Suffolk Water Authority eyes 4.2% hike

After four years without a rate hike, the Suffolk Water Authority proposed a 4.2 percent increase starting in June, costing the average residential customer about $12 a year.

James Gaughran, the authority chairman, said the five-member board was able to avoid a rate hike this year by making budget cuts and because of last year's unusually hot and dry summer that drove up water use. "Last year was an aberration," he said. "We have to budget for a normal weather pattern, not the bonanza revenue we got last year."

Gaughran said the new revenue is needed because the authority is facing higher pension, health benefit and payroll costs, despite cuts. The authority's biggest uncontrollable expense, Gaughran added, is the authority's electric bill, which makes up 23 percent of the budget. "Basically it's all going to LIPA," Gaughran said. "If we did not have to deal with the huge impact on us, we could continue our freeze."

The proposed rate hike will generate $4.5 million in new revenue and raise the average annual residential water bill by $12.40 over the current $306.52 and is based on use of 160,000 gallon a year. The authority has 385,000 customers and serves 1.2 million, or 85 percent of Suffolk's population.

Presiding Officer William Lindsay (D-Holbrook) said he hopes that the board would put off a final vote on the rate hike until the authority can review their proposal with lawmakers. He added smaller increases of 2 percent over several years might be more acceptable.

Jeff Szabo, chief executive of the authority, said consultants Black Veatch said last year there would be a need for a 10 percent rate hike over the next five years. He said the board took steps to curb expenses and decided to set rates on a year-by-year basis. He said the authority board cut payroll from 605 to 565 and reduced the authority's $2.2 million in overtime costs by $400,000. The $72-million capital budget is being cut $15 million and will be kept at the same level for the next four years. Szabo added the authority is also looking to pay off existing bonds to lower costs long-term.

The board has scheduled a public hearing Monday on the proposed increase at the agency's headquarters in Oakdale at 5:30 p.m.