Rate Strategy for FY 2012
Massachusetts Water Resources Authority

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HOW YOUR WATER AND SEWER BILL WORKS

MWRA is a "wholesaler" to its member communities. Each community sets its own retail rates for water and sewer use by local businesses and residents. MWRA's charges ("community assessments ") typically represent about 45% of the amount that communities bill their customers. The local portion of the bill varies considerably among communities.

MWRA BOARD OF DIRECTORS APPROVES LOW RATE INCREASE CONSISTENT WITH
MULTI-YEAR STRATEGY

In recognition of the extraordinary economic difficulties that its member communities face, last year MWRA limited the FY2011 rate increase to 1.49%. This was the smallest rate increase since 1996, when MWRA rates were offset by $31.5 million in Debt Service Assistance from the Commonwealth.

In keeping with a multi-year financial strategy developed by MWRA and its Advisory Board, the plan included predictable, modest rate increases of 3.9% in fiscal years 2012 and 2013. At the Advisory Board’s recommendation, the final increase for FY2012 is 3.49%.

While the largest driver of rate increases remains the debt service on bonds for large capital projects, such as the Boston Harbor Clean-up and the modernization of the drinking water system, MWRA continues to hold down operating costs.

The FY2012 assessments reflect:

• Level operating budget for 4th consecutive year
• Use of a FY11 surplus to defease $32.5 million in debt for targeted future rate relief

These measures are expected to provide financial relief to member communities while maintaining MWRA's excellent credit rating.

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Updated July 6, 2011