The Methuen City Council will tonight look at water rates in Methuen. The City Council formed a sub-committee to look at our water system, and the budgetary situation it faces. In essence the water enterprise fund has been operating at a deficit for a number of years, with the deficit being subsidized by cash reserves. Last fiscal cycle the operating deficit was about $700,000. The Council sub-committee has recommended a rate increase that is different from prior proposals. The new rate proposal will look like this. 0-1000 cf $20.00 minimum. 1001-3000 cf $2.50 per 100cf, 3001-5000 cf $3.50 per 100cf and over 5000cf $4.00 per 100cf. Elderly ratepayers would receive a $10.00 rebate against the new $20.00 minimum. The 10% early pay discount will still apply, and the earlier contemplated irrigation rate will not be a part of this package. This proposal will place Methuen as the second lowest in terms of water rate in the Merrimack Valley. I have placed a graph of our relative standing vis a vis the other Merrimack Valley communities at the link placed here. Water Usage
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Bill Manzi.com 
Your Honor,
It does this conservative heart well to watch the good liberals of Methuen rise up in rage over a fee (tax) increase.
These are the same citizens who, year after year, send Democratic lawmakers to the Massachusetts and federal legislation.
I assume voters do this because they expect the lawmakers to provide additional benefits for themselves. To para-phrase John Kennedy ” Ask not what you can do for your country, ask what your country can do for you.”
As I read the Tribune article I saw phrases that raise a yellow flag for me. “the reserves are almost gone”, “…the city is using indirect costs to to avoid a property tax increase”.
Apparently the city has been using the reserve to balance the budget for years and is running out of cash.
I smell a tax increase or a prop 2 1/2 override.
Now it appears as if you have a citizen uprising on your hands. (can’t blame conservative radio here). Their general, Emma Donnelly will be leading the revolution.
What happens now, your honor?
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George McClellan of the Army of the Potomac comes to mind. It is important to sort out fact from fantasy in this discussion. I will do a post on it but for now let us begin with this. I am not sure if you are aware that our Water and Sewer system is an enterprise fund. What this means is that all costs associated with the water enterprise fund and the sewer enterprise fund are borne by the ratepayers and not the taxpayers. In the years gone by our enterprise funds have accumulated cash surpluses, and the City has used those surpluses to subsidize the ongoing operations of the enterprise systems. What I specifically mean by that is that on an annualized basis our water and sewer rates were insufficient to cover the ongoing operations of the system. I will post data that will reflect when the shift from surplus to deficit occurred, but for now let me say that when that shift occurred the City choose to not raise the rates on the ratepayers of the City, but rather to fund continuing operations by dipping into accumulated reserves. It was a value judgement that I am not going to argue about today. The bottom line for Methuen is that our water fund now needs to raise 5.1 million to operate in balance. The current rates will raise about 3.1 million, leaving an ongoing operational deficit of 2 million. This proposal in no way reflects on our tax situation, and does not place us into a position of needing an override to operate. I will talk of General Donnelly’s prescription in a future post, which is to shift a big chunk of the enterprise fund costs over to the taxpayers of the community, which is a formula for fiscal disaster for our city. At least part of the argument is that the tiered pricing system chosen by the City Council sub-committee and approved by me, provides for higher pricing for those that use more water. This proposal was designed to not only promote conservation, but to price protect elderly residents, and the vast majority of the enterprise fund ratepayers. Some have called for an increase that balances the fund, but with a flat rate that treats all users the same. We have looked at that and felt that the tiered proposal was better, but we will be prepared with numbers that will show how a flat rate will impact all of our ratepayers, including the elderly. The rates have not been raised since 1991. I am not sure what product can say that there has been no price increase in fifteen years. Finally lets look at where the proposal places us in terms of other Merrimack Valley communities. My posting included a spreadsheet that shows our standing as being only above East Chelmsford in terms of water rates, and being significantly below all other communities. We are delivering a good value, and will continue to do so.
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Mayor Manzi:
I am surprised Emma Donnelly has decided to rail against the water rates in Methuen as she is currently living in Newburyport which has one of the highest rates in the Merrimack Valley. I am not sure she and Dottie Kalil understand what “Enterprise Fund” means. Here’s hoping that at the work shop scheduled for next Monday a full explanation will finally be understood by the opponents of the increase.
Methuen water rates are highly competitive and will continue to be so even with the increase. I for one am delighted that the tier system will afford me the opportunity to save as I conserve.
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Your Honor,
The Trib has failed to cover the nature of the reserves. (I thought Methuen was using up revenue reserves) I buy into your explanation.
Otherwise I was just sort of standing along the side lines watching the hissy fit.
I presume when the bill shows up, it will be higher.
However, the good news is that the Governor’s real Estate tax cut plans will compensate for the water bill increase. Right? ( I can dream can’t I)
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