New Rate Structure: Cape May Housing Hit with Huge Water Bill

CAPE MAY — Cape May Housing Authority has been hit hard by the city’s new water rates with its first quarter water and sewer bill jumping from $7,484 last year to $24,311 this year.
Housing Authority Chairman Joe Fox approached City Council at a May 18 meeting. He projected the housing projects water bill will increase from $68,000 in 2009 to $102,000 this year.
“The government doesn’t allow any slack for this sort of thing, they’re not going to increase our subsidy,” said Fox. “Some would say ‘raise the rents,” but we can’t do that because we are under a federal formula, we’re locked in.”
Fox said the housing authority was losing its executive director after managing five years with a part time director. He said a new director “will cost money.”
City Council adopted a new water/sewer billing formula March 2 that was described to be more palatable for low volume water users.
Fox said the city needed to adjust the bulk water rates for the housing authority. The authority’s total budget including rentals and a federal subsidy totals about $700,000 annually, he said.
According to the rules of the U.S. Department of Housing Urban and Development (HUD) the housing authority can mix capital improvement funds with expense money, said Fox.
He said crews have been replacing bathrooms in the housing units using $140,000 in Obama Administration recovery funding along with $60,000 of the authority’s money.
All roofing has also been replaced. Fox said the authority wanted to begin remodeling the housing project’s 1960s era kitchens.
With the high water bills and hiring a new director, he said the authority would have to use its capital improvement funds for regular expenses.
Fox said he was afraid the authority would regress to what it was 10 to 12 years ago with unkempt lawns and broken fences. He said he has served on the authority for 15 years.
“The last 10 years we have become a high performing housing agency,” he said.
He said feedback from residents indicated the appearance of the property has improved and the police are happier with the situation at the units.
Fox the authority varied between 45 to 70 people on a waiting list.
The authority contributes $5,000 per year to Cape May Elementary School and does a payment-in-lieu of taxes to the city yearly, he said. Fox said without relief from the city’s water bills, in a year or so, the financial situation at the housing authority would be “untenable.”
Mayor Edward J. Mahaney Jr. said the housing authority was using water at the rate of a beachfront hotel. Fox said the housing project has 85 units.
Mahaney said the authority used an additional 30,000 gallons of water in the first billing period of this year over last year’s figure. The mayor called for a meeting with Fox and City Manager Bruce MacLeod to determine the cause of the increased water consumption.
Mahaney questioned if there were any leaks at the housing following the cold winter. Fox said the authority has used about 900,000 gallons annually over the past three years.
Mahaney said the authority would likely exceed 1 million gallons in water usage this year.
Fox said new bathrooms have low flow showerheads and the authority did not water its lawns.
“In the long run, it would be a determent for the city not to support the public housing here,” he said.
“We agree with you,” said Mahaney.