Norwalk CFO expresses confidence ratepayers can handle WPCA’s coming $66.6M expense

Norwalk plans $66.6 million in work to upgrade its wastewater system over five years, to meet State mandates negotiated last year.

Where will that money come from? In April, Norwalk Chief Financial Officer Henry Dachowitz said the Water Pollution Control Authority (WPCA) has it planned to minimize its effects on rate payers.

WPCA hired a financial consultant and developed a “pretty sophisticated” model to avoid a “roller coaster of rate changes” for its customers as it invests in the system, Dachowitz told the Council Finance Committee. He explained that WPCA is an Enterprise Fund, operating from fees charged to its customers rather than taxpayer dollars, with leaders targeting the fees to meet expenses.

Supervising Environmental Engineer Ralph Kolb and his team “understood that there are major capital improvements that are required in the next five to 10 years,” Dachowitz said. “The model allows them to project operating expenses, capital budgeting requirements, and translate that with projections for borrowings and the interest rate costs of those borrowings, which come back into the operating budget as debt service,” Dachowitz said.

It “integrates general operating expenses, changes in population trends, in usages, and in capital expenditures, combined with the financial impacts, so that the users are treated fairly with reasonable consistency for their expectations,” according to Dachowitz.

Rates are projected to rise consistently and “during the course of those five to 10 years, sufficient revenue will be generated to cover all of those expenditures,” Dachowitz said. “It also allows me to borrow the funds opportunistically in the market as best we can. So that we get the capital funds at the lowest cost possible. And we have the funds available when the WPC a needs to expend those funds.

Norwalk Chief of Operations and Public Works Vanessa Valadares has said WPCA has a “strong capital reserve.”

The hefty estimates are not unheard of. In 2015, then-DPW Director Bruce Chimento said the wastewater treatment facility had gone through a $38 million upgrade from 2009 to 2012. Work included new main lift pumping, screening, and grit removal.

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