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Biggest users pay less: Claremont urged to examine water, sewer fee structure

By GLYNIS HART
[email protected]
CLAREMONT — The city’s water billing bookkeeper, Paul Cioffi, presented an annual update on the water and sewer rates to the city council, and pressed the council to look into whether the current rate structure serves the city. 

Residents will begin receiving quarterly bills this summer instead of yearly ones. Cioffi said the change will make the bills easier to pay because they’re smaller, and help homeowners catch leaks earlier. 

In 2016 the water department increased the rates “substantially,” said Cioffi, because revenue was not meeting expenses. The rate increase was planned to step up each year over five years. 

However, his presentation looked into the current rate structure and gave some data comparing Claremont’s rates those of other cities. The New Hampshire Water and Wastewater Rates Report collects data from 138 municipal and non-governmental wastewater utilities in the state. Only Claremont and Berlin have a rate structure that drops the rate substantially for the largest users of municipal water. 

In 2019, water users in Claremont who use more than 25,000 cubic feet per year pay $5.30 per hundred gallons. Users with minimal use, less than 2,000 cubic feet, pay $2.40 per hundred gallons. The middle tier of users pay the highest rate: $6.60. 

When the rate change began in 2016, middle-tier users paid $4.10 and the highest users paid $3.20. 

“We might want to look at whether the rationale is still there,” said Cioffi. Depending on how many high-volume users there are, raising the rates on 25,000+ gallons could obviate raising rates on everyone else. 

“We were trying to attract other large users and encourage industrial development,” said Councilor Scott Pope. “How many large water users are there?” 

The average two-person household consumes 22,400 gallons semi-annually. Cioffi said a business using more than 25,000 gallons could be a restaurant or a factory. “The biggest users of this middle tier are residential, which could be apartment buildings,” he said. 

The average annual cost of water/sewer use per billed customer in New Hampshire is 2.1 percent of the median income. Compared to that, Claremont’s users pay less: 1.8 percent of the median household income. 

 “I don’t know if it’s a good rate structure or not,” he said. “I’m just showing the average to you and how it compares to the state’s average.”

The rate increase is important to cover the cost of maintaining the city’s water and sewer infrastructure. 

In 2018 the water revenue covered 95.2 percent of operating expenses, debt payments, and depreciation for the department. Cioffi said covering depreciation is critical to being able to replace assets when the time comes. 

“It’s worth taking a look within the next year or so to get an in-depth analysis of what our rate structure should be,” said Cioffi. 

He suggested the city use a set of common objectives to evaluate the rate structure: Do they support public health? Do they comply with Environmental Protection Agency regulations? Do they support full recovery of costs? Are they affordable? Do they serve the city’s objectives in attracting new business? Its objectives regarding conservation? 

“There’s a lot of data here,” said Cioffi. “I just think we need to take a look at what we need to do with our rates.”

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