Water bills for Hazleton City Authority customers will increase by 65% starting Saturday.
The authority board voted 3-2 to approve the hike Tuesday after a meeting marked by arguments over infrastructure costs, public participation and plans to pay almost half the increased revenues to Hazleton.
The city plans to use the money to cut taxes for its homeowners.
The increase applies to all residential, commercial and municipal customers in the city and parts of 13 other municipalities served by the regional water system, but they won't get the same tax benefits.
Board chairman Joseph Zeller and board members Patrick Fay and Peter Andrasko voted in favor. Board members John Keegan and Michael DeCosmo Jr. voted no.
Burkhardt outlines pressures to raise rates
Authority director of operations Scott Burkhardt said the authority invested about $35 million in system upgrades the past five years. The authority replaced aging water mains, increased storage capacity and upgraded pump stations, wells, treatment facilities and other infrastructure.
Burkhardt said the authority financed many projects through low-interest Pennsylvania Infrastructure Investment Authority, or PENNVEST, loans. He said the authority’s monthly PENNVEST payments increased from about $50,000 to about $500,000 as loan payments came due.
“There are a lot of factors that go into the rate increase,” Burkhardt told meeting attendees. “It’s not just that the water authority wants to raise rates.”
Burkhardt pointed to about $19 million spent replacing several miles of water mains and hundreds of service connections along state Route 940. He said aging pipes there leaked 300,000 gallons of water daily before the project.
He also cited upgrades involving the filtration plant, the Mount Pleasant water tank, reservoirs, pumps, source-water facilities and infrastructure needed to draw additional water from the Lehigh River.
Burkhardt said the authority accelerated implementation of its long-range improvement plan because of regional development, industrial obligations and increased demand.
“We aren’t adding services, per se,” Burkhardt said. “Most of this is maintenance of this operation, plus obligations we have.”
Burkhardt also warned Saturday’s increase might not be the last. Smaller increases could be considered as future filtration, reservoir and source-water projects proceed.
Approximately $34 million will go to the city
As part of the increase, the authority approved an agreement that will pay Hazleton about $3.4 million a year for the next 10 years.
During the meeting, officials said that represents about 30.5 percentage points of the 65% increase. The remainder is intended for infrastructure expenses, debt service and other authority obligations.
Keegan, the board vice-chairman, argued the agreement unfairly burdens customers outside Hazleton.
“This agency is not an agency of the City of Hazleton,” Keegan said. “This is an independent agency of the Commonwealth of Pennsylvania.”
The authority serves customers in Hazleton and all or part of 13 surrounding municipalities in three counties.
Keegan said customers outside the city would finance a payment that will directly benefit only Hazleton residents.
“The city has a political problem, not a monetary problem,” Keegan said. “They don’t want to raise taxes. They want us to hide it in our rates.”
City promises tax relief and paving
Hazleton City Council President Jim Perry acknowledged the payment will benefit only city homeowners, but defended the agreement during the meeting.
Perry said the city will use the money to finance a proposed homestead tax exemption that will cut taxes for Hazleton homeowners. He said about $1 million could be dedicated to street paving, with other revenue buying vehicles and covering capital projects.
Perry estimated a water bill of about $25 could increase to about $41 under the new rates, depending on usage. He said city homeowners could eventually receive see about $500 in lower property taxes.
Questions over public comment
Public participation became another major point of contention.
The meeting agenda scheduled public comment on agenda items at the beginning of the meeting with another public comment period after the agenda is completed.
City resident Ashley Bahrt repeatedly objected that virtual participants had not received a meaningful opportunity to comment before the votes. Bahrt said people were being muted and asked why the authority would vote on the rate increase before hearing additional public concerns.
Authority solicitor Jeff Rockman responded that public comment had been offered at the beginning of the meeting and said the authority complied with Pennsylvania’s Sunshine Act.
Hazleton resident David Dominguez questioned whether the authority adequately examined the consequences of such a large increase and criticized what he described as a lack of prior public discussion, studies and explanation.
'What additional services are customers receiving?'
Hazleton resident Betsy Durso, speaking after the vote, asked what additional services customers would receive in exchange for paying 65% more.
Burkhardt answered the increase was not primarily intended to add new household services. He said it would support maintenance, debt repayment, water-quality testing, system reliability, fire protection and infrastructure improvements needed to maintain existing service.
Burkhardt said the authority went about 11 years without a hike.
Residents fear higher rents and household costs
Rossanna Gabriel warned the increase could hurt renters and lower-income households.
Gabriel, executive director of the Hazleton Integration Project, said landlords may raise rents to cover the increase. Already financially struggling households could be forced to absorb higher costs as city property owners see lower taxes, she said.
Gabriel questioned whether the agreement would solve one city financial problem while creating more hardship for residents.
Burkhardt responded developers must disclose estimated water usage before receiving service commitments. He said projects requiring more than 50,000 gallons a day may be denied more water until system upgrades are completed.
Burkhardt said new developments also pay tap-on fees, capacity charges and the cost of certain system connections. Larger commercial customers pay rates based partly on meter size and usage.
Packer Township resident raises hydrant concerns
Paul Gray, a Packer Township resident and volunteer firefighter, raised concerns about the safety and accessibility of a township hydrant.
Gray said fire crews could not safely use the hydrant because of unusually high water pressure. He questioned why township taxpayers were charged for hydrants while some hydrants associated with other authority projects appeared to be included through project funding.
Authority representatives said the matter involved legal and technical questions and agreed to address it separately with township and fire officials.
Increase extends beyond Hazleton
While much of Tuesday’s debate focused on city taxes and Hazleton’s finances, Packer Township Supervisor Sue Ann Gerhard argued her constituents should not pay more for the same service.
"Shame on you," she told authority board members who voted yes.
The next authority board meeting is scheduled for Tuesday at 5 p.m.
