Selectmen Seek More Info On Proposed Water Rate Hike

By: Alan Pollock

Topics: Drinking Water

One goal of the rate change is to establish a reserve fund to pay for capital improvements and unforeseen projects, like water main breaks. FILE PHOTO

CHATHAM — Selectmen agree that it’s probably time to consider hiking water rates to better maintain and expand the town’s water system. But they don't want to do so in a way that soaks low-income residents or small businesses.

Meeting as water and sewer commissioners Tuesday, the board held a hearing on a complex proposal that would increase the amount customers pay for water, both to raise revenue for capital projects and to improve maintenance of water mains. A key goal of the proposal, Public Works Director Tom Temple said, is to demonstrate to state regulators that the town is taking steps to conserve water, even as it seeks permission to increase its pumping capacity. Chatham hasn’t reviewed its water rates since 2005.

The town’s water and sewer rate consultant, Douglas Gardner, outlined the proposed changes. Chatham currently bills water customers quarterly using two separate rates: one for summer and one for winter. Though users with larger capacity meters pay more, most residential users pay a minimum charge that includes 10 units of water – about 7,500 gallons – for $26.25 in the winter and $41.25 in the summer. Additional water use is charged by the unit, or every 748 gallons.

Gardner said that some ratepayers, particularly lower-income elders, use far less than 10 units of water, but still pay for it. Rather than increasing rates, he proposes keeping the quarterly minimum charge the same, but only including five units of water in the base price, forcing rate payers to pay an additional per-unit price for additional units. Eventually, Gardner argued, the fairest approach is to charge users separately for every unit of water they use. This change to a conservation-based rate is designed to raise revenue while encouraging conservation.

“Essentially it means the more you use, the more you pay,” he said.

The current rates charge higher per-unit amounts for larger users; those using up to 30 units in the winter pay $2.75 per unit; customers using between 31 and 50 units pay $2.95, and those who use more than 50 units pay $3.15. Under the new proposal, a fourth tier would be added for those using over 100 units of water, charging $3.95 in the winter and $6.95 in the summer. The rates are for standard residential services. The current rates provide higher quarterly service charges for customers who have bigger water meters and use more water.

In addition to the rate change, Gardner recommends that the town create a reserve account to receive any water revenues above and beyond what’s needed to operate the system, retaining those funds for capital projects or emergency expenses. Temple noted that two water main breaks in the last year cost the town nearly $50,000.
Selectmen Chairman Cory Metters said while some of the largest users are people who run irrigation systems, others are businesses like restaurants that simply need to use water to function.

“Are we penalizing those who are trying to make an income?” he asked. “They have to use water, and it’s not because it’s an irrigation system.”

“I don’t think ‘penalize’ is the right word,” Gardner said. “You’re charging them for the water that they consume” and the additional demand they place on the town’s water system, he said.

Luther Bates, the chairman of the town’s economic development committee, said his group disagrees with the proposal because it could harm year-round working people. The committee’s analysis indicates that more than half of the 7,000-plus water users in Chatham use less than 60 units per year. The median user would see water bills increase by 65 percent, while the larger water users would see increases of only 33 percent, he said. And since large-volume users account for much of the water use, the rates would not adequately inspire conservation, Bates argued.

Bates also argued that large-volume residential users should be charged higher rates than large-volume businesses. Boosting water rates would be “yet another impediment to the cost of doing business in town,” he said. Small businesses that create jobs are a key part of helping the town maintain its population of young people, Bates noted.
Reducing town water use by high-volume residential users would lessen the need for new pumps and water tanks, thus reducing the need for rate increases, he argued. Without greater efforts to curb water consumption, “we’re just going to be building more and more wells and more and more infrastructure” and charging ratepayers more, Bates said. The EDC favors an effort to create a “new town water global strategy” that reduces consumption and encourages people with existing residential sprinkler systems to switch over to private wells, he said.

Saying they need additional time to digest the data, selectmen voted to continue the hearing to a future date. Board members said they need more information on how the proposed rate change would increase water department revenues and how those revenues would be used. They also needs to consider a separate proposal for raising sewer rates.

Selectman Dean Nicastro said he needs to understand the idea fully before telling residents that, despite their voluntary efforts to conserve water in recent summers, “now we’re going to jack up your rates.”

“We have to do this thoughtfully,” Selectman Jeffrey Dykens said. The town needs an approach “that doesn’t negatively affect folks who can least afford it.”