers but are not connected, the fee would generate in excess of $1.5 million annually.

Second for the authority is the proposed $84 per linear foot assessment charge. The study recommends maintaining the current 6.3 percent interest rate for those property owners choosing to finance the charge over 20 years with the authority.

As authority board member Gary Jarvis observed Thursday, the authority failed to update the assessment rate to accurately reflect the costs of construction for many years thereby creating a deficit that was covered by the city. The authority is designed to operate as an enterprise fund, meaning that fees pay for operations and capital improvements.

Councilman Steve Merolla (D-Ward 9) has problems with both a connect-capable fee and an assessment rate of $84 a linear foot. He accused the authority of bad management, saying there is waste and that “under the guise of expansion” the authority is paying off the deficits of the past. He favors a moratorium on any new construction until “we get this house of cards in order.”

The last assessment fee was $52 a linear foot, which was charged homeowners that came under Phase I of the Governor Francis Farms project. This would mean homeowners who come under Phase II would be paying $84 a foot. For a property owner with 100 feet of frontage, conceivably neighbors, the difference is $3,200.

Authority board member Peter Ginaitt applauded the design of the plan “so we can sustain the operations of this business.” He also urged people not to lose sight of the environmental role of the authority as it relates to rivers and streams and Narragansett Bay.

Authority Chairman Fred Sullivan urged an open discussion on the options facing the authority.

“That’s the facts,” he said of the report, “it’s not hidden stuff. Let’s have comment.”

Board member Aaron Guckian said information should be available to the public. The report is posted on the authority Web site. Copies will be available at authority offices and the library.

Burke said the projected $14 million cost to upgrade the wastewater treatment plant to comply with DEM’s stricter regulations for the removal of nitrogen and phosphorus is considered in the study. That project is not anticipated to start until 2014 or 2015, if undertaken at this time. Because of financial hardships faced by municipalities, Rep. Joseph McNamara has introduced legislation, which if passed, would enable the city to delay the upgrades.

The study finds the authority would need to impose an overall 12 percent increase in usage rates without implementation of a connect-capable fee. A system that also included a pay-as-you-go plan for capital improvements would require a 23 percent overall increase in rates.

“At least the study was done,” Place said.

While he wants to look further into the impact of the proposed system, Place questioned what authority the council has to set the rates. He said most of the sewer rates are the responsibility of the mayor and the authority.