LWSC eyes rate hike of 3 to 4 percent

LYNN – The Water and Sewer Commission is hoping to limit an anticipated summer rate increase to roughly $25 – 3 to 4 percent of the average ratepayer’s $866 annual bill.Water and Sewer chief financial officer David Travers said the commission is months away from reviewing a budget and setting a rate with a public hearing on any increase slated to be scheduled until June.A 3-4 percent rate hike would match the current consumer price index and be significantly smaller than the 14 percent rate hike approved by the commission in 2006 and the 11 percent hike approved last year.”That’s our goal but it is premature to say what the rate will be,” Travers said.Water and Sewer officials blamed the need for those double-digit hikes on rising gasoline prices and a $1 million hike in electrical costs. Declining revenue also contributed to the increases.Lynn Plastics, the commission’s sixth-largest commercial customer, closed in November, 2005 and Garelick Farms reduced water consumption in 2006, further cutting into commission revenue.”Hopefully we’re past that window,” Travers said.He said last summer’s relatively hot weather increased residential water use but warned that home foreclosures are increasing the number of empty residential properties using little, if any, water.The combined water and sewer rate, or the amount the commission charges per 100 cubic feet of water use, has climbed from $2.58 in 1987 to $5.10 in 1997 to $8.66 in 2007 with rate hikes remaining less than 5 percent annually between 1997 and 2004.Lynn’s combined rate is relatively low compared to many northeastern Massachusetts communities, like Nahant and Swampscott, which had combined rates of more than $1,000 apiece three years ago.Health care and energy costs have been major past expenses for the commission, but successful efforts to negotiate lower rates with insurance providers and utilities have helped reduce these costs.Debt incurred for long-term projects, including the construction of a combined storm and sewer drain network, remains a significant commission expense with 37 cents of every revenue dollar paying principal and interest.