The bills that arrived in the mailboxes of Hamilton water customers in recent days reflect new water rates that were approved in February. It is the first hike in the water bills since 2008 and the rates are still below many surrounding communities. Hamilton town officials do not anticipate having to increase the rates again for several years.
The new rates are a combination of a flat rate service charge and a usage charge. The service charge – which has gone from $20 to $60 – is an equal charge to all water customers and covers the debt payments for the cost of upgrading the water plant and distribution system. The usage fee covers the cost to operate the system, according to Finance Director Deborah Nippes-Mena. Currently, the town has bonding for $5 million – approved by voters in 2012 – to pay for water system improvements. Much of that work has been completed.
The annual debt payment for the water system in fiscal year 2016 is $609,713, which is up from $159,000. Older debt for water plant and filter system upgrades will be completed by the time bond payments for Phase II, approved at the Annual Town Meeting in April this year, will be bonded in 2019-20.
It is possible that new housing developments could become a large enough customer base to absorb the additional cost for Phase II.
Unlike the service charge, the usage charge depends on how much water is used and the rate goes up as more water is used. The water system’s operating budget, which is funded by the usage charge, has been growing 3 percent annually, largely because of increased pension and health insurance costs, according to Nippes-Mena.
The Hamilton Board of Selectmen approved the new water rates during a vote on Feb. 5, with an effective date of Jan. 23, which was a few days after a public hearing about the new rates.
The new, higher water rates were discussed at several public meetings, where it was explained that the additional revenue was needed to support the growing cost to operate the water system and the new debt payments for water distribution system improvements. In addition to discussion at several Board of Selectmen meetings during the past two years, the new rates have been discussed at Town Meetings in 2012 and 2015 when voters were asked to approve borrowing money for the water distribution upgrade.