By now, many Belleville Water Customers have received their most recent water bill. Whether you are a residential or commercial customer, that bill reflects a recent increase to our water rates. Several Council Meetings ago, after consideration and at the urging of our financial professionals, the Mayor/Council voted unanimously to increase water rates. As the first round of commercial water bills were issued, I wrote a letter of explanation, which can be found on my Mayor’s website, www.MelhamforBelleville.com. That letter explains and justifies exactly why we were forced to make this difficult decision.
By way of background... Most know at this point that Belleville has a contract to purchase our water from the City of Newark. While Newark’s sale rate to Belleville often ticks up gradually, for some reason Belleville had not raised rates since 2012. In my opinion, this inaction was a major disservice to the public. This lack of oversight and management left Belleville’s Water Utility running a deficit for years. Next, we have been out of contract with the City of Newark since 2016. I have no idea why the prior Administration let it lapse, but the end result is a huge outstanding balance. Why? Basically, the Township has been paying the 2016 rate for the past four years. While my administration has been working on the renewal, in order to bring the contract current, we must pay the City of Newark $1.6Million, representing the four year difference from the 2016 rate to the 2020 rate.
Back to the here and now. I stand 100% behind the facts and figures contained in my rate increase letter, however, after several meetings in Town Hall last week, I now question the data our professionals used to calculate the new increase and the estimated projected revenue it would generate. I do not believe our financial team had all the data needed, or for that matter, the correct data needed to make the recommendation on the amount of rate increase for Council consideration. In addition, we increased commercial rates by 300%, but at no point, did we even know how many commercial properties we have. Therefore, how can we in good conscious anticipate the revenue???
Again, while I understand why we need to raise the rates, I have lost faith that the analysis performed to strike the new, higher rates, was performed correctly.
In my opinion, the new rates, correctly separate residential and commercial. After all, must utilities, including PSEG charge different rates for residential and commercial customers. The problem as I see it is that our new rates were merely backed into in an attempt to meet both our outstanding $1.6M obligation to Newark and to, at a minimum, cover the cost of the current rate the City of Newark charges the Township.
Here’s the good news. I believe the Township’s financial professionals drastically underestimated the number of commercial properties within the Township. And since Commercial properties pay more for water, as they often use our water to generate a profit unlike residential users, if you have 6, 8 or 10x’s more commercial users than originally expected, you will generate that multiple in extra, additional projected revenue. This means, the new rate recently struck by the Council, can and should now be reconsidered and reduced.
To that end, I plan on putting for a resolution on the next Council Meeting directing the Manager to revisit how the increases were calculated to determine if they needed to be raised as high as they were raised. I for one, have seen enough data to concluded they can be lowered. As Water Bills come out, I plan on paying mine, with the hopes of eventually seeing a credit on a future bill.