Average household could see water bills go up $40 per year if rate increases are approved

LACONIA — The city’s board of water commissioners granted preliminary approval to raise the base and consumption rates at their meeting on July 21.

They’ll hold a public hearing regarding the raising of rates at 6 p.m. on Tuesday, Aug. 12, at City Hall downtown. Following the public hearing, commissioners could take a vote to confirm higher rates.

At the meeting on July 21, Laconia Water Works Superintendent Ben Crawford presented the commission with various options to increase revenues. Commissioners settled on a 15% increase in the base rate and a 10% increase in the consumption rate. 

The base rate would increase from $25 to $28.75 per unit per quarter, and the consumption rate would increase from $2.55 to $2.81 per hundred cubic feet. 

The average bill for a single-family home would increase $41 per year, from $355 to $396. If approved, the new rates would go into effect Jan. 1, 2026.

Robert Soucy, a member of the commission and also city councilor in Ward 2, provided the lone vote against raising rates. He said Thursday afternoon he considered a raise in rates to be unnecessary.

“They have a large amount of cash in the bank,” Soucy said, noting he’d rather see those funds put to good use before raising rates. “You don’t need to have a rainy day fund of over $2 million.”

“This increase is necessary as the operational and maintenance costs of the department have been steadily rising,” a meeting notice printed on Thursday in The Laconia Daily Sun reads. “The department also foresees considerable infrastructure upgrades in the near future. All other rates will remain unchanged.” 

Water department staff track expenses and revenues monthly, and project the same two years down the line. June 30 is the end of the fiscal year, and Crawford said Thursday morning staff determined if they didn’t increase rates, they could face a potential deficit two years later.

Commissioners wanted to get ahead of that possibility — the last time they increased rates was three years ago, and they hope to continue making smaller, incremental rate increases about three years apart, rather than larger increases all at once. The latest rate increase, if approved, is expected to get the department through three years of service before another increase would be considered. 

“That’s been efficient for us as a department,” Crawford said. 

Rates were raised in 2012, 2016, 2018 and 2023.

In terms of expenses, salaries is a larger line item, Crawford said. The cost of treating water, maintaining meters, backflows and mains are also core expenses. The cost of a water main per foot is high — an 8-inch main installed in-house goes for between $150 and $175 a foot, and that doesn’t include asphalt work, for example.

If installing a main is contracted out to a private company, the cost could be doubled.

The anticipated development of the State School property, expected to introduce more than 2,000 housing units to the north end of the city over the next decade or two, will eventually have an effect on the finances of the water department, though Crawford said he doesn’t expect to realize a serious impact related to that until several years down the road.

Initial infrastructure, both located on and near the property, is to be funded by the developer, Pillsbury Real Estate Development. As time goes on, maintenance costs for the department are expected to increase, and they may need additional staff. Those impacts may occur in around three years. 

The water department is somewhat unique among divisions of the city in terms of its broad independence. It’s created by city ordinance, and Ward 1 Councilor Bruce Cheney said Thursday he would like to review ordinances pertaining to Laconia Water Works.

He’s asked for an agenda item to be included at the next council meeting, and intends to make the case councilors should send the discussion to review by their subcommittee on government operations and ordinances. 

The relationship between the city council and the water department commission is similar to that between the council and the police commission — the commissions have broad authority to manage the day-to-day affairs of their related departments, but must request funding in unique or emergent circumstances from the council.

“In the short term, it’s out of the council’s hands,” Cheney said. “I’m just concerned that there may be a better way to deal with issues like this.”

For example, if a freak accident or disaster damaged $5 million of water department infrastructure or equipment, they could use the $2 million they’ve got in the bank, and request the remainder in the form of a bond from the city council. 

“I intend to propose it,” Cheney said. “I don’t know what the balance of the city council will think.

“I think the time has come.”