EAST PROVIDENCE — Sewer rates in East Providence will soon rise significantly, though necessarily, after the City Council backed one of two proposals presented to it by a specialist on the …
EAST PROVIDENCE — Sewer rates in East Providence will soon rise significantly, though necessarily, after the City Council backed one of two proposals presented to it by a specialist on the matter at its March 21 meeting.
The Council approved “Option 2,” which will see the annual fixed fee raise from $60 to $120 and the volumetric rate for a vast majority of residents/customers with a 5/8-inch pipe will move from $10.74 to $12.40 per 100 cubic feet of water used monthly.
Those initial changes take effect on May 1 and will remain in place until the end of the current Fiscal Year 2023 on October 31.
Those rates will rise again — $124 and $12.77 (or 3%), respectively — beginning at the start of FY24 on November 1, then another 3% each year through Fiscal Year 2027.
Increases must be done through the ordinance process. Last week, the Council gave the first of two necessary approvals. The second vote of the body must also include a public hearing. Those two things are on track to take place at the Council’s April 5 forum.
David Fox, a vice president for Raftelis Financial Consultants Inc., returned before the current incarnation of the body to once again explain the need for rate increases to support the revolving water/sewer fund. Revolving means the fund is supposed to be self-sustaining.
In the presentation of the latest rate study his company conducted (see slide show above), Fox noted his company has been working with both elected and appointed city officials for nearly a decade, having made presentations to previous Councils in the 2016, 2017, 2018 and 2019.
Fox highlighted the fact that the sewer fund has not had a volumetric rate increase since 2015, and has not had an increase to the minimum charge in over a decade.
Because of that, the city, according to Fox and later in the meeting city side Finance Director Malcolm Moore, has over the last several years needed to use monies from the general fund to subsidize the sewer portion of the department to the tune of about $4 million.
Fox said if nothing is changed, the sewer fund will require an additional $13.3 million subsidy over the next five years.
Fox presented the Council with a pair of proposals: Options 1 and 2 (see attachments).
The first option would initially dramatically increase both the fixed or minimum fee and the volumetric rate by 23.5 percent, but the fixed or minimum charge would only go up by $5.
He said the second option would likely be more palatable to most and more equitable between lower and higher volume users.
Fox made a pointed remark about the number customers in the city who pay only about approximately $60 per month to use the system, or the lowest amount possible under the current rate structure. His research showed 23 percent of customers in East Providence pay that figure.
Even if doubled, still less than half of the next highest in the state, West Warwick, $120 here compared to $299 there.
By comparison, sewer rates across country have increased by six percent annually over the same period of time East Providence has had none.
Another key factor according to Fox, without a rate increase the sewer fund will not be eligible for Rhode Island Infrastructure Bank (RIIB) loans, which, he said, “are utilized to pay for necessary projects and significantly mitigate rate increases on customers.”
Before the body voted, Council president and At-Large member Bob Rodericks asked Fox if there wasn’t a “third option,” which would for the current Council to “kick the can down the road” like others have so often done in the past.
Rodericks said one of the main reasons why he endeavored into electoral politics was to address infrastructure issues long neglected around the city.
Asked by Ward 1 Councilor Frank Rego to explain what would have occurred in any of the current council’s predecessors had acted earlier, Fox said as of the moment a modest 3-to-5% increase would likely have been required.