City Treasurer Rory Casey discusses the Sewer Enterprise Supplemental Budget for fiscal year 2026 at the City Council’s Dec. 2 meeting.
Photo credit: Holyoke Media
HOLYOKE — During the Dec. 2 City Council meeting, the council discussed another budget concern; a potential sewer increase for residents.
With the deficit at approximately $1.2 million, Mayor Joshua Garcia said that the city needs an updated sewer rate or else the deficit will likely persist.
Former City Auditor Tanya Wdowiak submitted the fiscal year 2026 Sewer Enterprise Supplemental Budget as well as the general fund and sewer enterprise fund year-to-date expense reports.
In a letter from Garcia to the City Council, he stated that Holyoke began the year with more than $1.5 million in excess capacity due to conservative budgeting and new growth.
At the City Council meeting on Nov. 18, the council voted to adopt the supplemental budget, which increased the amount further.
Garcia explained that excess capacity is the amount of tax revenue that could be raised, and the city chose not to levy. Maintaining excess capacity is a sign of fiscal health, according to Garcia.
“Unfortunately, the entire amount of excess capacity has now been reduced to effectively ‘0,’” Garcia said. “This is the result of taxpayers once again being asked to subsidize the Wastewater Enterprise Fund due to our unstable sewer rate.”
The budget plan before the City Council is fully balanced without drawing from reserves, but it does come with a cost to taxpayers.
Garcia said the city executed a new contract that will lower its expenses.
“Without this contract, we would be forced to identify other funding sources to cover the gap,” he said.
In September, the city of Holyoke hosted a press conference to discuss a new 10-year contract between the city and Veolia North America.
The new contract emphasizes energy recovery, economic development, investment in the existing infrastructure and incentives for Veolia to work with the city to identify new revenue sources.
The renewed partnership with Veolia allows them to continue to operate Holyoke’s wastewater treatment plant for the city, providing high standards of environmental security and professional operation.
Veolia will continue operations and management of the conventionally activated sludge plant, capable of treating as much as 17.5 million gallons of wastewater each day. Veolia will also continue to maintain 40 miles of dedicated sewer mains and 77 miles of combined sewer and stormwater mains.
Veolia’s modernization initiatives will provide the capacity for it to grow and generate revenue while advancing Holyoke’s efforts to protect the Connecticut River.
In his letter, Garcia urged the City Council to consider establishing a new sewer rate for FY27 and set a sustainable rate that will protect the long-term health of the enterprise fund. The hope is that the new rate would allow the city to invest in critical infrastructure while reducing the burden on taxpayers.
City Treasurer Rory Casey said the current sewer rate is 7.50 per 1,000 gallons used. That rate was set in 2021 and was the first increase since 2008.
“Because the cost of operating the sewer system increases each year while the rate has stayed the same, we end up with a structural deficit,” Casey said. “The state requires municipalities to close these deficits before setting a tax rate. This year it added $1.2 million to the tax levy, which will be paid by property owners, including those on septic systems who do not receive a sewer bill. This is why every mayor since 2008, when the rate setting authority was granted to the City Council, has requested a sustainable rate that would increase gradually over time.”
Casey also stated that the he and the city expect the City Council to receive a new rate proposal before the FY27 budget is finalized in late spring.
The City Council approved to receive and adopt the contract. No official vote was made on a new sewer rate for FY27.
The net change went from about $9.2 million, which was approved by the City Council in June, to an operating budget of $8 million.
