2016-06-30 / Front Page

Stormwater Charges Considered

By Barry Bridges

Facing ever-rising infrastructure costs, the Newport City Council has directed the administration to research the feasibility of establishing a stormwater utility to manage the costs of maintaining and upgrading the city’s stormwater drainage system.

Councilor Naomi Neville introduced the measure on Wednesday, June 22. The resolution envisions a potential new utility that would produce its own revenues through a to-be-determined fee structure. Right now, sewer use fees cover the costs associated with stormwater.

“A number of towns, especially in Massachusetts, have implemented separate stormwater utilities. We’re not alone in the fact that we have stormwater issues, and right now we pay for it through our sewer fees,” Neville said. “We just voted [on May 25] on a $38 million sewer and stormwater contract, 15 percent of which is for stormwater. And yet we have no way of creating a transparent separation of those costs.”

How to set an appropriate fee for property owners will be part of the city staff’s research, but could possibly be based on factors like the percentage of impervious surfaces (such as parking lots, buildings, or driveways) that a parcel contains. “But you can mix and match ways to generate revenue,” Neville told Newport This Week, adding that the city’s urban environment and three residential zones should likely be figured into the equation.

“The fee structure could be implemented across all property owners, whether for-profits, nonprofits, residential, or commercial,” she said from the dais on June 22. “So there’s the potential of creating a more equitable system.”

Considering the complicated issues that could be involved with setting up a new utility dedicated to stormwater management, the council did not establish a timeline for the administration to complete its findings.

“We’re going to need some outside help to vet it, to develop it, to review it, and to present to you some alternative approaches to either a stormwater utility or some type of stormwater management fee,” said City Manager Joseph Nicholson. “We recognize that 15 percent of our water pollution control budget is stormwater…. We believe that we could probably successfully separate that out.”

Sewer or combined sewer overflow (CSO) charges currently billed to customers could potentially be lessened if the plan materializes. “It may ameliorate some of the costs that we charge on sewage right now. It’s something that a lot of communities are looking at,” Nicholson stated.

Under the 2017 budget recently adopted for the fiscal year beginning July 1, the sewer charge is $17.00 per 1,000 gallons of water consumption, up sharply from the 2016 rate of $13.89. The average residential customer using 4,000 gallons monthly will pay an annual sewer charge of $816.00.

Additionally, property owners pay an annual fixed CSO fee that is prorated on monthly utility bills. While the amount is based on the size of a customer’s water meter, most residences pay $192 annually and most commercial properties pay $265 per year. This fee has remained steady in recent years.

Director of Utilities Julia Forgue has said that a problem of the system is that fixed expenses are covered by variable revenues. She said at a budget workshop on March 2 that, notwithstanding emergency repairs that often arise, “the majority of our expenses are fixed, but we have a variable revenue stream. When consumption goes down, our revenue also goes down.”

Past rate increases have been tied to declines in consumption, but officials have reiterated several times that they are mostly attributable to upgrades required under a 2011 consent decree with the federal government, under which the city agreed to eliminate discharges of sewage into Narragansett Bay from its treatment plant and wastewater collection system.

On May 25, councilors approved a 20-year $38 million design/build/ operate contract for water system capital improvements necessitated by the decree. “We must retrofit out plant; we don’t have a choice,” Nicholson told councilors at the time.

The stormwater utility resolution is the latest in the city’s efforts to find alternative ways to fund infrastructure capital needs. Two bills introduced in the legislature this session by Sen. Louis DiPalma, D-Middletown, to buttress the city’s expenses died in committee. Senate Bill 2686 would have made convenience stores subject to the state’s meals and beverage tax, resulting in more revenue to the city, while S.B. 2987 would have given an additional one percent in meals and beverage taxes to Newport and Middletown.

The purpose of the proposed measures was to spread the burden of sewer and stormwater costs more fairly among all those who impact the system, including the city’s visitors. As the idea was being debated earlier this year, Nicholson said, “Tourists are wonderful for Newport, but they also have to share in the problems we have with roads and sewers…. The whole idea is to find other revenue sources and we always have to keep that in mind.”

The city manager encouraged councilors to request that the legislation be re-introduced next year.

As for a stormwater utility, Neville told Newport This Week, “Since a lot of these projects are mandated [largely through the consent decree], it makes sense to separate it all out. And it would help make sure users are contributing what they should.”

Before the unanimous vote approving the resolution, Mayor Jeanne-Marie Napolitano agreed on the bottom line and said, “Every time somebody hears about sewer charges, their eyes glaze over. I understand that. But they don’t glaze over when they get the bill.”

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