Published in the June 23, 2016 edition
By BOB TUROSZ
NORTH READING – Water rates will increase 6 percent in fiscal 2017, the Selectmen voted last week.
The Board of Selectmen voted unanimously to approve the requested rate hike based on the recommendation of Water Superintendent Mark Clark and members of the Water Commission. Town Administrator Michael Gilleberto said he concurred with the rate increase.
The annual increase on a typical home with “average” water usage of 90,000 gallons per year will be $55 a year, (basically $13.74 per quarter).
North Reading has a tiered water rate system, based on low, average and high water usage per quarter. With the 6 percent increase voted last week the new rates will be:
• Tier one “low” users (those who use less than 10,000 gallons per quarter), will pay a rate of $8.56 per one thousand gallons.
• Tier two “average” users (those who use up to 22,500 gallons per quarter) will pay a rate of $12.56 per one thousand gallons.
• Tier three “high” volume users (those who use more than 25,000 gallons per quarter) will pay $17.12 per one thousand gallons.
When Selectmen set the water rates, they typically say they’re effective for fiscal 2017, which starts July 1. But the actual starting date of the bills will be the last time a customer’s water meter was read and these dates vary. So the next quarterly bills that go out will be dated on or about Aug. 15, but the meter readings for that will start about July 1. There will be some people whose meters were read in early April who will be billed in early July. They will be billed based on these new rates established last week.
This proved to be somewhat confusing when the water rates went out last year but it’s how the water rates have been set for over 20 years. Any bill issued on July 1 is at the new rate dating back to the last meter reading.
Clark was pleased to report the Water Department has paid back $530,000 that was borrowed from various reserve funds. The funds were borrowed from fiscal 2008 to 2011 when the water rates were insufficient. “I am happy to say that money has been paid back,” said Clark.
The Water Department budget that was passed at Town Meeting June 6 was predicated on a 3 percent increase over the budget for the present fiscal year, Clark said. Based on that and the fact the town is going to the MWRA in 2019 led to the recommendation for the 6 percent increase this year, he added.
“We’ve shown in past years the need to raise money to have our rates sufficiently capture revenue to make that transition to MWRA,” he added.
Water Commission member Vincent Ragucci said they concur with the 6 percent recommendation and they would consider a new water rate study within the next year that will look at different tiered water rate options going forward. This could benefit those consumers who use water the least, he said.
Clark said the budget is in a “fairly good” position for the present fiscal year. The water rates were established with the thought of generating a yearly surplus of about $100,000 that can be carried forward and this target has been met.
Last year was fairly dry, which meant the town sold a lot of water and the projection is that town sold enough water to generate retained earnings of $207,742 for fiscal 2016. “We try to be conservative in our projections and not (count on) selling a lot of water. But this past year was fairly dry, which is good for the water budget.”
In response to questions, Clark said the request for a 6 percent water rate hike is based on a long term need to get where they need to be in order to handle the water system capital improvement costs that are coming up and the “buy-in” for the MWRA, plus operating and maintaining the existing system for where they need to be five years from now.
This will avoid the need for “a real sharp spike” in the water rates in 2020, he explained.
Given the future costs that are sure to be incurred over the next four or five years, Selectman Stephen O’Leary wondered why the water department isn’t asking for an 8 or 9 percent increase now.
“That’s a very fair question,” said Clark. “We’ve looked at it long term. We want to take a look at the numbers on an annual basis. We’re trying to do the best we can in maintaining credibility going forward on where we need to be.”
O’Leary agreed. “People can anticipate increases of 6 to 8 percent annually over the next four or five years. Whether we join the MWRA or not, we’ll still see those types of increases based on our contract with Andover and our capital improvement needs. I just don’t want to short change the Water Department.”
Clark thanked O’Leary and the board for their support.
In the future there will be a water meter replacement program and communication with the public will be the key to successful implementation.
“We’re going to tell them when we’re going to be at their house, what’s going to take place,” he said.
Other business
In unrelated business, the board voted unanimously to appoint Julie Koepke and Michael Connelly as school department representatives to the Capital Improvement Planning Committee. Koepke is a member of the school committee and Connelly is school business manager.
Also appointed to the CIPC was Abby Hurlbut as Finance Committee representative.
The board also voted to approve a 3 percent budget transfer of $20,000 for the water budget. The transfer was from the personal services account to the expense account for fiscal year 2016.
Gilleberto said the funds transfer was approved by the Finance Committee and account for the purchase of water from the town of Andover.
