Council changes mind on floating
water fund debt
BEVERLY — How do you pay off an $850,000 deficit without breaking any rules? That was the question facing the City Council last night at City Hall.
Councilors had voted at their regular meeting on Monday to transfer money from the city's sewer fund to pay off an $847,441 deficit in the water fund. But Ward 3 Councilor John Burke called for a reconsideration of that vote the next day, saying he was worried such a transfer isn't legal. That forced the council to meet again last night.
Councilors agreed to rescind their Monday vote and appear to have settled on a new way to raise the money — by increasing the water rate charged to homeowners and business.
At the same time, however, they will offset that increase by lowering the sewer rate. The bottom line is that "99.9 percent" of people will still pay the same combined water-and-sewer rate as they do now, said Finance Director John Dunn.
"The vast majority will see no difference," he said.
The only difference is that the water fund will be replenished faster to pay off the $850,000 deficit. The sewer fund will lose money, but it can absorb the loss because it has a surplus, Dunn said.
The water and sewer rates can't be changed, however, until the public gets a chance to speak. The council set a public hearing on the matter for Dec. 18 at 7 p.m. at City Hall.
Councilors discussed another possible strategy — transferring the $850,000 from the city's "free cash" account. Burke advocated that move, but other councilors were reluctant to tap into the fund, which has $1.8 million left and is used to pay unforeseen expenses.
"I much prefer to sit tight on that $1.8 million," Ward 5 Councilor Don Martin said. "It gives us a safety net."
