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Electric bills to decrease, sewer rates unchanged

Date: 6/26/2012

June 27, 2012

By G. Michael Dobbs

news@thereminder.com

CHICOPEE — Chicopee residents will see electric bills drop, and won't see an increase in their sewer rates this year. The city will also benefit from a positive bond rating.

The city will borrow $4 million that will be used for new police cruisers, an ambulance and replenishing its reserves, while it waits for $5 million in reimbursements for the costs associated with the snowstorm last October, Mayor Michael Bissonnette told Reminder Publications.

He said the city's bond rating is allowing it to borrow the money at .2985 percent interest, which means it costs the city less to borrow than to liquidate investments that are making between 5 and 8 percent interest.

Bissonnette said that $800,000 of the reimbursement would come from the Federal Highway Administration, which provides funds for the cleanup of primary roads after a weather event.

The $4 million loan will also bring the city's stabilization fund back up to $10.5 million, he added.

Standard & Poor's, a bond rating agency, has given the city an "A+ stable" assessment, Bissonnette said, which allows for the low cost of borrowing funds. The agency noted the city's "strong levels of reserves and operating flexibility" as part of the reason for the positive rating.

Bissonnette also said that electric rates in the city will be decreasing starting July 1 with the average customer seeing a drop of $6.25 in his or her monthly bill. He said Chicopee Electric Light Department was passing along the savings of buying power when the cost of natural gas dropped.

The mayor said that the cost of fulfilling the mandate by the Environmental Protection Agency of replacing combined sewer overflow pipes has made an impact on the city's sewer rates and this year the costs will not increase to give residents a one-year break.

Water rates, which were frozen five years ago, will have to be adjusted to pay for the on-going replacement of the city's century old water pipes, he added.

The city has obtained a 0 percent interest loan as part of a five-year capital program to modernize the city's water system by not only replacing water mains but also replacing older water meters that are not accurate, Bissonnette said.



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