The Glen Cove City Council will vote on whether to raise the city’s water utility rates by 35 percent, following a public hearing at City Hall on the evening of June 26. If the rate is approved, the average residential water customer will pay about $6 more per month, according to Sandra Clarson, the city’s controller, and the city will take in about $748,000 in extra revenue.
The extra revenue from the rate hikes would be put toward debt service payments on nearly $4 million in borrowing for water infrastructure improvements that the city approved in April. The city will have to pay back $235,000 in 2019, according to Clarson, who noted that payments on that particular bond would decrease annually.
The city is planning to borrow an additional $2.5 million next year, according to Amy Franklin, the principal account clerk in Clarson’s office. If it does, it will need to cover additional debt service, though Franklin said that it was difficult to project how much those payments would be ahead of time.
At a working session of the council on June 19, the council members discussed possible alternatives. Councilwoman Marsha Silverman distributed projections she had compiled for a tiered rate system. Her proposal included no rate hike for residents who used the least water, and higher rates for those who used more, which she said would be an incentive to conserve.
Under the current system, which breaks up residential water rates into three tiers, Silverman said, 86 percent of residents fall under the lowest tier, from zero to 45,000 gallons per quarter. “So it’s not really tiered today,” she said, “if almost everybody is getting the same rate.”
Silverman estimated that her tiered system would be equivalent to about a 28 percent across-the-board rate hike.
“I’m with you about conservation,” said Councilwoman Pam Panzenbeck, who had previously joined Silverman in asking Clarson for projections for a tiered system. “But this,” she continued, “is about fundraising.”
Panzenbeck also said that she could not, “in good conscience,” vote for a 35 percent hike. Councilman Michael Zangari, who asked Clarson to clarify whether the city could address the debt service payments at a lower rate increase, joined her.
A 15 percent increase would cover payments on this year’s debt, Clarson said, but not next year’s.
After some debate, Tenke said that it might be best to save the vote for a later date. Silverman asked, and Clarson confirmed, that if the council postponed it’s decision, the timeline for implementing the higher rates would be delayed by a full quarter, resulting in insufficient revenue to cover the debt service payment, which becomes due in January.
The city’s water rates have not been raised since 2004, Mayor Tim Tenke said, adding that that rates would be 41 percent higher if rates had been increased two percent since then.
The rate hikes, Tenke argued, were “an investment” in the city’s water infrastructure. He noted that in the past, revenue from the city’s water utility had sometimes been used to pay for things unrelated to water, and blamed the stagnant rates for the problems that have, until recently, beleaguered the city’s wells.
In late March, only two of the city’s six wells were operational, three due to contamination that required special filters and a fourth that was undergoing repairs after being struck by lightning last summer.