BERLIN — Last May, the Mayor and Council approved a sewer rate increase aimed at gradually bringing ratepayer’s bills up 21 percent to pay for the new wastewater treatment plant as it came on line. This week, the Maryland Department of the Environment (MDE) said the hike wasn’t sufficient and asked for a five percent increase over and above the former amount.

The increase is set to begin with the July 2013 billing.

When the Town began applying for grants and loans to help fund the wastewater treatment plant upgrade and expansion, the MDE committed to provide $5 million in low interest loans and to forgive $1.5 million of them, making that part essentially a grant.

As the work nears completion — the final stage is expected to start in a few weeks and be completed before the end of the year — the Town submitted all the appropriate documentation to the MDE for the final piece of the funding.

Part of the documentation was a plan for the town’s rate increases that was to assure that the remaining low interest loans, amounting to $3.5 million could be paid while keeping the wastewater system financially viable. It was a plan the MDE didn’t feel provided enough financial cushion.

Because the plant is both an upgrade and an expansion, the most difficult part of the in-town negotiations over the last decade has been to decide how much of the responsibility should fall on current users and how much of it should fall on future users.

Eventually the town struck a compromise that would fund a significant amount of the expansion portion by hook-up fee and ready-to-serve fee increases and the better part of the upgrade by current user fee increases.

The upgrade was necessary to meet new Total Maximum Daily Load (TMDL) guidelines and had to be completed with or without a capacity expansion. Adding capacity was thought to be a way to encourage growth at a pace the Mayor and Councils of the future could better manage.

Under the old plan, the average ratepayer — spending about $38.34 monthly for sewer — would be paying $47.05 by 2016 when the payment plan leveled out. The new increase will bring the amount to almost $49 by 2014 and top out at around $52 by the proposed leveling off date.

While the Council was not completely thrilled about the requirement to up the sewer rates, as a condition of the loan the unanimously supported the hike.

“I’d hate to think of what the rates would be without the $5 million,” Mayor Gee Williams said.