News

Gloucester: Council looks to hike water, sewer rates

By Richard Gaines
Staff writer
Published: July 8, 2008

The City Council tonight faces the task of setting next year's water and sewer rates, which have been projected to increase a combined 25.5 percent.

Public Works Director Michael Hale said yesterday about $200,000 has been pared from the projected cost of operating the sewer system, an amount that will allow a small reduction in the expected increase in the rate.

When the council's Budget and Finance Committee made initial rates three weeks ago, the sewer rate was pegged at $14.48 per 1,000 gallons used, which would have been an increase of 28.3 percent.

Hale said the reduced cost of the system ought to translate to a rate of less than $14. Hale used the phrase "the high 13s."

Hale said the cost of the water system was not significantly changed, leaving the need for a rate of $9.11, up 15 percent from the $7.92 rate for this year.

Although the sewer rate is higher, recent complaints have focused on the water rate.

The greatest concern has come from Cape Pond Ice Co. President Scott Memhard, who wrote to the Times last week and yesterday said in an interview the rate for water is so much higher than rates elsewhere that the future of his company could be compromised.

His business, Memhard said, has an extreme dependence on water and his capacity to compete with ice companies in Salem, Boston, New Bedford, Rhode Island and New Hampshire is undercut by the extreme premium Cape Pond pays for the water it converts into ice after purification.

Mike Costello, executive director of the Chamber of Commerce, called the rates "so discouraging," he said it is essential that the city "think differently" about them.

He and Memhard wondered whether the city would return to the rating concept used in the 1980s that began discounting high volume water usage. Memhard recalled that the first 1 million gallons were billed at a base rate, the second 1 million at 90 percent of base and usage beyond that billed at 75 percent.

The fish processing businesses that used high volumes of water are long gone now, but Gorton's, AmeriCold and Varian Semiconductor Equipment Associates, among other businesses, would benefit from the sliding scale.

Councilor Joseph Ciolino said he would move to reinstitute the volume discount model to help ensure "the survival of the fishing industry and the waterfront."

Ciolino said the city would suffer if Cape Pond Ice were forced out of town or business.

He also said he would ask the council to freeze rates pending a proposal he said he intends to make for a debt exclusion vote that would give residents a choice between adopting the pending rates — which would make the average household's combined bill more than $1,100 — or shifting some costs for the water and sewer systems to the taxpayers.

The debt exclusion allows taxes beyond the 2.5 percent increase level permitted by Proposition 21/2 to retire borrowing. In Ciolino's proposal, the borrowing, he said, would be for costs now supported by the rates that are not necessarily attributable to the water and sewer enterprise accounts.

Ciolino also said he needed to make the "full disclosure" that Memhard is his campaign coordinator, but said his concern was for the survival of the city's only ice company.

The sewer rate has been especially inflated by the $40 million combined sewer overflow project, a mandate of federal and state environmental enforcement agencies. The costs of the project have by decision of former Mayor John Bell and the previous council been put on the sewer rate rather than carried by the tax base.

Because of the city's limited capacity to increase taxes, any decision to put the burden on the tax rate would effectively require a debt exclusion; otherwise, the base would not be able to accommodate the additional costs and continuing projects.

Richard Gaines can be reached at rgaines@gloucestertimes.com.