Home News and Features City Council approves 8.2% Water/Sewer Rate Hikes

City Council approves 8.2% Water/Sewer Rate Hikes

image of kitchen sink with faucet running and hand under the water.
Photo courtesy of Petras Gagilas/Creative Commons
After a tense meeting last week, and despite one resident saying she cannot afford more rate increases, the Montpelier City Council approved an 8.2% increase in water and sewer user rates and passed the FY2023 water and sewer fund budget.

The average user will see an increase of $9.80 combined monthly, or $117 annually, city officials said. The new rates go into effect on July 1 and will determine bills for the period ending September 30, and due December 15.

Just before the council approved the rate increase, Montpelier resident Vicki Ann Lane, attending virtually, said “I beg of you, I can’t afford any more increases.” Lane described herself as an older woman on a fixed income, struggling with gas and grocery prices. “It’s not sustainable,” said Lane. “We just can’t do it.”

Mayor Anne Watson acknowledged that the situation is “really hard.” Councilor Conor Casey also expressed understanding, “but,” he said, “what this funds are essential services here, and we have to pay for it, one way or the other, and this is the most logical way to do it.” 

City Manager Bill  Fraser said occupancy in large buildings, such as the National Life Building, is lower this year, yielding lower revenues. “We need to deliver the clean water and sewage treatment and everything to citizens,” Fraser said, “so I appreciate what Vicki said. She’s right, but the cost to do these systems is also up.” 

Councilor Cary Brown said: “I think it’s just important to really understand that 8.2 is a huge jump and a lot of people are going to feel that. I’m going to feel that. But it’s not arbitrary. It comes from somewhere that it’s connected to our needs and our use.”

Councilor Casey moved that the budget be approved. Councilor Dona Bate seconded the motion and the budget passed. 

The exchanges were part of a difficult meeting in which city government critic Stephen Whitaker was removed by police and, later, during the water and sewer rates discussion, there was an exchange regarding Councilor Jennifer Morton’s comments about water use and her indigenous heritage.

Recent posts on Front Porch Forum have reflected residents’ concerns about unclear water bills, the accuracy (or lack) of meter readings, and increasing water and sewer payments.

Water Fees: Based on a Formula

When the council began discussing the proposed rate increases, Montpelier Finance Director Kelly Murphy presented the proposed water budget, noting that, with workers and visitors not having returned to Montpelier following the COVID-19 pandemic, revenues were down. She explained the formula Montpelier uses to determine annual rate adjustments: Consumer Price Index + 1%. She confirmed that this is the method for determining rates rather than basing them on specific budgets.

The Consumer Price Index is a measure of inflation calculated by the federal Bureau of Labor Statistics, which bases the figure on changes in the prices of certain consumer goods. The 1% piece of the formula is for projects in the Master Plan, Murphy said. The Consumer Price Index for the northeast region, which Montpelier used in its calculation, was 7.2%. 

In a follow-up email to The Bridge, Fraser said: “Rate policy calls for inflation plus 1%. The additional 1% is for funding backed up capital needs. We then determine how much revenue that rate will generate (based on actual and projected water/sewer usage). The budget, then, has to fit within that amount of revenue. So some items are included and some are not depending on the available funding. Therefore the rates and budget are directly linked. But we estimate revenue first, then make the budget fit so that we don’t go above the rate policy.”

Prior to using this calculation, “There weren’t really adequate investments in the infrastructure,” Murphy said in a subsequent interview, “and that’s what the Master Plan aimed to do.” 

The water budget funds staff, supplies, maintenance, and equipment such as radio upgrades and vehicles, Murphy said. Costs include $30,000 each for pipe fittings and for meter supplies, services such as the asset management software Cartegraph, and FOG sealing the water treatment plant’s parking lot (a way of treating the pavement to ensure a longer life). Another $60,000 was earmarked for the Central Vermont Medical Center pump, and $20,000 for water main adjustments, Murphy said. Items such as electric valves and small water line improvements were not included.

Revenue Generating Leachate No Longer Accepted

Sewer fund revenues, too, were down, Murphy noted, and the same formula yielded an 8.2% rate increase. Murphy said leachate revenues for handling leachate from landfills outside the city are not included in the budget because E. coli and ammonia concerns caused the city to suspend accepting it. The city stopped accepting leachate (for which it charges a fee) at the beginning of May, according to city engineer Kurt Motyka. 

“We had a high e-coli count leaving the facility and expect it was related to leachate interference with the ultraviolet disinfection system,” Motyka explained in an email, saying about $100,000 was lost from the FY22 budget after suspending this revenue stream, and about $400,000 was removed from the FY23 budget. 

A new staff position, supplies, lab work and engineering, maintenance and other needs, as well as “funding for capital improvements” all feature in the sewer budget, Murphy noted at the meeting. Cummings Street work ($75,000) and a half-million-dollar pump station replacement, which need to be done and will therefore be addressed in the future, were not included because there was no room for them in the FY23 budget, Murphy said.

Increased Rates Don’t Include $19.6 Million in Bonded Items

Murphy added that the FY23 budget numbers were “associated with revenue downgrades” and do not include the $16.4 million Phase II work at the city’s treatment plant, which voters approved on Town Meeting Day, or the $3.2 million East State Street project, both still under assessment, she said. Although approved, money is not being spent on the large projects until plans are finalized. One of Murphy’s slides stated “Future rates will be assessed based on projected experience and grant awards, cost off sets (sic) have been identified and grant funding applied for. FY23 is reflective of current conditions and reconciling revenues and expenditure to stabilize funds to support future projects.”

Morton: Water Protection Means Learn to Use Less

After Murphy’s presentation on water and sewer rates, the Council continued its discussion and questioning regarding the City’s plan. Fraser noted that costs to maintain services had risen, while water use revenues from some major Montpelier businesses and government offices were down. 

Murphy added that the rise is not out of line with the historical pattern of the past five years overall, although it is a large jump for one year.

Council member Jennifer Morton, who is of Native American descent, said: “Seems like an apropos time for me to get on my Indigenous soapbox. Water. We can’t live without it.” 

Morton said  people must manage their water use and tighten their belts as necessary. “And it may seem a little weird that I’m getting emotional about water,” she said, “but I’m a water protector, … I am charged with that by my tribe, by my people, and I know that this inflation is going to affect everybody. I mean, everybody is going to feel it, but it’s going to continue unless we learn how to use less, unless we learn how to consume less, unless we learn how to let our lawns do what they’re going to do, figure out ways to shower shorter.” 

Morton added that measures are necessary to ensure water is left for young people and generations to come.   

Councilor Jack McCullough noted that historically, rates have occasionally remained unchanged, or jumped, so “I think the policy of having steady consistent increases was really the way to go.” 

Brown said she and Lane are likely similar, with more water costs than they use, and suggested house-sharing as a possible solution, because maintaining a household on one’s own can be difficult.

Watson asked if it would be possible to see how many users “are using significantly less than the minimum charge” for which users are billed, and whether the current billing system makes it difficult to decrease one’s bill even with reduced water usage. 

Council member Brown observed that “you can reduce your water usage a bit and still not see any difference in your bill.”

Testy Exchange About Indigenous Comments

At this point, Lane said: “At the risk of getting myself arrested like Stephen, it is more than hard. This is more than hard. Saying it’s hard and you realize it’s hard is like saying, oh, yes, we need thoughts and prayers at the next school shooting.” 

Lane said with current billing practice, it was impossible to determine one’s water usage. Lane added, “And to Jennifer’s point, I am a Vermonter. I am a native Vermonter. My ancestors were here in the 1600s, so yes, I guess yours probably were here first, but I grew up with … the Vermont ideal and devotion to the land and the water and everything. So don’t tell me that your tribe is any different than my tribe. Because my tribe had a tremendous appreciation for water, sea, land, sky, trees, forests, just don’t tell me all of that “it’s going to be hard.’”

Watson thanked Lane, but said, “I would ask that we consider with more respect the Native perspective.” Casey, too, asked for greater sensitivity and said he found Lane’s comments about Indigenous people offensive. Casey added that comparing water billing challenges to offering “thoughts and prayers” after school shootings was “completely out of order.” 

Council member Lauren Hierl, too, offered gratitude for Morton’s perspective. Morton, meanwhile, gathered her things and rose to leave.

At this point, the Council opted to take a break. 

Upon returning, councilors approved the increased water and sewer rates.