NORTH READING – The town managers of North Reading and Andover will meet to try to settle a long simmering dispute between the two towns over water rates that prompted at least one Andover Selectman to threaten to shut off North Reading’s water supply from its neighbor to the north.

North Reading Town Administrator Michael Gilleberto and Andover’s Buzz Stapczynski will meet to discuss the rate dispute which has been brewing for a couple of years but recently heated up when Andover unexpectedly jacked up the water rate it charges North Reading.

For over 20 years North Reading has purchased about 300 million gallons of water per year from Andover worth about $1.5 million per year but the contract expired in March 2011 and negotiations for a renewal agreement lagged. In March of this year, North Reading Selectmen thought they had a deal with Andover to renew the agreement at a price of $3 per 100 cubic feet and went so far to inform Andover this rate was accepted. North Reading then felt blindsided when Andover Selectmen voted in April to establish a special rate only for North Reading of $3.41 per 100 cubic feet, a price that would create huge deficits in North Reading’s water department budget.

Through the wonders of modern technology, North Reading and Andover Selectmen are now watching each other’s meetings on television or live streamed on computers. After viewing the last Andover meeting, North Reading’s Chairman Robert Mauceri reported that Andover is particularly irked North Reading refuses to pay an extra $85,000 resulting from the higher rate Andover put into effect on May 1. At least one Andover Selectman suggested shutting off North Reading’s water but that idea didn’t go very far, Mauceri said. Another Andoverite suggested lien procedures but North Reading doesn’t own any property in that town.

Gilleberto agreed to meet with Stapczynski to try to reach a solution. Mauceri commented it’s probably a good thing the two boards can watch each other’s meetings so they know exactly what is being said, which eliminates the possibility of misunderstandings. For the last month or so, when the North Reading Board has been talking about the contract dispute, it has felt at times they are talking directly through the camera to those in Andover.

Playing a background role in the dispute is the open interest North Reading has shown in hooking up to the MWRA for its water supply in the future. There’s suspicion in North Reading that was the reason Andover established a North Reading–only water rate 10 percent higher than they charge their own residents ($3.10).

Mauceri said Andover was asked if they would be interested in supplying all of North Reading’s water “and the response was that they would have to make some improvements in their infrastructure. Some of their board members cynically thought we were just using that to leverage the MWRA without knowing how the MWRA works. They kind of discounted that all together,” Mauceri said.

What really surprised Mauceri, he said, was Andover’s proposal to work on a five-year contract at a “significantly higher” rate per 100 cubic feet.

The bottom line is that North Reading Selectmen basically gave Gilleberto direction they are interested in a five year renewal of the Andover contract at the same rate Andover residents pay, which is $3.10 per 1,000 gallons. Mauceri pointed out Andover also supplies water to Merrimack College and he suspects it’s at the residential rate. “We should be treated the same.”

Selectman Jeff Yull noted Andover has never explained why it imposed such a high rate on North Reading only. “It seems to me to be arbitrary,” Yull said.

“It’s a penalty,” Mauceri responded.

“With respect to being a customer, we’re supporting a larger percentage of their water department overhead than other users, because they don’t maintain the water mains in North Reading, they don’t have to read the meters and send out the bills. Their water superintendent also said during the meeting that the cost of producing 100 cubic feet of water is just under $2 per 100 cubic feet.”

The price Andover wants to charge North Reading represents a 70 percent markup.

“They’re building up their reserves,” said Selectman Stephen O’Leary. “They should go back and recalculate their costs if they lose a good customer. What are we really worth to them? If and when we go away, what will be their cost of production then?” he asked.

O’Leary remembers when the intermunicipal agreement between the two towns was hammered out about 24 years ago and said Andover has been very helpful to North Reading over the years.

“Let’s see if we can work with them over a period of time.” But, he added, what Andover has proposed is “far in excess and basically a penalty for our anticipated exit” should North Reading decide to hook up to the MWRA.

“We’ve had lots of discussions (with the MWRA) but we haven’t pulled the trigger yet. All they’re doing in my mind is pushing us more quickly to make a decision,” O’Leary said.

The best sound bite of the evening came from Selectman Mike Prisco, who said: “I don’t think we should flush our relationship down the toilet over this one issue but we certainly need to work on it.”

Selectman Joe Foti said their job is to advocate to find the best deal for the taxpayers of North Reading. “I’ll refuse to subsidize the ratepayers in another community on the backs of our ratepayers.”