ORDER-2018-178 : Proposed FY19 Water Rates

Transcript (~14 min @ 37:05)

Speakers identified by voice; unnamed voices are numbered within this recording. Auto-caption text — verify against the video.

▶ 37:00 Jennifer L. Lemmerman: FY 19 sewer rates this is the start of the public portion of the public hearing a member in the chamber who wishes to speak on these orders may come forward introduce yourself state your address and please sign in all in favor of

▶ 37:13 Jennifer L. Lemmerman: commencing the yeah thank you all in favor of commencing the public portion of the public hearing aye aye any opposed good evening mr rose hi i'm jerry morose um first um one element about

▶ 37:32 Speaker 7: water and sewer rates is that the way the rate structure has been set does not it's not commensurate or proportionate with the way that the costs are are incurred by the city it's far better to have the fixed costs of the city's water and sewer system paid more with costs that we apply to the rate payers as fixed costs themselves when we don't do that and we rely on volumetric rates to pay our fixed costs if the usage goes way down we don't have enough money to keep it sustainable and and a stable water system and have it stably funded so in my view even though there's a small increase on the sewer base fee this year in my view we should be even with revenue neutral having a much higher base fee on both the water and the sewer and reduce the volumetric charges accordingly again it's revenue neutral but the idea is is that when we run into trouble at some point with a wet summer and suddenly somebody's saying oh we have to use money from our reserves or we have to do this or that the idea is that that won't be a

▶ 38:52 Speaker 7: problem if we more honorably assess the charges that way that's one issue the other issue is is that the water and sewer rates as they're proposed are based on the expenses that you have included in other someone has included within the water and sewer enterprise funds and I just did some quick calculations here hopefully I can find again basically a 15 million dollars of the budgets for water and sewer about two million dollars of those fifteen

▶ 39:28 Speaker 7: million dollars significant percentage are city related costs there's a

▶ 39:35 Speaker 7: departmental into indirect cost analysis in your packet that's basically saying

▶ 39:48 Speaker 7: that between the water and sewer is about 1.63 million dollars of employees outside the water and sewer department who are being used for the or that their salaries are being paid out of the water and sewer enterprise funds and I find it

▶ 40:10 Speaker 7: really interesting that the the thing that was provided to you it has a blank column you know indirect allocation total budget is blank and then it says the percent of the budget but the percent of the budget that they're putting there is not even a relevant figure here the question is is what's the FTE of the various employees if there's four employees in the audience in the auditor's office what's the f total ft full-time equivalent man employees being used toward being claimed as being used toward water and sewer i find it hard to believe that 150 000 in the auditor's office is being applied strictly to water and sewer with all the other things we have going on in the auditor's office i find it difficult to believe that 17 000 of the mayor's office is being applied to water and sewer i find it hard to believe that actually i didn't double that one i'm sorry that would be about thirty four thousand dollars of the mayor's office is going to water and sewer and again here it's showing that about a hundred thousand dollars of the treasurer's office about another ninety nine ninety eight thousand dollars to the collector's office fifty thousand to the personnel office fifty thousand to the legal office seriously again 60 000 information technology these numbers aren't defensible

▶ 41:40 Speaker 7: they were money grab again by the city to take things that the city should be using its tax base for and trying to pay for it out of the out of the water and sewer rates and to that extent i believe that the water and sewer rates as presented to you are are unsupported, unfair, and at some level, against the state law, which is Proposition 2 1⁄2.

▶ 42:07 Speaker 7: If you're going to approve the water rates and sewer rates and the budgets that are put in front of you, the burden is on you to extract from the city employees the justification, the support, the backup

▶ 42:29 Speaker 7: this kind of a money grab the other money grab that's happening here as well and it's a similar

▶ 42:35 Speaker 7: prop two and a half end run around is the idea that the city uses and we don't have the exact numbers because it's not provided but the sweet city uses somewhere between 300 and 400 000 of water and sewer of the enterprise fund that it doesn't pay its bill for so if the city now is taking another 300 you know right here they took between the two 1.63 million of city costs and they're putting it on the ratepayers and then the city goes and does nothing to conserve water here the middle schools the elementary schools the high school fire station the police station Memorial Hall the city does nothing to conserve water there because they don't have any incentive to nobody's holding their feet to the fire about that's going to cost something out the budget of those departments if they waste water across the board the parks are watered I don't even think we have rain sensors in the parks which a standard installation in any in any irrigation system these days that you don't be watering the grass while it's raining out but yet we do that and actually it degrades our fields to the fields actually get way too soggy and get damaged more when kids are out there playing but when you add the two together it's two million dollars fifteen million dollars that really is money that the city is stealing from the people the individuals who pay the rates of the

▶ 44:15 Speaker 7: water and sewer Melrose in your packet is a is a curious letter from Powers and Sullivan that you know they you know this the city never seeks to amaze me at the levels to which it it uses the logical fallacy of honor by association um in this city you know supposedly powers and sullivan was asked by um mr delarusso whether or not an individual department should have a line item within their respective appropriation reflecting the estimated cost for water sewer services or should such costs simply be recovered in the respective enterprise funds. Mr. De La Russa got the answer he wanted. Oh, yes, they say. There's nothing to prohibit charging departments, but standard practice they accept is to do this. Whether it's standard practice or not, it's indefensible. It's, again, the city stealing money from the people who pay the water and sewer bills in Melrose. A lot of people misunderstand when I'm talking about these things, and they think that, well, it's the ratepayers, the taxpayers, one or the other but it's not the ratepayers aren't an exact match for the taxpayers here and someone who uses more water and more water and sewer because they might have a larger family or a variety of different reasons should not then be paying more than their proportionate share of what should be billed through the city tax base in the way that our Constitution and state law works that the people of a city ought to be paying the city's bills through the appropriate revenue stream not again this end run around the appropriate revenue stream to grab money in an illegal way to most of you this is nothing new I've said it year after year after year here but I want to hold you I need to hold you accountable because year after year after year here you have all approved

▶ 46:17 Speaker 7: the budget you've all approved rates based on that budget you may have asked a few questions here or there but basically the city is still stealing the money from the water and sewer enterprise accounts there was a lot of

▶ 46:31 Speaker 7: talk here a couple years about all we need to conserve we need to conserve we need to conserve it was never about conserving you know we have some of the highest water and sewer rates in the country I just a few weeks ago I looked it up again and yes Melrose in the country is still you know higher than San Francisco higher than Los Angeles I think Seattle might beat us and actually Belmont and Redding might beat us at this point but we're way higher even in the average of MWRA district we have an inflow and infiltration program as it's

▶ 47:12 Speaker 7: being called but I would take exception with the use of the word that was used

▶ 47:22 Speaker 7: earlier tonight that it's aggressive if we are only using the money the MWRA provides proportionately to each district there is nothing aggressive about that it is basically the status quo and if we only reduce our inflow and infiltration costs well number one I haven't looked at this directly this year but just a few years ago we were the leakiest sewer pipes by far in the entire Middlesex League is a graph that I gave you one time but the issue here is is that if we want to do right by Melrose citizens who elect all of you

▶ 47:56 Speaker 7: the best thing you can do for them is to take the money that they've already paid and invest it in reducing the waste so that 50% of our water or greater I'm I'm sorry, 50% or greater of the sewerage we provide to the MWRA is not even water that went through anybody's house or even the city buildings. You can invest that money. On your agenda tonight also is the issue of supposedly funding to this kind of laughable, arbitrary amount of 10% of a reserve account for the water account and the sewer account.

▶ 48:31 Jennifer L. Lemmerman: Mr. Morales, I need to ask you to summarize the remainder of your comments you've found over the 10 minutes.

▶ 48:35 Speaker 7: Okay. Is there a 10-minute limit on public airing on water and sewer rates? That wasn't clear to me, but thank you. I will summarize.

▶ 48:46 Speaker 7: The issue here is that there is significant money sitting in reserve accounts that is not necessary by any measure to sit there not doing the work for the rate payers that that money could be doing. You will have somebody tell you, oh, we need that money in case there's a big shortfall in revenues one year, And, of course, the city mismanaged a few years back with the rate structure we had, and we had a shortfall in revenue. But our reserve accounts do not need to pay for aquifer protection. They don't need to pay for large-scale distribution and pumping systems. They don't need to pay for the suicide. They don't need to pay for digesters. They don't need to pay for a thousand other things that the MWRA pays for in our payments to the MWRA. We do not need to be holding, doing nothing. and I can't recall the exact amount of money, but I think it's probably $700,000, $800,000 at least, maybe all of it forwards at the moment, sure, but that money is not doing anything to benefit the rate payers who put that money there and that's been socked away doing nothing, and every year that goes by that you don't do the work, you get less work done for the money, the interest rates on bonds that you put out there, you don't even those interest rates for the reserves but those reserves are not working for people so in conclusion i challenge the proposed rate structure in that it doesn't apply fixed costs more toward everybody who receives benefit of the fixed cost of the mellows water and sewer system the volumetric rates i can't go without mention that there's a second tier which is completely another fabrication of of of a money grab there is no if we're already at about the highest rate for the the country we don't need to have a second tier to convince more people to conserve water so please don't just rubber stamp this bill this order these indirect costs these rates the rate structure even if they've come through what we thought was going to be a few years ago a water and sewer committee that could actually do something the water and sewer committee doesn't do anything real in assessing these issues so if they haven't done that you can't rely on the work or the lack of work from them to say to hang your hat on in terms of saying that oh you're going to believe this and trust this in order to approve these rates i urge you let's have a real discussion one year any year about what water and sewer is what the cost of the service to the city are and how those costs are best applied to the rate pay is fairly thank you thank you mr. Ross are there additional members wishing to