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February 16, 2001

MWRA Proposes FY02 Water and Sewer Assessments to Communities

MWRA today announced individual community water and sewer assessments for Fiscal Year 2002 based on a proposed $517 million current expense budget. Depending on the outcome of state budget legislation this spring, annual water and sewer assessment increases to MWRA service area communities will average between 5.9 to 9.7 percent. The assessment increases translate roughly into $24 to $36 household increases in the 21 core communities receiving both MWRA water and sewer service.

More than half of the current expense budget will go toward debt service payments on bonds issued to finance ongoing water and sewer service improvement projects, including the construction of the 17.6 mile MetroWest Water Supply Tunnel.

"Various components of the 10-year Integrated Water Supply Improvement Program, including the MetroWest Water Supply Tunnel, are now well underway," said MWRA Executive Director Doug MacDonald. "New operating costs are under tight rein, but paying for the tunnel project and our other necessary system improvements makes a budget increase unavoidable if we are to continue the service that our customers -- and environmental and public health protection laws -- demand."

The remaining portion of the proposed budget will largely fund daily operating costs of the regional water and sewer systems. "Especially with debt service costs increasing, we need to make sure we can justify each dollar we propose to spend on day-to-day operations," said MWRA Chief Financial Officer Barbara Gottschalk. "In addition to several savings initiatives, this budget reflects our efforts to take advantage of attrition over the past year to achieve about a 5 percent reduction in staffing."

MWRA has included several major initiatives to control costs in the proposed budget:

  •  Residuals Processing Contract: MWRA has re-bid the contract to barge, dry, and market sludge from the Deer Island Treatment Plant for a 15 year period. The new contract, one of the largest public/private partnerships for a water/wastewater utility in the U.S., plus upgraded equipment at the plant, will save $7.7 million next fiscal year.
  •  Deer Island Savings: Use of electricity generated on-island generators, fuel cell and a new hydroelectric facility will save $500,000. A new chemical contract saves an additional $700,000. Operational changes in the secondary treatment system will save another $700,000

Each February MWRA distributes preliminary estimates of community assessments for water and sewer services for the upcoming fiscal year based on best available information about anticipated MWRA expenditures and revenues. This year, because the Governor has recommended a reduction in Commonwealth debt service assistance, and because the Legislature has not yet acted on the state budget, MWRA is sending out two alternative sets of assessments that reflect differing levels of debt service assistance and funding from a rate stabilization account. MWRA is providing these alternatives to give communities as much information as possible for their own financial planning in this uncertain environment.

  •  Attachment A [PDF] reflects an overall MWRA increase of 9.7% based on the Governor’s recommendation.
  •  Attachment B [PDF] reflects an overall MWRA increase of 5.9%, assuming the Legislature restores full funding for the debt service assistance program.

Each MWRA community sets its own water and sewer rates for residential and business customers. Rates vary considerably among communities due a variety of local factors. The average household in the 21 core communities uses approximately 63,000 gallons per year. Core community households consuming this volume would see an average annual bill of about $520 to $532.

For the combined 9.7% increase (Attachment A) the average sewer assessment increase is 6.8% and the average water assessment increase is 18.4%. For the 5.9% increase (Attachment B) the average sewer assessment increase is 2.4% and the average water assessment increase is 16.6%.

As always, preliminary assessments for individual communities may be higher or lower than the average sewer and water assessments. Water assessments to specific communities are based on each community's share of water use in calendar year 2000. Sewer assessments are based on a community's shares of average CY98, CY99, and CY00 wastewater flow, census and sewered population, and high strength industrial user volume and loading contributions.

Final assessments for FY02 will be determined with approval of MWRA’s FY02 CEB by the Board in June. The final budget will incorporate changes resulting from the Advisory Board’s recommendations, the Board’s budget deliberations and decisions on the use of rate stabilization funds in FY02 and beyond, and legislative decisions regarding debt service assistance.

A gallon of drinking water from the tap in the MWRA service area now averages about nine/tenths of a cent. Flushing a toilet will cost from 1.4 to 4 cents depending on toilet size.