Some Portsmouth Water and Fire District customers will be seeing a nearly 30% rate increase this year, according to a release from the utility. For fiscal year 2015, which began on May 1, the average rate increase will be 28.9%.
According to Administrative Board Chair Philip T. Driscoll, the rate increases are largely attributable to a 19.41% increase in the wholesale cost of water purchased from the City of Newport. The increase from Newport is necessary to pay for the District’s share of the $84 million in debt service required for Newport to replace the Lawton Valley Water Treatment Plant in Portsmouth and to significantly upgrade the Station One Water Treatment Plant in Newport. Construction of the plants began in 2012 and is scheduled to be completed by the end of 2014.
Driscoll also indicated that the Administrative Board has restructured its billing practices. All water customers will be switched to quarterly billing beginning in May of 2014, while a handful of larger water users will be switched to monthly billing. The District will bill one-third of the quarterly customers each month in order to smooth out the staff workload for billing and payment processing. As part of this transition to quarterly billing, in their first quarterly bill only, some customers will be billed for two months of consumption and others will be billed for four months of consumption.
In addition, Mr. Driscoll also indicated that the Board has revised its water rate structure. The Board voted to eliminate the minimum charge that was billed in advance of service, which included twenty thousand gallons of water. Customers will now pay a quarterly base charge and a commodity charge, both billed in arrears, for the water metered during the quarter. In addition, the Board reduced the number of increasing water rate blocks from four tiers to two tiers. The first-tier rate for consumption between one and five thousand gallons per quarter will be $5.74 per thousand gallons. The second-tier rate will be $8.47 per thousand gallons for all consumption over five thousand gallons per quarter. The base charge will vary by meter size and will include the cost for the District to maintain and replace the water meter, radio reader and the curb stop assembly from the water main to the property line. The base charge also will include the cost to process meter readings and bill the customer. For a typical 5/8” residential water meter, the quarterly base charge will be $10.57. William J. McGlinn, the District’s General Manager and Chief Engineer, indicated that the base charges and commodity charges are based on a cost of service analysis conducted by the District and its professional water rate consultant. Although the District is not regulated by the RI Public Utilities Commission (PUC), Mr. McGlinn noted that the cost of service analysis is consistent with the procedures used by the PUC to establish water rates for regulated utilities.
Although the average water rate increase is 29.8%, the actual increase that customers experience in their total annual water cost will range from 20% to 40% depending on their meter size and quarterly water consumption.
For Residential customers:
|Use per quarter (gallons)
||Annual cost 2015
||Annual cost 2014
The last annual water bills have been mailed for two-thirds of the District’s customers, with the final bills scheduled to be mailed during the week of May 19th. Because of the change in billing practices, these annual bills do not include the historical minimum charge for twenty thousand gallons of water in advance. Since the customers paid for the first twenty thousand gallons for FY-14 in their FY-13 water bill, the FY-14 annual bill only includes an overage charge for water used over twenty thousand gallons.
McGlinn indicated that the treatment plant work is required to enable Newport Water, Portsmouth Water and the Navy to meet current and future federal Safe Drinking Water Act water quality standards. Since 2000, the three island water suppliers have seen numerous violations of the act’s Disinfectants/Disinfection By-products Rule, specifically for trihalomethanes, or TTHMs. The rules for the maximum level for TTHMs became more restrictive this year, making compliance by the island’s water suppliers very unlikely with the current state of the Newport treatment plants. TTHMs, which the EPA classifies as a potential carcinogen, are a by-product formed when chlorine used in water treatment reacts with organic matter in the raw and treated water. In addition, Mr. McGlinn noted that the new treatment processes at the plants will be better able to treat the water for seasonal taste and odor problems, which have been a source of complaints over the years.
In addition to the increased cost of water purchased from Newport, Mr. Driscoll said that the current and projected annual rate increases are necessary to help fund the District’s operating costs, technology improvements, capital improvements and debt service.
The Board approved an operating budget of $3,749,089, which results in an increase over last year’s operating budget of 13.47%. The Board approved a total budget of $4,063,224, which includes capital expenses, for an increase over last year’s total budget of 13.58%.
The District’s property tax revenue will remain unchanged, with the exception of the revenue from the addition of new properties to the tax roll. The District’s current tax rate of $0.18 per thousand dollars of assessed value will be adjusted up or down based on the final assessed values determined by the Town of Portsmouth following its current revaluation process. The current annual district property tax is $72.00 for a property assessed at a value of $400,000. Property tax revenue represents only 12.8% of the District’s total revenue.
Driscoll indicated that the Board is working hard to properly maintain and improve the water system, while providing fair and reasonable rates for customers and taxpayers. Driscoll also indicated that the Board will continue to ensure that the cost it pays for wholesale water is fair and reasonable by working with Newport Water and intervening in water rate cases before the Public Utilities Commission, as necessary.
Editorial note: Written from a press release.