Use this search box to find articles that have run in our newspapers over the last several years.
Date: 9/5/2023
HOLYOKE — During the Ordinance Committee’s Aug. 22 meeting, Public Works Commission Chair Mary Monahan sat with councilors to discuss and propose raising the sewer rate from $8.02 per 1,000 gallons used, in order to address what has been a consistent deficit in the city’s sewer enterprise fund.
Monahan explained to the committee that the city was informed by the Division of Local Services that they will not approve a tax rate for the city unless the enterprise fund comes in with a balanced budget. She added the recommended increase includes additional adjustments such as adding $135,000 to the sewer enterprise account.
According to Monahan, the adjustment aligns with the average representing the past five years’ costs associated with sewer banks of $235,000. The previous year’s allocation for the enterprise account was only $7,500.
Three sewer rate options were presented including the “highly recommended” $8.58, but considering the city’s finances, the Division of Local Services was uncomfortable with the rate.
“It’s apparent — intent or not — the budget has come in underfunded, which creates that issue of where we find the funding for the deficit,” Monahan said. “They felt the finances in the city of Holyoke weren’t recent enough for them to be comfortable to allow us to go over two fiscal years,”
Option two was a rate of $7.88 and brought in an outside funding source. This option did not include the additional $135,000 to close the deficit. The $8.02 rate would impact residential users by $7.55 per quarter.
“We’re recommending a FY24 sewer rate of $8.02,” Monahan said. “The impact for the average user will be $7.55 per quarter, and this reflects with data that we know now, a balanced budget for the enterprise fund in FY24.”
Monahan proposed an in-depth study of the sewer rate and associated costs and added the commission’s efforts go beyond immediate fiscal concerns. The study for fiscal year 2024 would identify true costs associated with wastewater collection and treatment, identify other costs currently funded by the sewer enterprise fund, establish a five-year capital improvements program and recommend a funding program and strategies including review and city approval.
Mayor Joshua Garcia is seeking $100,000 from available funds to support the review, according to the discussion. The hope is that in the coming months, they will establish a clearer understanding of the financial demands of the enterprise fund and how to meet them sustainably.
Monahan noted that in 2021 interim Mayor Terence Murphy attempted to secure an $8.05 rate, but the City Council compromised at a $7.50 per 1,000 gallons used rate, and that if the initial proposal from Murphy had been approved it potentially could have prevented the recent deficits.
According to Monahan, the FY24 budget recommendation is based on available data and urged councilors to prioritize resolving this issue.
“All of this works if you do it all together. Otherwise, we’ll have the same discussion a year from now,” Monahan said.
When opened to discussion among councilors, At-Large Councilor Joseph McGiverin explained the challenges of maintaining a balanced budget, especially as billing for the first quarter of the fiscal year had begun.
“Even if we pass the rate in an upcoming City Council meeting, it’s not going to go out until the second quarter,” McGiverin said.
McGiverin later claimed oversight on the city’s wastewater treatment plant could be to blame for the current stormwater problems. He said the treatment plant, constructed in the 1960s, was inadequately sized to cater to the city’s needs.
Ward 5 Councilor Linda Vacon said she was concerned about the financial burden on taxpayers, specifically those without access to the sewer system.
“For the last five years, these taxpayers have been subsidizing the sewer system with their property taxes,” Vacon said.
Monahan explained the system’s reciprocity, noting that “ratepayers have also subsidized citywide stormwater management.”
At-Large Councilor Kevin Jourdain said there needed to be transparency and a detailed examination of the $7.3 million contract as it was important to understand where every dollar was going. He added he was worried about the system being used to circumvent budgetary limitations, ultimately affecting residents.
“I continue to want to know where all that money’s going and how it’s calculated. We need to make sure that all those dollars are accounted for. We’re only paying for what we should be paying, and I believe that is, in part, subject of its own study,” Jourdain said. “The last resort answer is always a rate increase. It’s a circumvention of [Proposition] 2½.”
At-Large Councilor Israel Rivera said the council has had past discussions on the rate increases and missed opportunities to find a resolution that could have prevented this issue.
“If the council had voted for this two years ago, we might have made steps in the right direction,” Rivera added. “I believe in the long run, my kids, my kid’s kids, everybody else’s future will be able to benefit off of the forward planning that we’re doing now. Hopefully we get a five-year plan and after those five years are up, we can then see how things are in regard to our fiscal situation with sewage and DPW overall. We should be doing this in every department more or less.”
The committee voted 3-2 in favor of recommending that the City Council look to adjust the sewer rate ordinance so discussions will continue in the council’s September meetings.