With the city's water rates pegged for a 23 percent increase over the next three years, some local business owners and high-volume water users were already saying Thursday that those costs will be tough to swallow.
Gloucester's water rate, city officials have said, would jump from $8.75 to $10.75 per 1,000 gallons in three years as the city begins paying down around $25 million in water infrastructure projects.
How, exactly, the city will pay that off hasn't been decided yet. But city Chief Financial Officer Jeff Towne and Public Works Director Mike Hale have said that users can expect an increase of $2 per 1,000 gallons.
Some owners said Thursday they're concerned about the extra expense hampering their work, while others said they'd take the rates into account if they try to relocate.
"It doesn't bode well for the future of being able to manufacture ice on Cape Ann," said Scott Memhard, owner of Cape Pond Ice on Commercial Street.
When the city increases the water rate, it increases Memhard's raw materials costs. His company uses water for its product and the freezers that hold it.
The company sells ice for fishing vessels, cement companies, ice sculptures, and the familiar five-pound bag. As one of the city's heaviest water users, Cape Pond Ice took one of the hardest hits, along with Gorton's and Good Harbor Fillet, when the city endured a 22-day state-mandated boil water order in 2009.
Gloucester's water rate, Memhard said, makes it harder for him to compete with companies in other cities that have lower rates. Ice companies in New Bedford, he said, run on a water rate of less than $2 per 1,000 gallons.
While the rates already put him at a competitive disadvantage, he said, the infrastructure repairs will help.
Even with better infrastructure, he added, if the rates keep getting higher, it will become harder to business on Cape Ann.
"If we have to pay for our own water, it will effect how we move out or grow," said Bob Ryan of Ryan & Wood Distilleries.
Ryan rents space in Blackburn Industrial Park, and the water bill is covered in the lease. He said his company uses about 350 gallons in a single distilling. If he wants to expand, or move downtown, the water rate will be part of his decision.
He also said, however, the infrastructure repairs are worth it if they prevent another incident like that in 2009.
Hale, the Public Works chief, said the city has finished two of four phases for water and sewer repairs. The first two phases, costing $10 million, followed the 2009 order. Those phases focused on renovating the Babson and West Gloucester water treatment plants.
The Department of Public Works finished the first part of the third phase last year; that part of the project focused on repairing water tanks and pumping stations last year, costing around $4 million.
The City Council, meanwhile, unanimously approved the second part of the Phase III project, a $9.3 million loan, on Tuesday night.
That money will pay for 20,000 feet of pipe replacement in the Commonwealth Avenue neighborhood, following National Grid's replacement of gas lines. It also pays for renovation of the Bond Hill and Blackburn storage tanks, and will cover replacing the Plumb Cove tanks. Phase III work will break ground in late March.
The $13 million repair project paves the way for Public Works to put in a second water line under the Annisquam River. That line would take pressure off the 100-year-old Spooner Tunnel that runs beneath the Blynman Bridge, and is targeted for Phase IV in the department's repairs.
"You've got to straighten that (the infrastructure) out," said Monte Rome, owner of Intershell Sea Foods on Commercial Street.
Rome added that the higher water rate will cause him some trouble; he said his company uses around 5,000 gallons of water each day.
"It's obviously important to have a reliable water service," said Memhard. "But if it's so expensive we can't afford to use it ... then it's not a very good prospect for the future."
Steven Fletcher may be contacted at 1-978-283-7000 x3455, or sfletcher@gloucestertimes.com. Follow him on Twitter at @stevengdt.
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