Water and Sewer Rate Hikes Approved

Proposed increases in Melrose's water and sewer rates, driven by lower consumption and Massachusetts Water Resources Authority (MWRA) assessments according to city officials, received unanimous final approval from the Board of Aldermen on Monday night.

As a result, the average Melrose homeowner will see a $42.50 increase in their water and sewer bill next year, a 4.6 percent bump over the current average bill.

The rates as approved are:

• Residential water rate increases by 40 cents to $5.65, a 7.62 percent increase over this past year's rate.
• Commercial water rate  increases by 50 cents to $6.95, a 7.75 percent increase.
• Combined sewer rate  increases 25 cents to $9.60, a 2.67 percent increase.

City officials repeated Monday night what's been and when the —that the rates are largely driven by increased assessments from the MWRA and consumption being down across the MWRA system, which lowers revenue.

The MWRA assessment accounts for more than 52 percent of the water budget and 83 percent of the sewer budget. The next largest factor in each budget is debt, which accounts for more than 18 percent of the water budget and almost 7 percent of the sewer budget.

On the subject of debt, Patrick Dello Russo, Melrose city auditor and chief financial officer, said maintaining the city's overall debt limit at 5 percent is healthy and shows bond rating agencies that Melrose is investing in its infrastructure and improving, but not taking on too much debt at once.

There are no new water or sewer projects included in next year's budget. Incoming Director John Scenna said that his department will undertake a study of both the water and sewer systems before bringing new proposals to the aldermen in the fall.

Conserving Water Ends Up Costing City

Scenna also reiterated that Melrose residents conserving water actually drives rates up, because budgets are based on projected revenues that are in turn based on a history of consumption.

"When people don’t consume to that history, there’s that shortfall in revenue," he said. "We’re not alone: 29 other communities of the 60, about half of the MWRA communities, had revenue shortfalls."

As of Monday, this fiscal year's water budget is in the red to the tune of $94,659, Dello Russo said, and the sewer budget has a deficit of $428,177. Last year, within the last two weeks of June, the city brought in $92,850 in water revenues and $173,326 in sewer revenues, which means there's a possibility that Melrose will cover its cost in water this year, but possibility that the fiscal year will end with the sewer budget still in the red.

"That again, is driven by the fact that consumption is down and when consumption is down, all else being equal, revenue is down, and that’s what drove this position we’re in today," Dello Russo said. "What we finalize what that deficit will be—hopefully it will strictly be in the sewer division and not water—we will be before this board requesting an adjustment so we can address the deficit."

Alderman at-Large Don Conn, Jr. again blasted the MWRA, as he did when the rates first became before the board, and likened the city being penalized for conserving water to "something out of 'Alice in Wonderland.'" He mentioned asking the administration four years ago to cut back on new projects and said he was glad there aren't any new projects in the works for the coming year.

"I’m going to support the water and sewer rates, because I have no solution to this problem and only a demagogue votes against something he can’t provide a solution for," he said. "I'm very unhappy to vote for these raises."

Impact Of Late Bill Due Date, Discounts on Budget

In a lengthy back-and-forth, the aldermen raised several questions before voting, such as making the due date for bills so close to the end of the fiscal year and the possible creation of reserve water and sewer funds, which the administration had proposed in past years.

During the public participation portion of the meeting, Arnold Koch—the only resident to speak during the public hearing about the rates, either when first opened on June 4 or when re-convened Monday night—pointed out that residents over 65 can receive a 20 percent discount on their water bill, if their yearly consumption doesn't exceed 6,000 cubic feet.

Nearby communities that Koch surveyed did not have discounts as steep as Melrose's, he said, adding that the ordinance creating that discount was created in 1989 in a "drastically different economy." He also added that much of the MWRA's own debt comes from a court order to clean up Boston Harbor, which he argued should've had a sunset clause to get the MWRA "back to the basics of service and maintenance," and that the water and sewer enterprise funds avoid a revenue cap under Proposition 2 1/2, which also eliminated the ability for residents to deduct water and sewer bills as part of their property tax.

Scenna acknowledged that when it comes to the senior discount, "it seems we are much more consumer friendly" than neighboring communities, and that the discount is one of several items he wants to study to determine its impact on the budget, and present findings to the aldermen this summer.

"Throughout this process, there's at least a handful or more issues that stick out in my mind that we want to work with the board throughout the summer regarding policy: second meters, senior discounts, the issue of billing and scheduling .. why are we putting ourselves in the situation of waiting until June 29?" he said. "Those are all issues … we’d like to in our attempt to leave no stone unturned … we discussed bringing those issues to the forefront very early in July."