Water Rates to Remain Steady for the Year

NEWPORT -- It appears that the city's $85 million upgrade to its water treatment facilities is allowing for more fluidity in the budget process than first anticipated.

That, according to Utilities Director Julia Forgue, who told City Council members on Wednesday that the latest estimates on the federally-mandated project have come back favorably enough that it should allow the city to put off a planned rate increase until July of 2013.

However, as Forgue explained, the city is still on the hook for an $85 million construction project, and rates are expected to rise significantly over the next five years.

How much remains to be seen, but as Forgue noted, the state Public Utilities Commission has signed off on a multi-year proposal that could see water rates double by 2015 over last year's levels. And already, ratepayers were recently confronted with a 22.5 percent increase that went into effect on Dec. 1, 2011.

It's not completely clear what rates will look like in July 2013, however Forgue did say that the current economic climate may be on the side of the ratepayers.

Specifically, she cited construction bids that came in lower than expected as well as interest rates that remain friendly to borrowers.

"We haven't changed anything (in terms of the project)," Forgue said. "It's just that we have more information now."

Current projections show that the upgrades, to the Lawton Valley and Station One treatment plants will total roughly $68 million for construction, plus an allowance for borrowing costs, engineering work, and other associate peripherals.

According to Forgue, the Newport Water Division is close to finalizing a deal to borrow some $53 million which is anticipated to take the department through the next fiscal year.

The good news is that during that time, customers can expect  their Billing Charge to remain at $18.75, while the retail water rate will hold at $6.43 per thousand gallons used.

The bad news is that the relief will only be temporary.

As far as the construction on the project goes, Forgue reported on Tuesday that while there isn't much visibly to be seen, there's quite a bit of work going on behind the scenes.

"We're moving along," she said, noting that the division is currently going through the permitting process – both before the state Department of Environmental Management and the Portsmouth Zoning Board.

If all continues to move on schedule, work on the Station One facility should begin in earnest in September, just as the peak season comes to a close.