Waterbury aldermen debate large water-rate increase to close $5M budget gap; options to phase in discussed

Waterbury’s Board of Aldermen spent much of its May 21 special meeting focused on a proposed increase to the city’s water rates that finance officials said is needed to eliminate a projected $5 million draw on the water enterprise fund.

Finance and water officials presented a two-part proposal that they estimate would raise about $6.5 million a year: roughly $4.0 million from a higher consumption charge (CCF) and about $2.1 million from higher quarterly meter service charges and meter-size adjustments. Under the administration’s plan, the base 5/8-inch meter quarterly charge would rise to $24 and consumption charges would increase to about $3.50 per CCF; officials said they would also raise fixed charges for meters larger than 5/8 inches to shift more cost to commercial accounts.

“The combination of adjusting the CCF rate as well as the service charge…we’re projecting an increase in revenue in the neighborhood of $6.5 million,” said the city finance official who addressed the board (Mr. Leblanc). He told aldermen that without changes the proposed budget assumes a $5 million use of fund balance to balance operating costs and debt-service contingencies tied to recent capital projects.

Why it matters: Water department leaders said the system is undertaking more than $30 million in near-term capital work (relining supply mains, pump-station replacement and water-treatment-plant upgrades) and will add annual debt service for projects financed through state drinking-water loans or bonds. Officials said the water enterprise has a cash operating deficit that rate increases are designed to resolve while restoring contributions to a sinking fund for future capital needs.

Debate and alternatives: Several aldermen urged a phased approach, citing rising costs for households. Multiple aldermen and the finance staff discussed splitting the proposal’s components rather than adopting the full package immediately: one scenario discussed was raising the consumption charge now (the larger revenue component) while delaying or scaling back increases to the small residential meter service charge and focusing service-charge increases on meters larger than 5/8 inches (commercial customers). Officials estimated raising only the larger-meter service charge would generate roughly $1.1 million; keeping small-meter service charges unchanged would leave a gap of about $1–2 million that the board would need to address.

Alderman Jane and others pressed for options: “Is there a way to give our residents a little break and do the commercial side this year?” she asked, referencing the city’s recent revaluation that hit residential properties harder than commercial ones.

Watertown settlement and other offsets: Officials reviewed proceeds from litigation with a neighboring municipality, explaining the city received $36.1 million in combined payments; roughly $9 million was credited to Waterbury’s water fund and about $5.1 million of that was placed in an unallocated water capital account for infrastructure and emergency repairs. City staff said settlement funds were allocated by enterprise (water vs. sewer) based on the accrual analysis and are not freely fungible to replace an ongoing revenue stream.

Next steps: Officials said the board’s budget calendar includes a second public hearing on the city budget on May 28 and a vote on the budget targeted for June 3. Several aldermen requested that finance staff model two or three alternative rate scenarios (full package, consumption-only, and a mixed/phase-in option) and present the dollar impacts before the vote so the board can consider compromises. The meeting adjourned after members set the schedule.

What officials did not say or could not confirm: The administration characterized the $6.5 million estimate as a projection; actual revenue will depend on final rate design, collections and whether the board phases changes in. Officials said any decision to use sewer-fund cash to cover water needs would require legal review and might be constrained by state statute and enterprise-fund rules.