← City Council · 2016-05-02 · City Council Regular Meeting
Public Participation
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▶ 36:29 Speaker 1: Our meeting this evening will be recorded and videotaped and rebroadcast on local cable television in accordance with the provisions of the Massachusetts Open Meeting Law. Motion to open the floor for public participation, Mr. President. Second. moves that we commence public participation the motion is seconded by alderman boyce l on the motion to commence public participation all those in favor aye aye anyone opposed motion passes anyone who wishes to discuss any order that is on our agenda this evening please come forward to the table in the center of the room identify yourself and speak hi i'm phil taymor i live at
▶ 37:03 Speaker 5: 44 larksmont road it's a little unclear to me what your process is i have comments that relate to both water and sewer budget but moreover the water rate setting process i'm not sure if this is the best meeting to talk or whether a subsequent meeting but i'll speak at this meeting yeah
▶ 37:21 Speaker 1: actually sir both of those issues are on the orders that are before us this evening so either
▶ 37:29 Speaker 5: one would be or both are in order to speak i've previously presented a list of water and sewer related questions to the water and sewer committee and this board to which i've received a few answers so far i've attended the last two water and sewer committee meetings as well water and sewer committee meetings as well so i will recap briefly two of my outstanding underlying criticisms today and expand on one most pressing question first i repeat my criticism of the city's recently disclosed change to its billing practice for the cost of its internal water and store consumption several years back when it started billing rate payers instead of its own departments of property tax funded budget, as had been long standing past practice. The change was not mandated or even encouraged to discourage by the Massachusetts Department of Revenue, to whom I've now talked. The city's choice shifted $270,000 of cost annually to rate payers, equivalent to 2% of the water and sewer budget and a 2% rate increase. If the city felt the change was best or better or equivalent practice, it could and should have reduced its property tax budget to offset the amount shifted in order to remain revenue neutral to residents it did not i further find the city's decision to stop charging its own departments irreconcilable with its decision to start charging residents at tiered rates to encourage their attention to consumption in fiscal year 2014. second i repeat my criticism of the city's combined water and sewer spending increases of the past two years while complaining about mwra charges, which increased at an average of about 4.5% per year, the City increased the spending it controls by well over 10% annually, whether excluding or including allocated charges from the property tax budget, reserves, or debt service. In fact, I believe the City increased spending closer to 14% a year, spread across all areas. These increases remain institutionalized in today's spending base, off of which 2017 will now simply grow third and finally I repeat strongly my pressing question and criticism of the city's current dramatic unsupported rate unsupported tiered rate structure Melrose top tier Melrose's top tier combined water and sewer rate among the highest of MWRA district cities is 36% higher than its lowest tier considering that MWRA charges represents 61% of total spending and unequivocally are constant per unit of consumption, the remaining city-controlled spending portion has to be proven 93% more costly per cubic foot for a top-tier user. No one has ever supported the contention that top-tier users are this 93% more costly. The MWRA may or may not require increasing block rates. Interpretations and actual city practices vary, But the MWRA allows them only to the extent they fairly reflect the resource demand of high-volume users. The Water and Sewer Committee plans to present the Board with various 2017 rate options for its consideration, varying the number and size of consumption tiers, making small changes in the allocation of costs between base fee and variable rate components, and reducing sewer charges for residents who don't have second meters. These minor changes do not change the dramatic tiered rate structure. which is a big issue and source of inequity today. The Water and Soar Committee, whose meetings I've attended, has focused primarily, if not solely, on the impact any potential changes might have on lowest tier users, who certainly do outnumber higher tier users. The committee has not considered collapsing tiered rates because that would require a significant increase in these lowest tier rates. However, the lowest tiered rates are low today only because of the huge insupportable subsidy they receive at the expense of higher tier users, including those people unfortunately trapped in commonly metered multi-unit housing situations. In contrast, no regulated public utility provider that I know of, electric or gas or other, would ever be allowed to charge one set of customers at dramatically high tiered rates in order to merely and excessively subsidize others. And although conservation has its place, as some people on this board have also opined, It should not drive the rate structure since MWRA district water is not in scarce supply. This board should force the city to adopt a rate structure based on the proven unit cost of providing service to each consumption tier. For every cost element which is not constant per cubic foot across tiers, the city must calculate and explain in a straightforward fashion the percentage the element comprises of total water resource spending, the percent by which that element is more costly per cubic foot for a top-tier user, and the specific reasons for that cost differential. The city needs to collapse its current rates by much more than any option that will be presented to this board. After all this time and repeating questioning, the Water and Store Committee still has not provided any explanations or support for its dramatic tiered rates. Either the city can't support them, or the city doesn't believe it has to support them in compliance with MWI regulations as described. Either way, I ask this committee, the Water and Sewer Committee, this one final multi-part question again today. One, how have you computed rates by tier? Two, can and will you provide cost element analysis supporting the rate differentials between tiers? Three, did you instead, the Water and Sewer Committee, merely and simply set the differentiated rates arbitrarily and you indeed have no support? And four, what are both the logical and regulatory basis for your approach? I ask this Board of Aldermen to once and for all force the Water and Sewer Committee to answer this final, simple question and resolve the matter of insupportable rights.
▶ 43:40 Speaker 1: Thank you. Thank you, sir. Thank you.
▶ 43:51 Speaker 4: anyone else who wishes to speak this evening hi I'm Jerry Moroz I would like to speak about some of the specific issues regarding the water and sewer items that are on the table tonight first
▶ 44:06 Speaker 4: you know I've come here a number of years through this process of the city budget and the water and sewer rate setting in the water and sewer budgets themselves every year I present some information
▶ 44:19 Speaker 4: I'm well grounded in my facts, I do my research, I'm good at analytical skills, and I come here and I present to you what I see in the hopes that somebody else will look at it and take a look and try to figure out, you know, even if they don't agree completely with me, where I'm coming from and why what I'm saying is defensible and arguable. Every year, after I get done speaking at a public comment, I sit down and we have all the people from the city come up and say what essentially amounts to a political presentation about defending what the mayor says, what the mayor wants. That's their job. They work for the mayor. But when they come up here and read text from a very specific letter that we don't know what the question was that was asked and what the answer was, what somebody was framing about it in isolation and somebody says that it's illegal if we do anything else. I take exception to that because I do my research. I think thoughtfully and carefully about all the issues and where they come from. One of the issues on the table here is the issue of city water use and city sewer use. The schools, the fire department, police station, city hall, the parks, everything.
▶ 45:35 Speaker 4: In the accounting procedures under the Uniform Massachusetts Accounting Standards, it's not appropriate for a department for accounting purposes to bill another department for a service done for one department. Departments aren't autonomous entities that can bill other departments. There's an informational guidance released by the Department of Revenue from 2008 and it's 08-101. Item number 17 in the questions at the end talk about this specific issue and they say that
▶ 46:11 Speaker 4: under the accounting procedures you wouldn't characterize a charge from the enterprise fund to the schools or to the police station or the fire station but they say right in that document that it's it's appropriate to take those charges into account in the budget process the mayor's people have come here year after year after year and said no you can't do that you know they the city charges have to be in the water and sewer enterprise fund but I just asked you, under basic element of common sense and fairness, why would an expense of $270,000,
▶ 46:49 Speaker 4: more than a quarter million dollars, be charged to the rate payers of a water and sewer enterprise fund, which the purpose of separating an enterprise fund is to make it autonomous so that the costs and charges are commensurate with a separate entity? The city is a consumer of that enterprise fund the enterprise fund ought to be receiving revenues from the city we all know that the that the city does a whole lot of work to try to identify any kind of you know obscure indirect cost that the city might be paying for and we charge that to the enterprise fund so we do all this work to find more charges to give the enterprise fund from the city side but the thing staring us in the face the two hundred and seventy thousand dollars that the enterprise fund is in deficit for because the city's not paying its bill that just passed along to the ratepayers I find that as as an as a tax on the rate payers of the enterprise fund which they are city expenses that aren't being the revenues for those aren't being raised through the appropriate channels of what cities are allowed to raise revenue for I would say contrary to what's been said here before is that it's not illegal for the city to pay its fair share of its expenses and to pay for those with revenues that the city drives according to the typical revenue sources of the city that's one
▶ 48:19 Speaker 4: thing that the city has claimed that would be illegal if they followed my reasoning the next thing is what mr. Tamar just talked about is the increasing block rates the key element there is about the for people who are very, very high volume of users, if we had a strain on our system because of them, if we had to go out and we had wells, we had to drill a new well to accommodate this person's million gallons a day, that is a real cost that we would incur that would be a resource demand because of that high volume user. We don't have that. As much water as we ever need, MWRA is glad to give it to us, they're glad to give it to us at about $2.50 per 100 cubic feet.
▶ 49:03 Speaker 4: It's not illegal to have a flat rate in Melrose with our users and our use history. Even if you wanted to have an increasing rate, and Mr. Taymor has been very excellent about highlighting I think it's 48% to 49% higher in the third tier than the first tier. Even if you wanted to technically have an increasing block rate, there is nothing that would prevent you from having an increasing block rate where the tier two is one penny higher than tier one and tier three is one penny higher than tier two. As absurd as it sounds, if that's really your concern, you could do that. At the same time, this arbitrary 2,000 cubic feet per quarter, some people make you think
▶ 49:40 Speaker 4: that it's very thoughtful. And where it comes from is this considered an average use of a person of using 65 gallons per day per person. 65 gallons per day per person of water and sewer, or of water, just say, is over the course of 90 days times two and a half people about equal to 2,000 cubic feet. So what we've just done here in this process is we've conflated a per person average with a certain number of people on average and we're applying that to a water meter that could have one person behind it, could have a family of five or six behind it, it could have a condominium of 150 behind it. Again, common sense, basic fairness, on the face of it, it doesn't flow. The logic doesn't flow, that you're taking, you know, if you want to really say we need to have people use 65 gallons per day, well, tell the person who has a medical issue they have to use a lot more than that, well, sorry, you've got to pay more money, which is what you're doing. Tell the people who hire you, you know, who associate with more people, they live with more people, that, you know, we're going to tax you because of that. None of those things are fair.
▶ 51:02 Speaker 4: The first element about the municipal water use and not billing that to the Enterprise Fund harms the Enterprise Fund's financial stability, and it harms us improving our status
▶ 51:17 Speaker 4: with the MWRA in terms of what we use and what we're charged for. Every bit of money that the Enterprise Fund doesn't have, that we're not putting into inflow and infiltration is an investment that we're not making which that investment has substantial returns on the investment I want to address another issue the issue of reserves they're in your budget in the water and sewer budget everybody's saying that we have to have these huge reserve amounts well if we were an ordinarily water utility in Nevada and we had to drill wells and
▶ 51:50 Speaker 4: protect an aquifer, and have pumps in those wells, and have transmission lines, and have a treatment plant, and have storage towers. There's a lot of reserves we need in case those things go bad. What do we have in Melrose? For infrastructure, we have a few pipes. We don't need that level of reserves that the consultant prior in this one here, he claimed at your meeting a few weeks ago, 25% he thought, you know, they're acknowledging maybe we'll go to 10 this year or something like that, we're trying to get to 10. but the truth is every bit of excess funds we have in reserves given that we're not going to have a catastrophic failure of that magnitude unless we have an earthquake every bit of money that's locked in reserves is not working for us as an investment in our enterprise fund for inflow and infiltration issues on the sewer side and we still have leakage of pumpage on the water side as well so please in this budget process ask the questions why ask for the reasoning behind it I would certainly love an opportunity for this board to have enough to give the public an opportunity who cares to come forward and rebut some of the things that you will hear five or ten minutes at the beginning meeting is not sufficient and I do want to say that the water and sewer committee as is this goes to the budget as well the water sewer committee as is currently composed I don't believe serves the city well and the reason I say that is is that most of people in that room are talking about water and sewer issues all the time anyway technical violation of open meeting law but that's not my biggest concern my biggest concern is that that committee really doesn't have a complete and thorough discussion of the underlying issues that i'm talking here about that mr taymor is talking here about they hear a number they hear somebody say something they vote to approve it there's not a whole lot in that room of the water and sewer committee doing some really deep work in figuring out what is you know teasing out what are the tough things here there's a few good questions don't get me wrong but there's not a process there that's working and i believe for the the citizens one other quick thing this idea of throwing out a bone of a senior discount for water and sewer to people arbitrarily and that's what it is arbitrarily at some level you'd be much better off charging a fair flat rate to people no matter where they live in the city then way over charging somebody by hundreds and hundreds of dollars and giving them 132 senior discount in the end you know that that's center it's to me it's cynical to approach it in the way that it's being approached so i'm sure we'll talk again thank you for your time i appreciate it as always for those who stay to listen to me and um and we'll
▶ 54:39 Speaker 1: see you at another meeting thank you thank you sir anybody else who wishes to speak this evening
▶ 54:42 Peter D. Mortimer: Motion to close public participation, Mr. President.
▶ 54:45 Speaker 1: Second. Alderman Mortimer moves to close public participation. The motion is seconded by Alderman Boycelle. On the motion, all those in favor? Aye. Anyone opposed? Motion passes. Public participation is hereby concluded for this evening.