Andover Townsman, Andover, MA

May 22, 2013

Water-sewer rate hike proposal raises ire

Selectmen object to town manager's water, sewer changes

By Bill Kirk
bkirk@andovertownsman.com

---- — A proposed 8 percent hike in the sewer rate, plus a 2.5 percent water rate increase, hit a bump in the road Monday night.

The Board of Selectmen challenged Town Manager Buzz Stapczynski’s proposal, with Chairman Alex Vispoli vowing in scolding remarks that he would vote against the measure.

Vispoli argued the town manager should have brought the proposed rate hikes to selectmen prior to Town Meeting’s approval of the fiscal 2014 operating budget earlier this month. The rate hikes are already built into the budget, he said.

“I don’t understand why we’re having this conversation after Town Meeting,” Vispoli told Stapczynski during this week’s Board of Selectmen meeting. “This should have happened last fall. I told you this last year. What is the plan? This is a replay of that conversation. ... I’m going to vote against both increases.”

Stapczynski attempted to defend himself, saying, “I think we have a plan. We were in the crush of Town Meeting. We had a $157 million budget. This is one component of that.”

Vispoli countered that Stapczynski was using that as an “excuse,” to which the town manager replied, several times, “we’ll do better” next year.

The discussion came during the first reading of the proposed rate increases. Selectmen, who also serve as the town’s water and sewer commission, will take up the matter again at their next meeting June 3.

Under the proposal, water rates would rise from $2.92 per 100 cubic feet (about 750 gallons) to $2.99. That would translate to an increase of about $8 for the average water customer who uses about 11,265 cubic feet per year. This year’s average bill of $324 would increase almost $332 under the town manager’s proposal.

Sewer users, meanwhile, would see the rate go up by 8 percent, meaning the typical bill would rise from about $356 to $385 a year, a jump of nearly $29.

Rate hikes would continue over the next five years, based on a proposed schedule of increases presented by Stapczynski.

Water rates have not risen in four years and sewer rates have been kept level for the last two years.

In explaining why the hikes are now necessary, Stapczynski told selectmen the town needs to beef up its water and sewer financial reserves to 20 percent,

Without a rate increase, he said, “we’ll eat into the reserve in a dangerous manner.”

On Tuesday, he added that the reserve is needed because of the fluctuations in water and sewer revenues and expenses from one year to the next.

“In a wet year, people use less water because they irrigate less, which means less revenue,” he said. “If it’s a dry year, there’s more irrigation, so we sell more water and make more revenue.”

But costs also fluctuate, he said. “This (the reserves) are used in the event of a catastrophic emergency of some sort — a huge water main break or a problem in some part of town.”

Acting public works director Chris Cronin said water break fixes can cost from $12,000 to $20,000 a job.

“We’ve had an awful lot of them over the last year,” he added.

The increase is also needed to cover rising costs in the departments. The water department has about 22 employees and a budget of $6.5 million while the sewer department has four employees and a budget of $5.4 million. Both budgets include salaries, operational expenses, debt service and other costs. The sewer budget includes an estimated $1.6 million payment to the Greater Lawrence Sanitary District.

Despite the proposed hikes, selectmen wondered how the water and sewer rates would still be among the lowest for communities of comparable size.

According to statistics provided by the town manager’s office, even with the increases, Andover’s ratepayers would still pay less than Lawrence, North Andover and Wilmington. Water users in Andover pay more than those in Methuen and Haverhill, however.

The sewer rate increase would put Andover in third place locally behind Methuen and Lawrence ratepayers. Among comparable cities and towns, Andover would be in fourth place behind Winchester, Burlington and Billerica.

Selectman Dan Kowalski said he was concerned that Andover wasn’t being aggressive enough in its water and sewer rates, particularly since North Reading, which currently purchases water from Andover for some of its homes and businesses, could soon be joining the Massachusetts Water Resources Authority, which means Andover would lose a significant revenue stream.

“When we lose North Reading, we are going to see a huge rate increase,” Kowalski said. “We need a strategy.”

But Stapczynski said North Reading’s switch to the MWRA is at least five years away and would come with a considerable cost in infrastructure improvement.

Kowalski also noted that North Reading makes money off of Andover, buying water at the current rate of $2.92 per 100 cubic feet and selling it to its users for $5.04.

“They are making $1 million on us,” he said, adding that makes it less likely they would switch suppliers because they would lose that revenue source.

Added Selectman Paul Salafia, “If they are making money on us, why would they change?”

On Tuesday, Stapczynski said that in the future, water and sewer rates would be set before Town Meeting.

“We have, over the last three months, built a good water and sewer spreadsheet,” he said, commending Budget and Finance Director Donna Walsh’s work on the effort. “It’s better than what we had previously so it will be easier to do this in advance.”

For now, however, the rates need to increase or the town budgets will be out of balance, Stapczynski said. He is hopeful that he can convince selectmen.

“I’m recommending the rate increases based on solid, justifiable information and solid budget information I presented,” he said.