By Melanie Petrucci, Senior Community Reporter
Shrewsbury – Shrewsbury’s Water and Sewer Department has been reviewing its revenue and expenditures to determine how to meet its financial needs in the next three years. Town Manager Kevin Mizikar, Water & Sewer Superintendent Robert Tozeski, and Douglas Gardner of Pioneer Consulting Group presented a water rate study and recommendations to the Board of Selectmen Nov. 14.
According to these officials, the town’s current rates are not sufficient to fund salaries, expenses, debt service and capital improvements beyond fiscal year (FY) 2018. Recommended rates presented will generate sufficient revenues for FY 2018/19 through FY 20121 at the minimum. Recommendations also included eliminating the minimum water flow charge and maintaining a conservation water rate.
Mizikar gave a brief history of the rate structure. He shared that in 2017, 83 percent of the revenue comes from water rates which were $3,667,383.99, up from $3,404,134.73 in 2016. He further shared that 65.18 percent of the consumer base is residential versus 16.2 percent commercial with the remainder shared by condos, apartments and schools. The total revenue for 2017 was $4,705,582, he said.
“Capital improvements are a critical part of the water department,” Tozeski said. “I look at it three ways: we have water quality, water availability and water distribution and even though they are all separate entities, they are all interconnected.”
He listed improvements made between FY 2014 to present: 5.7 miles of main replacement at $5,285.800; entire system leak detection at $32,795; 6.8 miles of ice pigging (pipeline cleaning technology which cleans the inside of pipes using an ice slurry – this helps with the manganese issue) at $144,000; meter upgrades totaling $1,094,350; treatment plant debt service at $12.7 million; and home farm 6-5 well at $566,000.
Going forward, the department will need approximately $2 million annually in additional revenue to meet capital and strategic planning needs which include personnel, operating expense, debt service, capital improvements and capital reserves.
Douglas Gardener from Pioneer Consulting Group presented the proposed rate structure for the board to consider, bearing in mind the total revenue requirement of $4,921,180 needed in 2018, then jumping to $5,809,942 in 2020 factoring in the new treatment plant.
Gardner’s proposed rates include a minimum charge assessed based on meter size for all customer classifications. The residential customer who has a one-inch meter and uses 0 to 5,000 gallons will be charged an additional $3 per 1,000 gallons over the $20 base charge. The next step is 5,001 to 25,000 where the additional charge per 1,000 gallons is $4.22, and 25,001 to 60,000 would be charged $7.87 per 1,000 and the user of over 60,000 will be charged the same current rate of $14 per 1,000 gallons consumed. Flow charges have been eliminated. The new rate is a combination of showing the meter charge, plus the debt service and the capital improvements.
A public hearing will be scheduled, then take a vote will be taken to set the rates which will go into effect early next year.