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Despite deficit, Holyoke holds off hiking sewer fee

August 4, 2021

HOLYOKE — Despite several proposals to remedy a deficit, the City Council on Tuesday failed to set a new sewer use rate.

The Sewer Enterprise Fund is allocated $9 million annually, with 93% collected in fees to cover operational costs. The remaining 7%, or $500,000, the city is “behind on,” said Councilor at Large Rebecca Lisi. The deficit is pegged at $1.1 million.

“We need to set a new rate to cover the operating costs,” she said.

The current sewer rate is $6.65 per 1,000 gallons of water used. Councilors proposed new rates between $6.70 to $7.80.

Some councilors questioned if a two-thirds majority, or nine votes, was needed for approval. As a result, the council tabled the vote until the City Law Department renders an opinion.

Lisi’s Ordinance Committee proposed a $7.77 rate, which she said represented the “bare minimum” to make a dent in the deficit. But she added that rate “would not be relevant” in a year.

“It doesn’t build in any cushion for any contingencies or emergencies that come up in the next year,” Lisi said.

Acting Mayor Terence Murphy proposed an $8.05 rate. Murphy said his goal was to balance the sewer fund, allowing the new mayor in November to “start without having to worry about an Enterprise Fund deficit.” He believed the $8.05 rate would have generated a surplus, holding off on another rate increase until fiscal 2026. He also proposed a cash transfer to lessen the impact on rate payers.

“Obviously, this has been a tough year for many people economically with lost jobs, lost income,” Murphy said.

Councilor at Large James Leahy said the need for a fee hike comes at a “terrible time.” He recommended hiring an outside firm to boost collections and place liens on properties with outstanding bills.

Councilor at Large Howard Greaney said taxpayers’ “backs are being broken,” and he would not support any increases in sewer fees or property taxes until the city streamlines its budget. “Until we make the cuts that are necessary to give relief to the taxpayers,” he said.

Ward 5 Councilor Linda Vacon said the proposed rates assumed the city could not do better the 93% collection number. She noted the Water Department has a 98% collection rate. She said some taxpayers have no direct access to the sewer system but subsidize the sewer fee.

Councilor Joseph M. McGiverin countered that the deficit is not entirely due to a “collection problem,” saying the bulk of the debt is from a “lack revenue for the daily costs of operating” the wastewater treatment plant.

McGiverin cautioned that if user fees did not balance the Sewer Enterprise Fund, the General Fund Budget takes a hit for the $1.1 million deficit. “That alone could wipe out Free Cash this year,” he said.

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