Average household to see $160 water hike
Published on November 21st, 2007
STONEHAM, MA - Town Administrator David Ragucci will likely hike combined water and sewer rates by $1 per 100 cubic feet of water after a public hearing on the increases next Tuesday.
Combined with a 60 cent hike in sewer rates last June, the average Stoneham homeowner can expect to see a total $160 jump in water and sewer bills this year, according to figures provided by DPW Director Bob Grover.
Under the proposal, which has yet to be implemented by Ragucci, the only person in Stoneham authorized to set and change the costs, water rates would change from $3.40 to $4 per 100 cubic feet, while sewer charges would jump from $7.20 to $7.60.
“We felt that we could have kept the water rates level-funded, but as we go through each quarter, we realize consumption is quite behind,” Ragucci informed the Selectmen last week. “So we had to increase it quite a bit this time so [our accounts] weren’t running a deficit.”
While MWRA water service assessments have only increased by $52,764 over last year, Grover and Ragucci claim that consumption is down across the town.
According to the pair, although that might lead most to logically conclude that rates should drop — as people are not consuming as much water — the MWRA assessments are fixed for the upcoming fiscal year.
Because of that fixed town bill, if residents don’t use as much water as initially planned, Stoneham collects less than anticipated revenue for the service and must either raise rates or face a deficit.
“What happened is that on July 1, we did not raise the water rates. But when the numbers came in, there was only about $9,000 [in our enterprise fund],” Grover explained. “If the rates are not raised, and consumption trends continue, the water and sewer funds will face a shortfall.”
On the flip-side, sewer assessments from the MWRA jumped by a somewhat significant $237,135 between FY’07 and FY’08. Last June, the Water and Sewer Advisory Review Board recommended that the Town Administrator impose a 60 cent increase on per unit charges in order to cover those costs.
However, according to Grover, with water consumption down, so is the amount of waste being pumped into the sewer system, again driving the need for the rate hikes.
Even if Ragucci was to implement the rate changes, Stoneham would still have lower bills than neighboring Melrose, Wakefield and Reading — although two of those communities are only partial MWRA customers.
Let’s give taxpayers a break
According to Selectmen Paul Rotondi and Robert Sweeney, the town should use a reported $800,000 in sewer enterprise funds to offset the needed increase in water rates.
During the most recent Selectmen meeting, Ragucci did not discuss any plans to hike sewer costs in addition to charges for water service.
Agreeing with the need to bolster available water enterprise account reserves — between $30,000 to $50,000 remains in that fund — Rotondi argued that a corresponding decrease in sewer charges should be imposed in order to minimize the financial burden on local taxpayers.
“If we have a [$800,000] surplus in the sewer accounts, we can reduce that to offset the increase in water,” advocated Rotondi to the objections of Finance Board member John Warren . “If we increase the water bills, why can’t you decrease the sewer bill.”
After Warren pointed out that the Selectmen’s fiscal guidelines call for a significant reserve cushion in each account, Rotondi and Sweeney later suggested that too many indirect costs were being backloaded into the water and sewer rates.
Specifically, the town can slate a certain amount of funding from the water and sewer accounts towards municipal services — for the Town Accountant or Town Treasurer’s work on cutting paychecks, maintaining financial books, and other associated services, for example.
However, in recent years, some town officials have claimed that several DPW employees, as well as equipment bills, have been shifted over to the water and sewer functions, due to the fiscal constraints of the tax levy.
“It’s been a well known fact around here that lots o the time, we bury stuff in the water department,” said Rotondi. “The feeling of the public is that when we buy new equipment, we put it in the water fund. I think we should look at that.”
“We are depending on charging the taxpayers more than they should for water and sewer. And then we throw on a trash fee. So basically, we depend on those fees to get through the budget cycle,” Sweeney added.
According to Grover, who estimates sewer reserves hold $500,000, he has no idea how the Selectmen arrived at their figures, as they relate to an $800,000 sewer fund surplus.
In addition, the DPW director also defended the indirect charges included in water and sewer charges.
“That’s the true cost of doing business. A portion of these departments are included in those budgets, but that’s not unique to Stoneham,” said Grover.
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