Haverhill city councilors this week agreed to raising water and sewer rates to cover environmental mandates and other growing expenses, but some expressed support for a tiered water rate that would move more of the burden onto commercial users.
During a continuing review of Mayor Melinda E. Barrett’s proposed spending plan, councilors agreed to 9.9% water and 4% wastewater rate hikes for the year beginning July 1, with expectations of larger increases in the next two years. Public Works Director Robert E. Ward noted rates would have been higher if not for the department using surpluses to hold down rates. Council President Timothy J. Jordan questioned the strategy.
“Looking to give relief by having only a 4% increase here, but then the projection that you have is a 13.9% increase next year and 14.5% the year after that. Kind of going back to Angel’s earlier overall presentation, we’re looking at taxing basically to levy limit next year. So, we’re not going to get relief to that end on the taxpayer side. In fact, we’re probably going to see a similar jump, if not a slightly bigger jump next year,” Jordan said.
What’s worse, he noted, city Chief Financial Officer and City Auditor Angel A. Perkins anticipates larger property increases in two years as well.
Ward summarized water rates would increase from $5.93 to $6.52 per hundred cubic feet, an impact of $36 per year on the average user. Wastewater rates would go up from $7.95 to $8.27 per hundred cubic feet, or $24 a year for the average user.
Sewer expenses are projected at $17.4 million, leaving a $751,383 deficit if the rate hike is kept to 4%. Cost drivers are aging infrastructure, federal mandates to separate wastewater and stormwater and higher costs for energy, chemicals, labor and sludge disposal. Water expenses are projected at $15 million, leaving a deficit of $556,721 if the rate hike is kept at 9.9%. Here, cost drivers are treatment plant improvements, lead service line replacements, aging infrastructure and rising operational costs.
At the same time, Ward said, the city is contemplating moving to tiered billing which would provide relief to smaller residential and commercial users. He added, tiered billing—three tiers each for commercial and residential—not only provides relief for the smaller residential and commercial users, but they can promote water conservation. The lowest projected rates would be $5.40 for residential water users and $5.94 for commercial users.
Ward 3 Councilor Devan M. Ferreira praised the idea and said it was a “dream come true” because of the conservation incentive.
Ward 2 Councilor Daniel R. Diodati, however, questioned the fairness of making commercial users pay more than residential users.
“I like the idea of the tiered billing. What I do not like, though, is the non-resident users necessarily being charged more. The tax burden is shifted to the commercial properties pretty significantly and I don’t think it would be fair to our businesses to have to pay a higher rate than our residential users,” Diodati argued.
Barrett said the soonest she will be ready to present a tiered billing system is early next year.