The Suffolk Water Authority Thursday night approved a 4 percent annual rate hike starting April 1, boosting the average customer’s current $380 annual bill by $15.18 in the coming year.
The five-member authority board voted 4-1 for the increase, with former Suffolk County Executive Patrick Halpin opposing the measure, saying the increase should be 5 percent, which is still less than the 6.1 percent authority staff recommended.
The rate increase comes as the authority has proposed a tentative $127.6 million expense budget to take effect June 1.
Championed by authority Chairman James Gaughran, the 4 percent hike would raise $5.8 million in revenue but leave the authority with a $3.8 million shortfall. He said much of the shortfall would be made up by the board’s decision last month to impose an immediate hiring freeze to save $1.2 million, along with an order for departmental plans to cut spending by 10 percent. Those departmental plans are expected to be ready by April.
“We have a responsibility as a board to keep rates as low as possible,” Gaughran said, explaining his support for a lower rate hike than recommended.
He said the authority can also use a $2.25 million one-shot payment — part of a settlement with T-Mobile to reduce the number of water tower antennas it leases from 71 to 44 after its merger with Metro PCS. In addition, officials have said, the authority also has two or three surplus properties for sale that could bring in as much as $1.6 million.
Halpin said a 5 percent hike would have kept rates low but also provide the authority with $7.2 million in secure, recurring revenues and only a $2.4 million shortfall.
“The difference between four percent and five percent is a penny a day, but it generates $1.4 million more for the authority,” said Halpin. “An organization goes down a slippery slope relying on one-shots. Our overarching responsibility is to keep recurring revenues in line with recurring expenses.”
Gaughran temporarily dropped part of his proposal to set up a multitiered rate system by 2018 for an additional charge to those who exceed the 160,000 gallons of water used by the average residential customer. Gaughran said he plans to reintroduce the proposal once staff estimates the cost of setting of the more complex rate system.
However, Gaughran said he wants an exemption in the multitiered proposal to avoid imposing higher rates on apartment and condominium complexes where water use may be high, but smaller on a per-unit basis than the average annual 160,000 gallons for residential homes.
Halpin countered that the difference in rates for multifamily dwellings is not worth the extra cost of a creating the exemption.
Discussions about the multitiered rate system centered on doubling the rates for customers for using more than 50,000 gallons of water each quarter.
Authority officials believe the need for conservation is most urgent on the North and South Forks during the summer. The water system on the forks is more fragile because of the geography, which limits well connections, compared to the rest of the county.