Water and sewer rates for the coming year could go higher, as the city aims to address a year-end deficit in the sewer budget and start a three-year savings plan for both the water and sewer budgets.
The new proposal would increase the residential water rate to $5.85, which on top of the previously approved rate increase would result in a 11.43 percent increase over this past year's rate, according to a letter from Department of Public Works Director John Scenna to city officials (PDF attached).
The commercial water rate would increase to $7.20, an 11.68 percent increase (again accounting for the already approved increases), and the combined sewer rate would increase to $10.02, a 7.17 percent increase.
A public hearing before the aldermen will be held on Monday, July 16 at 8:30 p.m. on the proposed rates, which would go into effect on July 30 if approved by the aldermen before then. Any water or sewer used between July 1 and July 29 would be billed at the previously approved rates.
A $158,771 deficit in the fiscal 2012 sewer enterprise fund caused by lower consumption, as foreshadowed by City Auditor and Chief Financial Officer Patrick Dello Russo last month, sparked the request for an increased sewer rate.
Dello Russo told the aldermen on June 18, , that there was a possibility that the fiscal year would end with Melrose's sewer budget still in the red, requiring city officials to go back before the aldermen to request an adjustment to the rates.
Also, the higher rates are part of the administration's three-year plan to save in reserve fund accounts roughly 10 percent of the annual water and sewer budgets, which would allow the city to address deficits or higher than anticipated Massachusetts Water Resources Authority (MWRA) assessments without having to adjust the rates.
The new water rates are projected to raise an additional $175,083 in revenue that the city could put into a water reserve account, separate from the water budget that totals $4,610,554 this fiscal year.
The new sewer rate is projected to raise $393,241, with $158,771 going to knock down the fiscal 2012 sewer deficit and the remaining $234,470 put aside into a sewer reserve account.
Scenna is also requesting a $61,011 decrease in the sewer budget for fiscal 2013, due to a recent reduction in the MWRA sewer assessment, that would bring the sewer budget for the coming year to $6,544,161.