Aquarion/City of Ansonia
Aquarion officials and members of Mayor David Cassetti's administration pose for a photo after closing the WPCA sale on Dec. 3, 2024.
ANSONIA – About 43 percent of the $41 million the City of Ansonia made after selling its sewer system went toward three municipal budgets, officials said.
That 43 percent represents about $17.7 million of the total sale to Aquarion, a deal that closed in late 2024.
Meanwhile, about 32 percent of the $41 million sale went toward paying down WPCA debt, specifically an old loan taken out to build a new sewage treatment plant under Mayor James Della Volpe’s administration.
During a June 10 Aldermen meeting, city budget director Kurt Miller presented a general list of things the city spent the WPCA money on.
Miller’s list included:
$5,000,000 toward last year’s budget (the 2023 – 2024 budget cycle)
$7,429,365 toward the current budget (2024 – 2025)
$5,250,000 toward next year’s budget (2025 – 2026), which starts July 1
The Budget Bolstering
In the run up to the WPCA sale, officials in Mayor David Cassetti’s administration said the WPCA sale would prevent large mill rate increases. That would be accomplished by putting the money into the budget and using it as revenue to offset potential mill rate increases, they said.
Officials also said they would use the money to start a “rate stabilization fund”: that is, putting some WPCA sale money aside to use for customers when Aquarion raises the rates.
Hold On …
The city’s use of WPCA money to bolster its operating budgets is not without critics.
It was cited as one of the reasons S&P Global Ratings downgraded Ansonia’s credit outlook from stable to negative in 2024.
S&P Global Ratings issue bond ratings for municipalities. Bond ratings are essentially credit ratings, and affect how much a community can borrow and at what interest rate.
S&P Global Ratings didn’t lower Ansonia’s bond rating, but expressed concern about budgets relying too heavily on the WPCA money.
“The negative outlook is driven by Ansonia’s plans to use one-time proceeds from the sale of $41 million of wastewater assets to fund recurring budgetary expenditures through fiscal 2030,” the report stated.
The WPCA sale is also one of the reasons state Rep. Kara Rochelle cited in her support of language in the state budget that forces the Cassetti administration to appear in front of the Municipal Finance Advisory Commission, a group that is expected to start reviewing Ansonia’s budgets and audits at a meeting scheduled for Sept. 10.
And Rochelle’s Democratic colleagues on the local level have been hammering the Cassetti administration on social media over the WPCA sale.
“The city’s finances are in chaos, they’ve run years of dishonest budgets and deficits, they sold our WPCA and used most of the $41 (million) to plug up budget holes,” the Democrats posted June 1.
The Cassetti administration has countered these claims by saying they are politically motivated. On June 24 the mayor uploaded a video to the city’s Facebook page touting the release of a “clean” outside audit, with no major issues found. The Ansonia GOP posted an image directed at Rochelle, saying “if the audit’s fine, she must resign.” The Democrats called Cassetti a liar.
While the 2024 S&P report expresses concerns over the use of the WPCA sale proceeds, it also says that using the money to bolster the budget is OK – provided that Ansonia can manage and plan its finances as promised.
The S&P report states that part of that plan has to include mill rate increases.
“In our view, Ansonia will maintain a healthy reserve position over the outlook horizon, exceeding those of similarly rated peers despite planned drawdowns,” the report states.
At an Aldermen meeting on May 5, Miller said the city will wind down its use of WPCA money over the next few years.
“We’ve been using one-time revenue sources to pay for recurring expenses. So essentially what we’ve been doing is we’ve been paying our mortgage with our savings account,” Miller said.
The city’s position on how the WPCA money would be used has been confusing over the past year.
In May 2024, during a livestream interview with The Valley Indy, Miller said that Ansonia did not need money from the WPCA sale to balance its budget.
However, at the same time, Cassetti contradicted Miller by saying the WPCA sale would fill a “hole” in the budget.
Miller said recently that his 2024 statement was based on the assumption that the city would be getting money from a fuel cell project, but that project hasn’t been built yet. So the WPCA money was used to bolster the budget.
In addition to Miller’s statements in past meetings, The Valley Indy interviewed him in May.
The Valley Indy sent follow-up questions to Miller in June seeking specific information about how the WPCA money was used in the city budgets, but Miller was unavailable to elaborate.
Past WPCA Debt
About 32 percent of the $41 million WPCA sale proceeds, or $12.9 million, went to pay off old debt the city incurred when it built a new sewage treatment plant.
Up until the WPCA sale, ratepayers were paying back that loan in the form of an annual “special project fee.”
That fee was $230 per year for residential ratepayers. It was separate from the monthly sewer bill.
If the WPCA hadn’t been sold, then ratepayers would have finished paying off the debt by 2028, according to sewer administrator Rita St. Jacques.
However, administration officials have said the fee would have stuck around for longer. They have argued that more plant upgrades were needed, and that the city would have taken out more loans to pay for them.
The “special project fee” has ended following the WPCA sale. The final bill was issued last year, according to Ansonia Corporation Counsel John Marini.
Solar Carport Construction Costs
Miller’s WPCA sale spreadsheet includes $2,380,159 that was used to construct solar panels at the public parking lot on E. Main Street. Click here for a recent story on those panels.
However, Miller said that the city will get most of that cost reimbursed by the federal government. He said that about $1.9 million will be returned to the city in the form of tax credits. Dave Hannon, the chair of the Ansonia Democrats, has said that that number is wrong.
The Valley Indy asked both Miller and Hannon for sources for their numbers, but had not received any as of June 30.
After the tax credits, Miller said, the panels will generate about $125,000 in revenue per year. The panels will add power to the grid, and the city will receive credits based on the amount of power added.
He said the construction will be completely paid off within about five years, and that the panels will continue to generate revenue after that.
Rate Stabilization Fund
The spreadsheet includes $7 million used to create a ‘rate stabilization fund.’
That fund is the city’s effort to offset rate increases imposed by Aquarion. It applies credits to ratepayers’ sewer bills.
New rates went into effect last December – the month of the sale. The new rates are about 38 percent higher than the old ones. However, you might not have noticed.
That’s because the ‘rate stabilization fund’ is intended to entirely cancel out the rate increase this year. The higher rates are scheduled to be phased in over the next 10 years.
So, if your monthly sewer bill looks pretty much the same as it did this time last year – that’s the ‘rate stabilization fund’ at work.
Capital Infrastructure Projects
Last on the list is $375,000 for ‘capital infrastructure projects.’
Miller said in the Aldermen meeting that that money was mostly used for miscellaneous road work.
“We did some sidewalks, we did some drainage, we did some road work, some things like that. We just cleaned up a few small little issues that we had,” Miller said.
