Water, Sewer Rates Could Go Up Again

A deficit in the city's sewer budget, combined with a desire to start saving more to account for potential deficits, means City Hall is proposing to further increase the water and sewer rates for this coming year.

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.

ed shreenan July 12, 2012 at 01:18 PM
This is outrageous, they hike the rates already, now they're short, so what screw the property owners. I guess as long as we blow the hundreds of thousands of dollars on all day kindergarten who really cares. This is incompetence at its finest.
chris tremidosi July 12, 2012 at 10:52 PM
I wonder if the aldermen and aldermen at large know the voters have memories. Do they want to be elected next term or give in to the bullies this year? How did the mistake happen. If they are incompetent, why are they still there?
Daniel DeMaina (Editor) July 13, 2012 at 02:48 AM
If by mistake, Chris, you're referring to the sewer budget shortfall, according to the city auditor and DPW, lower than expected consumption resulted in deficit. I'd add that the aldermen have yet to vote on these additional rate hikes. As noted in the story, it will go before them on Monday.
Daniel DeMaina (Editor) July 13, 2012 at 02:54 AM
Ed, something I mean to look into: Because the water and sewer revenues are held in Enterprise Funds set up by the city, which separate those revenues from the general budget (like Mount Hood Golf Course revenues), generally those revenues cannot be used outside of the intended purpose of the fund. For instance, you couldn't take water and sewer revenues and, say, give it to the School Department. What I don't know is whether or not the aldermen can vote to appropriate funds from elsewhere (say, the city's free cash account) in order to make up a budget shortfall in an enterprise fund. I aim to ask that question in advance of Monday night's public hearing.
Dave Gray July 13, 2012 at 01:11 PM
It seems backwards that reduced consumption would lead to higher rates, but there it is. You'd think conservation would lower bills, but only if we were operating pay-as-you-go.
Daniel DeMaina (Editor) July 13, 2012 at 01:30 PM
You nailed it Dave.
Dave Gray July 13, 2012 at 08:56 PM
Question - will that translate to a lower MWRA assessment next year?
arnold koch July 14, 2012 at 03:04 AM
I attended the last hearing on the water/sewer/trash rates and spoke. I was the only one who did. After that my advise to fellow citizens is to "Show Up or Shut Up." !
Dave Gray July 14, 2012 at 03:45 AM
I beg your pardon?. Did I log into Melrose Messages by mistake?
arnold koch July 14, 2012 at 05:45 PM
On Monday evening, the D. P.W. is going to present and ask for a 20 cent increase on the water rate and 42 cent increase on sewer ABOVE the increases we have already approved for fy 13. In water, this is to build in a reserve with the goal of having a ten % reserve in place within three years. In sewer, this is to cover a deficit of $159k in fy 12plus build the reserve.
arnold koch July 14, 2012 at 05:47 PM
On Monday evenint, the D. P.W. is going to present and ask for a 20 cent increase on the water rate and 42 cent increase on sewer ABOVE the increases we have already approved for fy 13. In water, this is to build in a reserve with the goal of having a ten % reserve in place within three years. In sewer, this is to cover a deficit of $159k in fy 12 plus build the reserve. What happened to the money saved from the snow removal ?
Janet Gould July 15, 2012 at 07:47 PM
Every homeowner in Melrose should show up for this meeting...outrageous that we should be asked to prefund a reserve account after absorbing increases in our rates already...if lower consumption leads to a deficit maybe we should all turn on our faucets.


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