Massachusetts Water Resources Authority


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February 5, 1999


MWRA began its annual budget process today by asking its Board of Directors to transmit a proposed budget next week to the MWRA Advisory Board. The Advisory Board represents the 61 cities and towns served by MWRA's wastewater and water supply systems and is expected to offer its comments on MWRA's budget proposals in late April. The MWRA Board of Directors will vote on the final budget in late June.

The preliminary budget transmittal details $437.6 million in projected spending for FY2000, beginning July 1 of this year. Almost half of that amount is for payments of interest and principal on the short and long-term bonds that MWRA must issue to finance construction of new facilities required to comply with federal environmental laws and other necessary repairs and improvements to regional water and sewer systems.

MWRA Executive Director Douglas B. MacDonald said: "This is the seventh annual budget I have recommended be transmitted to the Advisory Board, and probably the toughest. The projects we have been required to build are now hitting full construction on the drinking water side of the system, as well as continuing on the wastewater system. Everyone is pleased to see a cleaner Boston Harbor and vastly improved drinking water quality. But ratepayers bear new construction costs as well as the added expense of operating and maintaining new facilities."

"This is always the time of year people ask, 'What does this mean to the ratepayer,'" said MWRA Chief Financial Officer Barbara Gottschalk. "There is no simple answer, because each of the 61 communities follows its own practice in adding local costs to the MWRA assessments before passing on the total to homeowners and businesses in local water/sewer charges." MWRA's assessments also vary from year to year among cities and towns based on variations in usage. "The preliminary numbers would translate to an increase of about 7.3% in annual water and sewer charges to communities," said Gottschalk. "This is higher than the 3.0% average MWRA has actually achieved over the last six years."

Gottschalk said the preliminary budget presentation includes $257 million for debt service, $14 million for electrical energy, $11 million for chemicals, and $23 million for processing of the sludge removed from wastewater before discharge into Boston Harbor. Sludge processing costs are expected to rise by about 33% from the current year. "We win with better treatment, but there is a price to pay," she said. Gottschalk also pointed out that MWRA has continued to reduce staffing wherever possible, projecting 41 fewer positions at the agency at the end of the coming fiscal year than at the beginning of the current fiscal year.