← City Council · 2016-05-16 · City Council Regular Meeting
Public Participation
Agenda original PDF
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Transcript
▶ 0:39 Peter D. Mortimer: I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.
▶ 0:56 Speaker 1: Mr. President, I make a motion to open the floor for public participation. Second. Alderman Mortimer moves that we commence public participation. The motion is seconded by Alderman Boycelle. On the motion, all those in favor? Aye. Anyone opposed? Motion passes. This is the portion of our meeting where any member of the public who wishes to speak on any order that is on our agenda may conduct themselves to the table in the center of the room, identify themselves, and we will listen to whatever you have to say that's relative to the orders.
▶ 1:25 Speaker 3: I am still Phil Taymor from 44 Lark Point Road.
▶ 1:34 Speaker 3: I'll sign at the end of this from the past several meetings it appears that the board of all them is inclined to let the city's problematic water and sewer rate decisions stand nonetheless I'll continue our conversation first I'll respond to points made at the last meeting by the city and the board about the city's change in billing practice to charge rate pay attack ratepayers for its own internal water and sewer consumption the state the city still hasn't justified its change. The city originally disclosed the change in the Melrose Free Press earlier this year and said it was based on advice from the Massachusetts Department of Revenue that such costs should be addressed within the water and sewer enterprise funds. Now the city says it simply implemented good and appropriate practice as per its auditors. I've talked at length to the Department of Revenue who said the change was not mandatory, encouraged or discouraged. The prior and new practices were equally acceptable. The city's consultant Mr. Woodcock in fact said at the last meeting that as many cities charge internal consumption to their property tax budget as don't. Alderman Forbes asked the city to clarify for today's meeting Department of Revenue frequently asked question number 17 which he thought might prohibit water and sewer enterprises from charging the city's property tax budget. I've also talked to the Department of Revenue about this item the department said this FAQ 17 absolutely in no way relates to or precludes enterprise funds from from excuse me from charging the city budget for usage as they would any customer FAQ 17 was written only to stop bothersome past practice by which some city departments and funds have been invoicing each other every time an employee work with another department of fund nothing more so what compelled the city to make the unnecessary billing practice change and shift two hundred seventy thousand dollars of incremental annual cost of ratepayers and why didn't the city regardless offset the cost to residents as it could and should have and why doesn't the city correct the situation now second I'm surprised that the board is not probed at all the average annual 14% increase for the past two years in city-controlled water and sewer spending and allocated indirect charges from the property tax budget. The Board seems simply ready to institutionalize these increases by approving the 2017 budgets. As recently as last week, the Melrose Free Press reported that the allocated indirect charge component has been increasing at an average double-digit annual rate for the past four years, and that annual pension costs have increased by $294,000 or 2.7 times over the past five years. All these data beg questioning that's not taking place. Third and finally, let's discuss tiered rates again. I continue to be mystified how 13 MWRA cities are still comfortable using uniform flat rates, but Melrose considers them illegal. Regardless, tiered rates are allowed only to the extent they fairly reflect the impact of increased consumption. I heard many grand judgment driven potential reasons for tiered rate differentials all unrelated to cost of service at the last meeting to inspire conservation even though the MW IRA water and capacity are abundant to assure affordability without defining for whom and at whose expense and to what degree and to reflect other broad policy considerations I heard very little about the actual cost differences to provide service to customers across the three tiers I also heard no specific great impact numbers to use for the top tier conservation and affordability reasons, which numbers must get pretty darn artful and arbitrary. So facts bear repeating. Melrose's current top tier combined water and sewer rate is a significant 33% higher than the MWRA top tier average. Melrose's top tier is an unsupported 36% higher than its own lowest tier, and more meaningfully 93% higher when excluding constant per unit MWRA charges. The city has a tiered rate problem on the face of it. The city cannot today but must going forward support its rate differentials between tiers with proven cost differentials per unit of consumption. The city is selling setting utility rates here not graduated tax rates. Add on a judgmental something for conservation and affordability if it must but stop overreaching contrary to what was implied at the last meeting no other public utility provider would ever be allowed to charge one set of customers at rates anywhere nearly as substantial dramatically tiered and pervasive as the city's in order to merely and excessively subsidize others subsidies for needy residents are certainly appropriate but they should be targeted at the truly needy the vast majority of Melrose residents can afford unsubsidized rates. The city needs to collapse its dramatically tiered rate structure much greater than any option being presented today. The very fact that no one can explain or quantify the elements of today's tiered rate differentials, evidences that they were chosen arbitrarily, in contrast to what some aldermen have opined, the city doesn't have a communication problem. It has a computation problem. Alderman Kahn appropriately highlighted at the last meeting the fact that the lowest tier rates would have to increase in order to collapse the tiered rate structure. This simply is required to correct today's huge insupportable erroneous subsidy. Extrapolating from Raftelis Financial's technical memorandum, flat rate structure would have decreased combined 2016 top tier rates by 20% and increase lowest tier rates by 8% which would represent the maximum impact of a full collapse of two tiered rates if the city also reversed its billing practice change for internal consumption as it should lowest tier rates would have increased by a lesser net 6% not trivial but a moderate impact equivalent to one year's recent typical rate increase the city can and should collapse tiered rates significantly
▶ 8:24 Speaker 4: thank you sir anyone else who wants to speak this evening hi i'm jerry morose um i understand uh birthday wishes are in order for today for somebody on the board of aldermen is that correct
▶ 8:40 Speaker 4: anyway i was set up to say that we're here again uh mr taymor and i um you know there are some aldermen that believe that mr taymor and i are wasting the time of the city and of the mayor of the water and sewer committee because we choose to engage and choose to become informed and to try to contribute to the process and um and you know i i certainly reject that idea that somehow i'm wasting the city's time by trying to bring forth good data valuable data supportable data defensible data to me the waste of time the waste of money is when we pay $30,000 or more to a consultant who gives people what they want politically instead of giving us the facts that we can we can base our decisions upon we're in the situation today with water and sewer enterprise funds because for a number of years we haven't done the right thing we're doing better now than we did 20 or 30 years ago absolutely and I applaud that but it's not sufficient to make things better here the first point I want to address about water and sewer tonight is this idea that we have to charge people some ridiculously high amount of money for the second tier or third tier of water that somehow that will cause them to conserve now we all think about Los Angeles California and and you know a lot of California cities San Diego San Jose as having horrible water issues well I went and did some homework over the weekend and I looked up all the LA district water and sewer ordinances and their book of rates and variances by zip code and wet and dry areas and all these things and come to
▶ 10:30 Speaker 4: find out that their fourth tier in Los Angeles is below our second tier here in Massachusetts and then upon a little bit of further investigation I went to water
▶ 10:41 Speaker 4: districts all around the country and then I came back home to the MWRA and the MWRA has an advisory board and the advisory board does a wonderful thing every year they put out a retail rate survey of all the water and sewer systems in the MWRA communities and beyond and and they also include in there some things about around the country so very quickly I looked at first the annual there's one metric I want to define here for you there's a standard used by the American Water Works Association to determine how costs are how cross compare between water districts all around the country and around the world and they use a consumption amount of a hundred and 20000 cubic feet of of consumption that would be the equivalent to somebody in Melrose using 3,000 cubic feet per quarter okay so it's a little bit higher than what our it's higher than what our average uses but it's what they put out there interviews for a number of years as a standard comparison amount with that comparison looking at only the water charges for the city of Melrose that we charge to residences again at 3,000 cubic feet that would amount in Melrose to $870 per year for the charge. I have a graph here that has a lot of 35 MWRA communities on it that are served by both water and sewer. The very top line here that goes way over here is Redding. It's $1,060. The next line
▶ 12:19 Speaker 4: down says Melrose, $870. Again, way over here Redding, right here Melrose. I spoke of the town of Reading I didn't get a good source person there but they're telling me that they have some costs for recently joining the MWRA and being involved in that but I don't know the exact issues around that I want to be clear but if you notice from $870 in Melrose the next one down is Newton 824 we come all the way down here we're going to ignore Woobin at 205 at the bottom because they just assess one charge until next year but Everett Everett the local city nearest $269 for the water costs average water costs for the city of everett now what's really interesting about everett is that their first tier of water and sewer is actually below what mwra charges them for water it's an example where more than twice as much they're they're below what this mwi charges them somerville is another interesting thing it comes in at 645 dollars for water again melrose 870 all these we're the second highest there's what 33 below us
▶ 13:25 Speaker 4: Then, when I look further, and this is distressing to see, just like when I found the inflow and infiltration data that we were the top, the leakiest city in the MWRA in inflow and infiltration, it was distressing to see this come up. Sewer only charges. Again, same metric, 120 hundred cubic feet per year. Melrose comes here in sixth. We weren't quite so bad. We were at 1,184. However, it goes all the way down here, you know, Woburn, well, Woburn's not good, Arlington 599, we'll ignore Clinton, Winchester 313. Clearly other towns are finding things to do, but again, here's a huge amount here, way out on the right here, and all these others are way below us.
▶ 14:08 Speaker 4: Next chart I want to show you is a similar chart, but it's a combined water and sewer use. I don't want you to think that I didn't show you everything here. Water and sewer use. The worst one in the MWRA is Belmont, 2349, under the same 120, 100 cubic feet. Redding, 2231, then Melrose comes in at 2055. We look down below here, not going to the very bottom with Winchester moving in Clinton, Everett, 1002. I notice Somerville here is 1653, again, compared to 2055 for Melrose. We're at the top of these charts of the MWRA water service area. Now you'd say, okay, but we have this expensive sewer system for MWRA and it costs a fortune. That explains that even though that's it, this is the most expensive place in the country. You can't compare it to the rest of the country.
▶ 15:02 Speaker 4: Well, the MWRA advisory board did. They put out a list of all the water and sewer districts, 27 large US cities here. And this is the 2016 water rate survey based on 2015 water rates. Actually, the rate that we have today is in this here. So the worst combined water and sewer in the country is Seattle, Washington, 2,214. They have issues there. San Francisco, California, 2,194. Number three on this list of 27 large cities plus Melrose is Melrose. We are one of the most expensive water and sewer systems in the country. If that doesn't have an impact on you finally, I don't know what does.
▶ 15:57 Speaker 4: The issue is that our first tier rate, which we all agree is a subsidized rate at $6 and something, is above what much of the rest of the country in some of the worst water supply areas charges for their highest tiers. What we're talking about, but ignoring these facts doesn't get us anywhere. Going along and saying, oh, everything's just fine and we're doing terrific and we just have to have this crazy rate so that it looks better on the lower end for people and we'll give senior discounts, something's not working here.
▶ 16:33 Speaker 4: And I wish at some point we could have the real conversation about Melrose. Now, I don't believe that our water and sewer people are doing horrible things. We know what the MWRA charges. There's a lot of MWRA communities that are charged the same as we are with the same rate structure and they're doing far better in their water rates than we are. The question becomes is when are we going to look at what's really going into this? We can certainly imagine that the city ought to be paying its own water bill. I didn't look to find out whether Los Angeles pays their own water bill. We could also really evaluate these indirect costs and how large they are. One thing that Mr. Taymor said that I wanted to repeat is that we've seen no evidence of any of these expressions of cost centers that we have to somehow fund in public. Has anybody audited what we're calling indirect costs to the Water and Sewer Enterprise Fund? You know, this year's charge for 100 cubic feet of water is $2.61. I talk about water frequently because it's a more simple calculation than looking at the sewer side. It's a much more complex calculation, but some of the principles still apply in terms of what I'm talking about.
▶ 17:49 Speaker 1: Mr. Ramirez, we're going to pick this up again in a couple of minutes when you can speak at length at the Water and Sewer Public Hearing. If you could hold that thought for now.
▶ 17:56 Speaker 4: i'll do that and i'm just going to pass out to you if i may the um this chart that shows 27 cities
▶ 18:20 Speaker 1: in melrose if i may for anybody else who wishes to speak this evening we will be having later on in the evening a public hearing again relative to water and sewer and speakers are welcome to come forward uh and speak at that time again if they wish motion to close public participation for the main meeting alderman mortimer moves to conclude public participation the motion is is seconded by Alderman Boycelle on the motion. All those in favor? Aye. Anyone opposed? Motion passes. I will point out for the public and anybody who will be watching in the future that this meeting is being taped and will be broadcast in accordance with the Massachusetts Open Meeting Law.