PORTSMOUTH — Portsmouth Water and Fire District customers can expect a significant jump in water rates this year.
The district’s Administrative Board has voted to increase its rates by an average of 29.8 percent for fiscal year 2015, which began May 1.
In a press release sent out Tuesday, Administrative Board Chairman Philip T. Driscoll said the rate increases are attributable in large part to a 19.41 percent hike in the wholesale cost of water purchased from the City of Newport.
That increase 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.
Although the average water rate increase is 29.8 percent, the actual increase that customers experience in their total annual water cost will range from 20 percent to 40 percent depending on their meter size and quarterly water consumption.
Here’s a breakdown on what residential customers can expect to pay based on their water usage:
• 5,000 gallons of water per quarter: total annual cost of $157, compared to $131 last year (about a 20 percent increase)
• 10,000 gallons: $326, up from $242 (about a 35 percent increase)
• 15,000 gallons: $496, up from $354 (about a 40 percent increase)
• 20,000 gallons: $665, up from $486 (about a 37 percent increase)
• 25,000 gallons: $834, up from $619 (about a 35 percent increase)
• 50,000 gallons: $1,682, up from $1,357 (about a 24 percent increase).
New billing practices
In addition, Mr. Driscoll said, the board has restructured its billing practices. All water customers will be switched to quarterly billing beginning this month, 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.
The board has also revised its water rate structure, voting to eliminate the minimum charge that was billed in advance of service, which included 20,000 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 1,000 and 5,000 gallons per quarter will be $5.74 per 1,000 gallons. The second-tier rate will be $8.47 per 1,000 gallons for all consumption over 5,000 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-inch residential water meter, the quarterly base charge will be $10.57.
William J. McGlinn, the District’s general manager and chief engineer, said 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 R.I .Public Utilities Commission (PUC), Mr. McGlinn said the cost of service analysis is consistent with the procedures used by the PUC to establish water rates for regulated utilities.
Bills arrive this month
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 19.
Because of the change in billing practices, these annual bills do not include the historical minimum charge for 20,000 gallons of water in advance. Since customers paid for the first 20,000 gallons for fiscal year 2014 in their 2013 water bill, this year’s annual bill includes only an overage charge for water used over 20,000 gallons.
Mr. McGlinn said 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 byproduct 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, a 13.47 percent increase over last year’s budget. The board approved a total budget of $4,063,224, which includes capital expenses, for a 13.58 percent increase over last year’s total budget.
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 percent of the District’s total revenue.
Mr. Driscoll said the board is working hard to properly maintain and improve the water system, while providing fair and reasonable rates for customers and taxpayers. Mr. 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.