June 8, 2001

Communities that receive only sewer service from MWRA will see assessment increases averaging 1.4%. The assessment for water services, however, will increase by 9.8%, reflecting MWRA’s ongoing capital spending for water system improvements in the treatment, transmission, and storage of drinking water.

The final assessments follow an extensive four-month review of next year's budget by the MWRA Advisory Board and the Board of Directors. During this review, the $518 million budget proposed in February 2001 was cut by $10 million bringing the final FY02 operating budget to $508 million. Fifty-eight percent of that amount is earmarked for interest and principal payments on the short and long-term bonds that MWRA must issue to finance the construction of new facilities and necessary repairs and improvements to the regional water and sewer infrastructure.

"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 Frederick A. Laskey. "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."

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 Plant savings: Use of electricity generated on-island generators, fuel cells 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
• Continued efforts to use staff more efficiently: MWRA has reduced filled positions by about 250 positions (15%) over four years.

Although MWRA's wholesale water and sewer assessments are increasing 3.5%, MWRA's FY02 assessments to individual communities will vary considerably depending on local water and sewer use (see Attachment). 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 wastewater flow during the 1998-2000 period, high strength industrial user volume and loading contributions, and census and sewered population.

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 core communities uses approximately 63,000 gallons per year. Core community households consuming this volume would see an average annual bill of about $511. For a larger single-family home using 90,000 gallons per year in one of the 21 communities receiving both MWRA water and sewer services, it is estimated that the average annual water/sewer bill in FY02 will be about $731, an increase of $30 from FY01 that includes an estimate for community-related increases.

A gallon of drinking water from the tap in the MWRA service area now averages about nine/tenths of a cent. A toilet costs from 1.2 to 3 cents to flush depending on toilet size.

MWRA’s annual rate increases have been kept to an average of 3.6% for the six years between FY96 and FY02.