PORTSMOUTH, R.I. \u2014 The Portsmouth Water and Fire District recently announced a 9.16% increase in its operating budget for fiscal year 2021. The budget includes a $1.09 increase in each of its two-tier water rates and a 16.6% increase in the base charge for a residential meter.\n\nThe new quarterly water rates are $8.37 for the first 5,000 gallons and $11.80 for all water use over 5,000 gallons in the quarter.\n\nThe average residential customer that uses 60,000 gallons of water per year would have an annual cost of $697.77, an increase $73.73, or 11.82%, over fiscal year 2020.\n\nThe district has not increased the water rates since 2016.\n\nThe Administrative Board approved the operating budget of $4,876,682 and a total budget of $5,179,955. The district\u2019s combined operating and capital budget increased by 7.70%. The district\u2019s fiscal year began on May 1.\n\nAccording to the district, the increases are necessary to address several issues. In February of 2019, the City of Newport filed with the Rhode Island Public Utilities Commission (PUC) for a wholesale water rate increase to the district of 37% to take effect on March 15, 2019. The district intervened in the rate case to ensure that rate increases are accurate and fair to the district rate payers.\n\nThe parties executed a settlement agreement which was approved by the PUC on Oct. 18, 2019 and then revised on Nov. 7, 2019.\n\nThe final rate increase determined by PUC for the district was 16%. The rate went into effect on December 1, 2019.\n\nAlso, due to the increasing age of the distribution system, there has been an upward trend in the cost of system repairs and upgrades. These upgrades include the new Union Street Pump Station, which will be completed this spring.\n\nAdministrative Board Chairman Philip Driscoll said that the water rate increases are necessary to maintain a balanced budget while funding the district\u2019s operating costs, technology improvements, capital improvements and debt service.\n\nIn addition, Mr. Driscoll said that the Administrative Board has put an emphasis on increased leak detection to reduce lost water.\n\nThe District will set the tax rate this fall. The tax rate will be determined once the updated assessments are reviewed. Property tax revenue accounts for approximately 14.0% of the district\u2019s total revenue.\n\nThe use of its taxing authority allows the District to issue general obligation bonds, which offer a more favorable interest rate than revenue bonds, when funding capital projects.\n\nLast fiscal year, the District was assigned an AA- long term rating, which is extremely favorable for an entity of its size. The AA- long term rating allows the District additional debt service savings versus borrowing with no rating.\n\nMr. Driscoll said that the board is working hard to properly maintain and improve the water system, while providing fair and reasonable rates for customers and taxpayers.\n\nMr. Driscoll also said that the board will continue to ensure that the cost it pays for wholesale water is fair and reasonable by working with Newport Water and intervening in Newport rate filings before the PUC, as necessary.