PEABODY — After nearly six hours of public comment, debate, and deliberation, the City Council voted Tuesday night to approve a $200 annual trash fee and an 8% increase to water and sewer rates, measures city officials say are needed to address growing financial pressures.

The votes followed a marathon meeting that stretched from 6 p.m. until just shy of midnight and featured extensive discussion among Mayor Ted Bettencourt, councilors, and residents about Peabody’s financial future.

Trash Fee

Bettencourt described the trash fee as a last resort, once again pointing to rising costs, such as increasing health insurance expenses and the limitations of Proposition 2 ½, as major factors behind the proposal.

Much of the evening’s discussion centered on whether the city had exhausted all other options before proposing a new fee. Residents questioned municipal spending, suggested alternative revenue sources, and urged officials to further explore a pay-as-you-throw model before moving forward.

Most councilors argued that the city needed to take action now to avoid deeper financial challenges in the years ahead. Those on the Finance Subcommittee spoke and voted first.

Several councilors — Subcommittee Chair and Ward 3 Councilor Stephanie Peach, Ward 4 Councilor Julie Daigle, Ward 5 Councilor Dave Gamache, and Councilor-at-Large Jon Turco — acknowledged their discomfort with the proposal while expressing a greater concern about the city’s long-term finances.

“(The trash fee is) a revenue-generating account that would almost immediately put us in a better situation financially as a city,” Turco said.

Daigle added that she couldn’t confidently vote against the trash fee unless there was another solution present, and she didn’t see any other viable option.

The sole opponent on the Subcommittee, Councilor-at-Large Anne Manning Martin, argued that the proposal should be revisited after the Council reviews the FY27 budget. Budget meetings are scheduled for June 16, June 18, June 23, and June 25.

“I don’t think there’s any harm at all in sending this back to the mayor’s desk. It’ll show goodwill to the residents that we listen to them… and we know that they’re not a bottomless pit of money that we can run to every time we’re in a jam because we made poor decisions,” Manning Martin said.

Her motion to put the ordinance back on the mayor’s desk failed 1-4.

Peach, as she sets the Finance schedules, maintained that the city needs a clearer picture of anticipated revenues before budget deliberations begin.

“This is kind of a chicken and the egg thing,” Peach said, “because if this does not pass this evening, those numbers in the budget change.”

The Subcommittee voted 4-1 in favor of the proposed trash fee; Manning Martin was the vote against.

When this issue was brought to the full Council, it passed with a vote of 8-2. Ward 2 Councilor Wendy Lattof and Councilor-at-Large Jaclyn Corriveau voted against it; Manning Martin was no longer present.

The language behind the fee states that it would take effect July 1 and be billed semiannually, though city finance officials would have the option of quarterly billing.

Several amendments were added before the ordinance advanced.

The final version includes a $100 discount for owner-occupied residents age 65 and older, a $100 discount for veterans residing in owner-occupied homes, and a $100 discount for residents who maintain a compost pickup contract.

The ordinance also allows residents who qualify for existing city tax abatements to apply those abatements to the fee, provides credits for vacant units, and exempts residents who use a licensed, private trash hauler.

Councilors, per the mayor’s suggestion, additionally approved language freezing the fee at $200 through June 30, 2031.

According to Bettencourt, the fee will apply to approximately 14,000 households and generate an estimated $2.4 million annually. Those 14,000 households solely include single-family, two-family, and three-family homes.

Water and Sewer Rates

The Subcommittee and later the Council also voted favorably to advance water and sewer rate increases.

City officials said the increase is primarily tied to drought conditions that have forced Peabody to purchase more expensive water from the Massachusetts Water Resources Authority.

Bettencourt explained that, while the city draws water from two sources, drought restrictions have limited withdrawals from the Ipswich River watershed, increasing reliance on MWRA water.

This time around, the public comment actually included some residents speaking favorably about both Gingras’s presentation skills and the proposal.

“I would ask Councilor Gamache to not fall off his chair. I am in support of this,” one resident joked.

The proposal approved by councilors includes an 8% increase in water and sewer rates beginning July 1. Additionally, an administrative fee of $25 per quarter will be applied to all residential accounts; commercial accounts will be charged $50 per quarter.

Councilors also amended the proposal to limit future scheduled increases, reducing the plan from an 8% increase followed by two consecutive 5% increases to an 8% increase followed by a single 5% increase through fiscal year 2028.

Another amendment preserved the city’s existing 10% early-payment discount after several councilors voiced agreement with the residents who asked for this incentive to remain in place.

Officials said the increase will help stabilize the enterprise fund, cover rising operating costs, and support the city’s planned acquisition of the Rousselot property, which Bettencourt described as a long-term investment in Peabody’s water supply.