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BOARD APPROVES 11.8% INCREASE IN WATER RATES

Buffalo property owners will pay nearly 12 percent more to turn on their taps starting July 1, with the head of the Water Board warning of "inevitable" rate increases to come.

By a 4-0 vote Wednesday, the Water Board approved an 11.8 percent increase, which will add about $20 a year to the average homeowner's bill. But a rate consultant warned rates might have to rise another 3 percent later this year to offset lower-than-projected revenues.

The higher rates, which will be the focus of a public hearing in late June, will take effect 1 1/2 years after metered water customers were hit with an 18.5 percent increase. Flat-rate customers, who constitute less than 30 percent of the city, had paid an extra 13.5 percent until early last year.

"Unless there's some trend of increased population, we're on an inevitable path of routine rate increases," said Victoria J. Saxon, the board's chairwoman.

While all board members who attended Wednesday's meeting supported the increase, some were visibly reluctant. Warren Galloway complained that the increase was substantially higher than what had been projected earlier this year. The board has spent a few months negotiating a new contract with the private operator who runs the system in hopes of avoiding a double-digit increase.

"It seems like we did three months of nothing," Galloway said. "We spent three months going around in circles."

Not true, said Lisa Foti Milk, an independent rate consultant, who added that water bills would have increased even more without the recent negotiations. She said 3.4 percent of the increase is the result of a $900,000 drop in cash receipts. Part of the problem, officials said, involves revenue decreases resulting from the city program to convert flat-rate customers to meters.

Board members Charles E. McGriff and John R. Sole also grilled officials about what they characterized as a "substantial" rate increase. McGriff asked if other costs, including labor expenses, could be reduced.

The regional manager of American Water Services, which operates the water system, offered one suggestion for limiting increases. James Halliday said the city should consider using employees, instead of hiring outside contractors, for some larger repair projects. He said any push to further reduce operating costs would be unrealistic.

"Expenditures are right down to the bare bone. Further cuts are next to impossible," he said.

e-mail: bmeyer@buffnews.com

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