PATERSON, NJ — The Paterson City Council voted to dismantle the current sewer fee structure at its meeting on Feb. 9, signaling what might be the end of a strategy that switched billing from a flat rate for households to a system based on water volume usage.
Before Mayor André Sayegh’s administration implemented the changes in 2019, Paterson spent $18 million on sewer operations and generated $12.5 million in revenue. According to Javier Silva, the city’s chief financial officer, the new approach helped close the deficit while increasing residents’ sewer bills by an estimated 32 percent.
“I believe that this is the most equitable way to do it because you’re paying what you’re using,” Silva said.
The plan, which the city council voted 8-1 to repeal, also established ordinances for a municipal sewer utility that enabled the fee revenue—not Paterson’s operational budget—to shrink the sewer deficit and a one-time charge on all sewage system users that raised $3 million. In exchange for replacing the $224 annual sewer fee on houses and introducing the ordinances, the state granted Paterson $2 million in transitional aid.
Silva explained that commercial and industrial facilities’ sewer bills were always measured with their water volume usage, but the one-time charges imposed by the city raised their bills by roughly 40 percent. Homes and businesses faced different fees depending on the size of their water meters.
But Second Ward Councilmember Shahin Khalique, who joined the vote to terminate the existing fee system, indicated that his constituents encountered severe bill hikes that they were unable to afford, an outcome he never expected when the plan was first pitched.
“Basically, what [the Sayegh administration] said is most of the nonprofits would take the burden,” Khalique said. “And…the residents of the City of Paterson will have almost the same billing, or some of the residents’ bills will go down if we create a utility.”
Khalique described hearing from residents whose bills allegedly rose as much as 500 percent and claimed that the city miscalculated the sewer fee for one of his properties by more than $1,000. He voted against the ordinance on one-time charges in 2019 despite approving the water volume billing method and the sewer utility at the time, calling it a form of “double taxation.”
Silva acknowledged other errors including inconsistencies with billing addresses and overinflated water usage numbers resulting from leaks.
If the city council formally undoes the sewer fee system with a second vote at its meeting on Feb. 23, Paterson must repay the $2 million in state aid that it received, officials have said. To finance the operational deficit moving forward, Silva anticipated a rise in property taxes of around $240 per year for the average home, and up to $500 for other buildings depending on their assessed value.
The Sayegh administration will likely need to draft another sewer billing proposal for the council to authorize in the months ahead. To alleviate the burden on property taxes, Khalique suggested reworking the flat rate for residents and eliminating the reliance on water volume usage to determine their annual fees.
“If you spread it out to everybody, I mean it could be like $50, $60, $70, $80 [more] a year to the residents, I don’t think anybody would complain,” Khalique said. “Instead of that, right now some of the residents pay thousands of dollars in sewer fees a year more, which is unbearable to them.”