City Council to Consider 8.2% Water/Sewer Rate Increase

As concerns and confusion swirl on Montpelier’s Front Porch Forum regarding water billing, the city of Montpelier released a proposed 8.1–8.2% increase in water and sewer rates for Fiscal Year 2023 on Friday afternoon in advance of Wednesday’s (June 8) city council meeting, where the rates are the ninth item on a long agenda. 

If approved by the city council on June 8, the rate increase goes into effect only a few weeks later, on July 1, 2022.

“The proposed rate increases of 8.2% are consistent with the existing Water Sewer Master Plan (Consumer Price Index (CPI) + 1%) and are in recognition of current economic conditions,” states a memo from the city finance department to the city council. The memo also states that “While rates are up, budgets are down (Water, −$111K or −3.61% and Sewer, −$39K or −0.08%) because of revenue downgrades related to consumption/utilization and operational changes related to the acceptance of leachate.”

Utility fees (together with rents and commissions) represent 74.5% of the city’s projected FY23 Sewer Fund revenues, according to a revenue summary on the city website (montpelier-vt-budget-book.cleargov.com/3629/funding-sources/sewer-fund-revenue). 

Step-by-Step Proposed Increases

Metered water rates in Montpelier are charged on a “stepped” basis: the first 50,000 gallons per quarter (step one) are charged at one rate per thousand gallons; the next 50,000–250,000 gallons per quarter (step two) are charged at a higher rate; water use over 250,000 gallons per quarter (step three) is charged at still a higher rate per 1,000 gallons. 

Proposed FY23 rates are up across the board but have not yet been approved by the city council. The proposed increases are step one, $9.78 (versus $9.04 currently) per 1,000 gallons; step two, $10.52 (compared with the current rate of $9.72) per 1,000 gallons; and step three, $16.26 (compared with the current rate of $15.02) per 1,000 gallons. The proposed “water fixed annual cost” is $255 (compared with the current $236); the proposed sewer rate is $11.06 ($10.22) per thousand gallons, with a sewer fixed annual cost of $255 (versus current $236). 

Water/Sewer Rate Increases Over Time

Since 2017, Montpelier’s water and sewer rates have risen in incremental annual rate increases, as laid out in a city document titled “Water Sewer Rates History.” Rates for various categories have risen anywhere from almost 13% to over 25% over this time period; if the proposed rates are approved, some rates would increase by almost 36% over 2017 rates.

In FY21 and FY22, rates rose by 1.5% to 2.7%; notable rate hikes in recent years include FY2017 and FY2018, when both the water fixed cost annual and the sewer fixed cost annual rose 10% (2017) and 9% (2018). Water fixed cost annual also rose by 8% in FY2016.

Residents Concerns

Residents have been voicing concerns in a flurry of posts about their water bills recently on Front Porch Forum. One Montpelier resident, Laura Smith, noted in an email that her meter could not be read, and city workers replaced it in 2019 — but then the replacement was also thought to be defective. The latest development is Smith’s discovery that the meter’s wires may never have been connected when the meter was replaced in 2019, and the city is due to send a worker to check on this possibility. Smith expressed doubt that the meter has ever been read (she herself has read the meter and submitted the information to the city) since late 2018. 

When asked via email about residents’ incentive to save water, given that bills are frequently estimated anyway, Montpelier Mayor Anne Watson replied that “Thankfully, when bills need to be estimated because a meter can’t be read, they are reconciled once they can be read. So if folks make water-saving improvements, those savings will show up for them once their meter is read.” 

Watson also noted that fixed parts of the bill (i.e., those charges that remain the same regardless of the volume of water used) go to costs like debt. 

When asked about residents whose economic situations make it difficult to front money in this way, Watson brought in Montpelier City Manager Bill Fraser, who noted that “We often work out payment plans with people who have challenges paying their bills,” and that estimates are based on an account’s historic use in order to come as close as possible to actual use, “so that no undue financial hardship is imposed.” A request to Fraser for further data regarding how often reading-based versus estimated bills differ, and how much estimated and actual bills differ, had not received a response as of press time. 

“I do think that more accurate readings should be required and broken meters and readers should be fixed,” Smith said. “I also feel that the rounding issue doesn’t result in people really being able to understand their usage and what they are actually paying for. And people can’t understand why when they cut their usage way back their bill doesn’t go down!”