Proposed rate increases deferred
Proposed increases to the city’s refuse, water and sewer rates will be deferred briefly, and residents behind on utility bills during the coronavirus pandemic will get a reprieve until July 1 on service disconnections due to non-payment.
The resolution put forth by City Manager Patrick Roberts and unanimously adopted by City Council during its virtual meeting Wednesday will not only defer the onset of the rate increases and service disconnections, but it will also request that Treasurer Ron Williams do everything he can legally to help taxpayers with financial hardships and paying their June 5, 2020 real estate taxes.
“We had contemplated any number of changes in the ordinance on penalties that may soften the impact of that,” Roberts said. “But after lengthy consultation with the city treasurer, who is tasked legally with collecting those fees, he has asked me to assure the City Council that he has a number of tools at his disposal.”
One of those, Roberts said, is, effectively, a six-month interest-free, no-penalty program that people can apply for to finance the tax bill. If that didn’t work for a taxpayer, the treasurer has the ability to tailor-make a plan for the individual. Roberts said that with personal property taxes not due until December, it is neither timely nor appropriate now to address.
The water and sewer rate increases will be deferred for 90 days and the refuse fee deferred by six months without any reduction in services.
The city has proposed a 26-cent increase in the water rate, a 27-cent increase to the sewer rate and a $1.50 per month increase in the meter service charge. Not counting Hampton Roads Sanitation District adjustments, the city projects water and sewer customers will see a $4.15 per month increase.
Roberts said a 90-day delay in the utility rate increase would mean a $450,000 loss in revenue to the utility fund budget, which would be offset by capitalizing $384,625 in interest and savings of $65,375 in salary.
The proposed refuse fee would be a $3.95 per month increase, from $21.30 to $25.25, though that is billed semi-annually.
Roberts said the refuse fee for residents would stay the same when they see it on their real estate tax bill in December. The new rates, if adopted by council when it is scheduled to vote on the fiscal 2021 budget May 20, would not take effect until June 2021, and residents will see the same level of service they currently receive.
He said there is enough reserve money in the refuse enterprise fund to delay the start of that increase for six months. Roberts said the city has used reserve money for the past two years to offset increases.
Under the resolution, Roberts will have to put forth a proposal by Dec. 16 — the council’s last scheduled meeting of the 2020 calendar year — to determine the fiscal impact and funding mechanism for a utility bill relief program that the city Department of Social Services would run to help qualifying households with water and sewer payments.
Earlier this year, the city suspended convenience fees charged for online services through the treasurer’s payment portal during the pandemic. They included suspending fees for credit, debit, e-check and PayPal transactions. The fees were suspended until further notice because City Hall is closed to the public.
Councilman Mike Duman had also suggested a possible extension in collecting May and June meals tax revenue for 90 days to give restaurant owners more cash flow. Councilman Roger Fawcett agreed with that. City Attorney Helivi Holland said the deferring of meals tax collection has been a conversation throughout the state, but she said it is an issue that the money does not belong to the restaurants, but to the city. Restaurants, she said, collect that money on behalf of the city.
“I think (the resolution) addresses a few issues that will provide some relief for those citizens that have been adversely impacted by the pandemic,” Duman said.
Said Councilman Roger Fawcett: “Hopefully we come out of this where we can get back to some operational normalcy, and we don’t get affected budget-wise and cost-wise through the year. It’s not going to be everything everybody likes, but I think, putting (that) aside … for myself, I think we are at least showing a good-faith effort to try to provide some relief to our citizens and our folks who live here in Suffolk.”