Expect To Pay More For Water

By: Tim Wood

Topics: Groundwater protection , Drinking Water

A new iron and manganese water treatment facility is under construction off Morton Road. A second treatment facility, estimated to cost $9 million, is called for in the water department's capital plan. Debt to finance the project would be covered by increased water rates now under consideration. TIM WOOD PHOTO

Revenue Needed To Fund Infrastructure Improvements

CHATHAM – A proposed change in the way water use is billed will increase the cost of town water between 10 and 37 percent for most households and businesses.

The rate changes eliminate the current allowance of 1,000 cubic feet of water use in the basic residential minimum charge, substituting a lower minimum charge that covers the operating costs of the water department and billing customers for all actual water use, a standard practice in most communities, according to the department's consultant.

“The basic philosophy is you're going to pay for what you use,” Douglas Gardner of the Pioneer Consulting Group of Harwich said at a presentation of the new rates last Thursday. “You're not going to be receiving any water in the minimum charge.”

The increased rates will help cover the cost of capital projects and debt necessary to increase the system's capacity, build new water storage tanks and a treatment plant, and replace aging water mains. Increased water use in recent years has strained the present system, especially during peak summer months.

The new rates aren't likely to be implemented until 2019, said Water and Sewer Advisory Committee Chairman Larry Sampson. After last week's presentation, the group is fine-tuning the proposal, looking especially at differentiating between high water users like restaurants and those with irrigation systems, which are generally felt to be driving increased use.

The new rates bill users per unit, with each unit equal to 100 cubic feet of water (about 748 gallons). All customers would pay the same per-unit rate. Like the current system, there will be lower winter and higher summer rates, and the per-unit rate increases with consumption.

Residential customers with the basic five-eighths inch service, the majority of the department's more than 7,000 water users, would pay a quarter winter service rate of $17.50 and a summer rate of $35. Currently those rates are $26.25 in the winter and $41.25 in the summer, including up to 10 units of water (1,000 cubic feet). The service rate would cover the approximately $615,000 cost of operating the department, including staff, benefits, billing, vehicles and equipment, Gardner said.

Proposed consumption rates start at $1.75 in the winter and $3.25 in the summer per unit for up to 10 units, rising to $3.95 in the winter and $6.95 in the summer for more than 100 units.

For a low water user – about 38 units or 28,424 gallons per year – the annual cost would be $215.25, an increase of $58.25 or 37 percent. A medium user would pay $359 per year, a $70 or 24 percent increase, while a high user would pay $1,079 per year, a $95 or 9.65 percent increase. “Very high” users would pay $3,290 annually, a $614 increase, or 22.9 percent.

It's been more than a decade since the town increased its water rates. While total revenue depends on consumption – which can be variable, depending on weather conditions, Gardner said – the new rates should generate an additional $750,000 to $1 million annually.

Water revenue covers all of the department's operating costs as well as capital projects and borrowing for major projects. Capital projects include $1.2 million to repaint the 1.3 million gallon water tank next year; $1.8 million to replace the 1.25 million water tank in 2020; $1 million a year for water main replacement from 2020 to 2022; and $3 million for a supplemental water tank in 2022.

Over the next five years, the department will also be taking on some $15 million in new debt, Gardner said, including $9 million for design and construction for a new iron and manganese treatment plant, $3 million for a new storage tank and nearly $3 million for pump installation on two new wells and connecting them to the treatment plant.

“We're not just raising the rates and putting it in the bank to sit on the money,” Gardner said. “We're actually going to reinvest those rates into the water system.”

The need to increase capacity and infrastructure is driven by consumption, which has increased significantly in recent years, said Sampson. The department has been “dancing with the devil” in terms of its ability to meet peak water demand in July and August, he said. At those times, the department only has 14 hours of storage capacity available, and an emergency, such as a major fire or a bacteria outbreak, would pose a major problem. He noted that a water main break on Bridge Street last year nearly drained one of the water storage tanks “like that.”

The town exceeded the maximum water pumpage allowed by the state department of environmental protection by 5 to 6 percent before the allotment was increased by 12 percent, he said.

Sampson said the department has been “begging” residents to lower consumption, and data indicates year-round residents are making an effort to use less water in the off season, the same can't be said for the summer. Other than volunteer restrictions, the town has no way to control demand. “Other than rationing water, I don't know how you do that,” he said. Therefore it must address the supply side, he said. Two new wells coming on line this summer will help that situation significantly, he added.

The new rate structure doesn't adequately deter higher use during the critical summer months, said Economic Development Committee Chairman Luther Bates. It's mostly water use for irrigation that drives that consumption,

and some high-usage businesses like restaurants will also be penalized, he said. He suggested an exemption for some commercial establishments.

The committee met again Monday to discuss that idea, and Sampson said they looked at users with the highest consumption, which includes Liberty Commons, Chatham Bars Inn and some private homes.

The new rate proposal includes a separate irrigation rate which would be billed at the highest per-unit amount, but Sampson said the board of selectmen, acting as water and sewer commissioners, previously decided against requiring that irrigation systems be put on separate meters so there could be a separate charge. Some property owners have done that, especially those which are currently or will in the future be on the sewer system, since sewer costs are based on water use; it behooves those customers to separate residential water use from irrigation, Sampson said.

The committee will ask the selectmen soon to revisit that decision, since requiring irrigation systems to be metered separately will allow a lower rate for high-usage commercial customers.

“We're hoping to find a way to use that requirement for a second meter to offset the expense that some of the commercial accounts may bear in this proposal,” Sampson said Tuesday.

The final rates must be approved by the selectmen.

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