Residents Brace for Arrival of Hefty Water Bills

Trips to the mailbox have always been fraught with anxiety for homeowners around the time that property tax bills are due to arrive.

This month, Tewksbury residents are bracing for another traumatic delivery – the new water and sewer bills.

Over the summer, faced with a $700,000 water enterprise fund deficit and $119 million debt from major infrastructure improvements, the Board of Selectmen reluctantly took the step of implementing the largest water and sewer rate increases in town history.

Chairman Todd Johnson said he and his fellow selectmen had no desire to raise the water and sewer rates so dramatically, but that the financial realities left them no choice.

"I think the biggest misconception is that residents don't fully understand the structure of the water and the sewer operations," said Johnson, who pointed out that as taxpayers, selectmen will feel the bite of the new rates the same as everyone else. "(Residents need to be aware of) the impact of all the infrastructure improvements made over the last few years. And the reality of how those are paid for is, essentially, through the rates.

"It's not fun to bring news like that and not fun to vote these fees. The reality is we have a statutory obligation to balance the spending."

Depending upon their usage levels, residents will see an increase in their water rates of between 30 and 67 percent this year. Heavier users will see the biggest increase.  Sewer rates will rise between 15 and 27 percent. (Exact rates can be seen in the attached PDF.)

Town Manager Richard Montuori and Brian Gilbert, director of the Department of Public Works, admit that the new rates will cost homeowners several hundred dollars per year, and perhaps more, depending on usage. Tewksbury bills for water and sewer bi-annually.

"One thing that will help make (the rate increases) more gradual is that the first bill residents receive (in September) will be for five months usage," said Gilbert. "The second one will be for seven months, so that will be slightly more."

For their part, town officials say they are attempting to mitigate the rate increases by helping residents conserve water. Gilbert said that residents can pick up water conservation kits at DPW headquarters at 999 Whipple Road. These kits include a showerhead, toilet tank saver, two faucet aerators and one leak detection packet. All of which are designed to help maximize water use efficiency, said Gilbert.

Another tool that should aid in the reduction of excess water usage are new water meters, being installed throughout the town. According to Gilbert, the Water Meter Change Out program is a four-year program that will result in a complete update of the metering system. Municipal buildings, many of which had been unmetered in the past, are being included in the process, he said.

The new meters should result in more accurate billing and will help to detect leaks and inefficiencies.

Gilbert admits that since the new meters will result in more accurate readings, some homeowners may find that their actual usage is significantly higher than they anticipated.

"We have a lot of unaccounted for water usage," said Gilbert. "We'll probably catch a lot of this unaccounted for usage with the meter change out."

However, Gilbert and Montuori stressed that the town does not intend to bill retroactively for past undetected water usage.

"Absolutely not," said Montuori.

A new metering system installed at the water treatment plant should also result in greater efficiency, he said.

According to Montuori and Gilbert, the financial crisis faced by the Water and Sewer Division that has resulted in the rate increases was a long time coming. They said there are several contributing factors, including a gap of over a decade in rate increases, the $119 million in infrastructure improvements approved by voters in recent years, and a significant drop in water usage, and thus revenue, in Fiscal Year 2010. (Details can be found in the attached PDF of a presentation made by at a Board of Selectmen's meeting in June.)

"We had a major drop-off in water usage, from over 725 million (gallons) in Fiscal Year 2009 to 661 million in Fiscal Year 2010," said Montuori. "As a result, revenues were $800,000 less than the budget projections."

The drop-off can be blamed on a rainy summer that year, he said. Similarly, there was a $700,000 shortfall in projected revenues from sewer usage in FY '10.

But the budget shortfall is just one reason for the rate increases. In 2003, voters approved a project to extend the sewer line to 100 percent of the town. The plan voters approved, said Montuori, had the project paid for completely through rate increases. The total cost of the project is roughly $100 million.

In addition, voters have approved a series of capital improvements to the water system over the past eight years. These have included upgrades to the treatment plant, new water tanks, the meter replacements and improvements to the line itself. The total cost of these projects is roughly $19.1 milion.

As a result, a large portion of the water and sewer budgets is debt service, said Montuori.

"Over $2 million of the water budget in Fiscal Year 2010 was debt service, that's 36 percent of the budget," he explained. "It's 38 percent, almost $2.3 million, for Fiscal Year 2011."

The debt service in the sewer budget is an  even bigger burden because of the sewer extension project. According to Montuori, debt service was 69 percent of the sewer budget in Fiscal Year 2010 ($6,057,603) and is 76 percent of the current budget for Fiscal year 2011, which began July 1 ($7,234,255).

"We're going to be paying for this for a long time," Montuori warned. "The debt service on the project will peak in 2021 at $8.7 million."

"I liken it to using a credit card," said Johnson "We borrowed money. Now the 'credit card bill' is coming due and the minimum payment went way up.

Given that, Montuori was brutally honest in talking about sewer rates in years to come. While the water rates may stabilize, he said, sewer rates will continue to rise out of necessity.

"The rates will likely go up 25 percent in Fiscal Year 2012 and another 25 percent in Fiscal Year 2013 to cover the cost of the debt," he said.

In the meantime, Montuori said, he is working with his department heads, including Gilbert, to try and find budget savings, in order to mitigate the increased costs from water and sewer. Recently, Montuori recommended that a full-time position in the water department, made vacant by a retirement, be eliminated and the hours reallocated to fill two more pressing needs. Even in replacing one position with two, a savings of more than $10,000 resulted.

The plan was approved unanimously by the Board of Selectmen.

Montuori said he understands the frustration with the dramatic rate increases and reiterated that he is willing to answer any questions residents might have. He said one thing making the increases seem that much more dramatic is that the town failed to increase water and sewer rates at all from 1991 to 2005. As a result, there was little money set aside for infrastructure improvements and rate increases to pay for those improvements seemed that much more severe.

Johnson agreed that was an issue, but was unwilling to criticize his predecessors on the Board of Selectmen.

"I think you have to put yourself in the time and place of the decisions being made," he said. "Ten years ago, we didn't have the $120 million in infrastructure improvements."