With the city needing to increase water and sewer revenues, Keene’s public works director says customers can expect bill hikes this coming fiscal year of approximately 10 to 18 percent.

The city’s water revenues must rise by 20 percent, and its sewer revenues must go up by 6 percent, according to Public Works Director Kürt Blomquist. The most significant change reflected in people’s bills won’t be to the rates themselves, he said, but to the fixed costs that are attached to each meter size.

The volumetric rate for water — the cost tied to the amount a customer uses — will remain at its current level of $4.78 per 100 cubic feet (or nearly 750 gallons), Blomquist said, while the sewer rate is set to increase from $5.31 to $7.19. But the fixed rates that are charged based on meter size are going up for water services, while going down for sewer service.

Customers’ meter size will be part of what determines whether the increase to their bill is closer to 10 or 18 percent, Blomquist explained, adding that the outcome “is really going to depend on who the customer is” and what their water needs are. But for an average residential customer, he said the change won’t amount to much more than a few dollars per month.

According to a chart Blomquist presented to the City Council’s Finance, Organization and Personnel Committee last week, the average residential consumer who uses about 1,200 cubic feet of water quarterly would be paying $200.61 per quarter for their combined water/sewer bills.

The city’s water and sewer funds — which pay for water and sewer services for properties in Keene — are largely funded by the revenues they raise by charging customers for service. In the current fiscal year, the water budget was $4.1 million, while the sewer budget was about $5.7 million.

Blomquist explained that, in order to meet its financial needs, the water department must increase its revenues by about $262,000. He said this is due to the increasing costs of materials and the fact that water and sewer rates haven’t changed since before the COVID-19 pandemic.

“The cost of operating the water system has increase[d] due to increasing prices for chemicals, and other supplies, capital projects, etc.,” Blomquist said in an email. “The financing of the water fund (and sewer) has been based on annual adjustment. Both the water rates and sewer rates have not changed since FY2019. Rates were held in FY20 and FY21 due to COVID. So we are going on three years without an adjustment.”

The City Council is set to vote on a water rate structure during its in-person meeting Thursday, along with Keene’s proposed 2021-22 budget, though what that structure will look like has been up for debate. Last week, the FOP Committee recommended against a proposed two-tier rate system for residential properties in favor of sticking with a flat rate that charges the same rate for all water use.

“What it means for consumers, in the most practical sense, is that everyone, regardless of the type of activity, will pay the same cost per unit of water,” Blomquist said.

Earlier this spring, the public works department put forth a proposal for a new water billing structure that would have charged water at a lower rate for the first 600 cubic feet a household uses each quarter, and a higher rate for water used after that. All commercial water use would have been billed at the higher rate.

This was seen as a way to give a break to residents who use less water, Blomquist noted, saying that many of the people who use around 600 cubic feet of water each quarter are elderly people or younger families.

But the proposal was rejected by the FOP Committee, which had initially recommended the two-tier system, with some members raising concerns about how people in apartment buildings that share a single water meter would benefit from the change. Blomquist said the reason it would have been difficult to apply the two-tier system to renters in larger buildings is because water bills go to the landlord, not the tenants.

“It gets complicated when we start saying ‘how are we going to apply this to a business,’ “ he said, adding that it would have been up to property owners to pass any savings on to their tenants in the form of a rent reduction, which the city has no say over.

Blomquist also noted that while one aspect of the two-tier system was to encourage conservation, that incentive would still be present under a flat-rate system.

“We wanted to provide a level of incentive that says if I don’t have leaks in my house ... if I don’t water the lawn for three hours and water it for 20 minutes instead, my bill is going to reflect that because I’m using water smartly,” he said.

Mia Summerson can be reached at 352-1234, extension 1435, or msummerson@keenesentinel.com. Follow her on Twitter @MiaSummerson