With a deadline looming for the Keene City Council to approve a water-rate structure, the council’s finance committee has recommended moving forward with a flat rate after committee members raised concerns about the two-tier system proposed by city staff.
In April, the council’s Finance, Organization and Personnel Committee heard a presentation by Public Works Director Kürt Blomquist pitching a new billing structure that would charge a “lifeline” rate for water use under a certain threshold. Any water use above that threshold — which staff suggested to be 4,500 gallons or 600 cubic feet per quarter — would be charged at a higher rate.
As part of the presentation, Dave Fox, senior manager with Raftelis, a consulting firm, said for the average customer, who uses about 9,000 gallons of water quarterly, the rate structure change would equate to a water bill increase of about $11.50.
The two-tier structure was proposed as a way to raise the city’s water revenue while giving residents an opportunity to save money by conserving water. To balance the budget, the city must raise its water revenue by about 20 percent, noted City Manager Elizabeth Dragon.
The two-tier system would apply to structures with water meter sizes of five-eights or three-quarters of an inch. These are sizes generally used by single-family homes, which make up about 90 percent of the city’s water customers, according to Dragon.
While the finance committee initially recommended the rate structure change, Mayor George Hansel sent it back to that panel for further review. Councilors had raised a number of questions about how the change would affect people, including whether the proposed lifeline threshold was the right level and how the arrangement would affect large residential buildings with units sharing a single water meter.
Questions about multi-family dwellings were at the heart of Thursday’s discussion. After another presentation from Blomquist, some committee members were still unsure if the two-tier rate would be fair.
“A fixed rate for everyone seems to be the most fair,” said Councilor Raleigh Ormerod, who was the only committee member to vote against recommending the two-tier system when it first went before the committee.
Other committee members echoed the sentiment. Councilor Mike Remy said he didn’t feel he had enough information to support the tiered system. “I want to make sure we’re doing the right thing for the most people,” he said.
According to city Finance Director Merri Howe, the rate change would take the form of an ordinance, which would be drafted and sent to the full council before coming back to the FOP Committee for more discussion and a vote.
Committee members voted to direct Dragon to move ahead with the flat-rate structure to enable the city to meet its budget deadline while also allowing for additional conversation when the plan returns to the committee. Dragon said a rate structure needs to be set to implement the city’s budget for fiscal year 2021-22, which starts July 1.