Suffolk Water Authority officials have ordered a hiring freeze and told departments to draw up plans to cut expenses by 10 percent.
But they have put off a decision on a rate hike because they could not decide whether to impose a two-tier rate system to charge higher rates, primarily to customers who water their lawns excessively.
Because of the impasse, the board on Monday night called for a special meeting March 9 to resolve the rate issue, so the hike can go into effect for the new fiscal year starting April 1.
Authority chairman James Gaughran and board member Patrick Halpin, a former Suffolk County executive and the primary advocate for the two-tier system, agreed informally Tuesday on a compromise. The agreement would delay two-tier rates until next year because of the difficulty in putting the new system in place in a matter of three weeks.
Instead, the authority, which originally called for a 6.1 percent rate hike, will propose a 4 percent or 5 percent increase. The exact amount will be determined by the five-member board.
A 4 percent increase would boost the $380 annual bill for the average customer using 160,000 gallons of water a year by $15.18; a 5 percent rate hike would cost the average customer $18.98 more a year.
Gaughran favors a 4 percent increase, which would raise $5.8 million in new revenue, but leave a budget shortfall of $3.8 million.
However, Gaughran estimated a hiring freeze will save $1.2 million. A settlement with T-Mobile to reduce the number of antennas it leases on water towers from 71 to 44 after its merger with Metro PSC will generate a $2.25 million one-shot payment to the authority, he said.
Gaughran also said the 10 percent cost-cutting plan and the potential sale of up to three surplus authority properties will save more than what’s needed to balance the budget.
Halpin said he favors a 5 percent increase, which will generate $7.2 million, which would avoid reliance on the T-Mobile one-shot.
In seeking the two-tier system, Halpin had originally proposed a 3.4 percent rate hike for most customers and a 9.9 percent increase for the amount of water used over 40,000 gallons per quarter.
Halpin said such a system would align rates in a way so that customers who put the most stress on the system in high-usage summer months pay their fair share.
Gaughran said he favors a two-tier system. But he said that to avoid discrimination, it must exempt apartment, condominium and other multifamily dwellings. He said it would be unfair to force those complexes to pay the higher rate when individual tenants are not excessive water users.