The mayor of Pittsfield, Massachusetts saw her proposed water and sewer rates for the coming year pass a key hurdle this week.
Since passing Mayor Linda Tyer’s $74 million spending plan on a new EPA-mandated wastewater plant in April, the Pittsfield city council was expecting Tuesday’s meeting.
“The water and sewer and wastewater operations are funded completely by the water and sewer rates. They’re not supported by the general fund, which is why this is so critical to get these rates in order to fund all of those operations," said Commissioner of Public Services and Utilities David Turocy.
He says while he was looking into setting the coming year’s rates to pay for rising operation costs and new projects, a single year’s planning would not suffice.
“We kind of looked ahead and tried to plan that out," Turocy told the council. "Recognizing that was probably beyond my capabilities, we’ve got a consultant to look at the past revenues and expenses, project five years, and come up with a comprehensive plan for water and sewer rates.”
Turocy introduced David Russell of Russell Consulting, formerly the chief engineer for the Massachusetts Department of Public Utilities and the special consultant to the chief economist for the public utilities of New Jersey. The city spent $10,000 on his services.
“I think either in the water or the sewer, you’re the lowest in the state – and the other, you’re either the lowest or very close to it," said Russell. "So even though the increases are not small, you I think have been experiencing very low rates for many years.”
He began with the city’s water rates. Using current rates and projected expenditures to forecast the next seven years, Russell said the city faced an estimated deficit of $175,000 in 2019 if rates were not raised. In his calculations, that could rise to almost $5 million by 2025.
“We have a 20 percent increase for the second half of this fiscal year," said the consultant, "so in essence, even though the rates are going up 20 percent the fees that you’re charging customers would go up just 10 percent for one year. The next year they indeed would be up the full 20 percent.”
After that first rise, there would be a two-year rate freeze. Then, rates from 2022 to 2025 would increase a further 45 percent over four smaller increments.
“So by the end of the seven-year period, your rates would actually be 83 percent higher than they are currently,” he told the council.
Russell said it would still keep Pittsfield’s rates comparatively low to the rest of Massachusetts. For fiscal year 2019, his estimate of an almost $28 rate increase put the annual charge for a residential customer in Pittsfield at just over $300.
“By 2025, the state average is $814, and with this proposed plan – recommended plan – you’re up to $508, which is about 62 percent of the state average,” said Russell.
For sewer rates, Russell similarly saw looming deficits in the horizon – but suggested a steeper rate hike at the outset of the seven year projection.
“So the charges in 2020 would be 50 percent higher, the charges in 2019 would be 25 percent higher given that the rate’s only in effect for half the year,” he explained.
Subsequent hikes would be 15 percent in 2021 and 12 percent in 2023, for a compounded increase of about 93 percent by 2025. According to his projections, this would still leave the city paying far below the state average. In 2017, most Massachusetts ratepayers spent over $800 a year on sewer costs while Pittsfielders paid just over $200.
“These levels of $2 to $4 million for your sewer system are very reasonable," said Russell. "Likewise on the water systems. $2 million – perhaps even as much as $3 million – are a reasonable level for utilities of these sizes.”
The subsequent debate over the rate increases was protracted, with councilors like Melissa Mazzeo demanding more information from the city and saying a vote was impossible without other options.
Ultimately, both proposals were accepted by the barest majority – votes of 6-5.
Councilors Christopher Connell, Donna Todd Rivers, Melissa Mazzeo, Kevin Morandi, and Anthony Simonelli did not support either proposal. At its next meeting, the council is set to take a final vote on the rates, which, if approved, would go into effect in January.
