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Revere proposes 9.7% water and sewer rate increase to restore enterprise fund sustainability
Summary
CFO Rich Vasquez told the subcommittee the city proposes a 9.7% increase to water and sewer rates for FY2026 to stop relying on one-time funds used over the past three years and to cover operating and debt costs in the enterprise fund.
Revere City's administration proposed a 9.7% increase in water and sewer rates for fiscal year 2026 during the Ways and Means Subcommittee hearing on June 5, saying the change is needed to cover the enterprise fund's operating costs without continued use of one-time revenue.
Chief Financial Officer Rich Vasquez told the committee the water and sewer enterprise has relied on one-time sources — including roughly $2.5 million in prior ARPA support and other reserves — to stabilize rates in recent years. "For fiscal year 2026, it's proposed that the city increase its water and sewer rates by 9.7% to cover all the costs of running the, enterprise fund without using onetime revenues," Vasquez said.
Why it matters: enterprise rates directly affect residential and commercial utility bills and are legally distinct from the general fund. The city said the proposed increase is intended to restore parity between revenues and expenses after using reserves to smooth prior rate changes.
Details cited by the CFO and staff: - Total enterprise fund revenue expected: about $36.3 million (majority from water and sewer rates). - The city used about $9 million of one-time revenue over the last three years to stabilize rates; the 9.7% increase aims to avoid further one-time reliance. - The proposed FY2026 budget includes a $500,000 reserve contingency in case the increase does not yield the expected revenue after state Department of Revenue review.
Councilor McKenna asked whether consulting firm CDM Smith will continue to be used on water and sewer renovations and whether the city will perform more work in-house. CFO Vasquez deferred technical details to the public works and engineering staff and noted the city has not been signed off on a consent decree; he said department staff met with the DEP recently and will provide additional detail in departmental hearings.
Engineering and water department staff will present more specific project-level plans and the schedule for consent-decree work in subsequent meetings. The administration said a multiyear rate strategy analysis will be prepared in FY2026 to guide future rate adjustments.
Ending: The proposed 9.7% increase will be considered with a detailed multi-year rate study and department-level briefings; Rates are subject to the Department of Revenue's final review when the city sets the FY2026 tax rate.
