SAUGUS — The average homeowner will pay $6 more per year on their water bills and $22 more on sewer bills.
Town Meeting approved a 1.5 percent spike in the water rate, meaning the average homeowner will pay $3 more on each bill. Each resident is billed twice per year.
While the rate is still following an upward trend, the increase is smaller than in previous years. The water rate increased by 9.5 percent in fiscal year 2017, 2.5 percent in FY2018 and 3 percent in FY2019.
Without the rate change, the town would still have a surplus in FY2020, but would deplete its retained earnings by year five, said Matt Abraham of The Abrahams Group.
The town is preparing for millions of dollars in projects in coming years, including a $2 million water meter replacement program and a meter-reading vehicle in FY2022, a $2.35 million sewer rehabilitation project in FY2021 and $2.3 million for the second phase of Lincoln Avenue lift station improvements in FY2020. More than $1 million has already been borrowed for the lift station improvements.
A zero percent increase would be “in my opinion, financially irresponsible,” said Ken DePatto, chairman of the Finance Committee. The panel has committed to a goal of maintaining 10 percent retained earnings as a best practice, he said.
Town Meeting members supported the increase with a 40-1 vote on Monday without discussion. They also appropriated $6,725,229 to operate the town’s water enterprise fund in 2020.
Selectmen, who are charged with determining the sewer rate under the town charter, passed a 7 percent increase for next year. This is estimated to increase the average residential sewer bill by $11 from $153 to $164 in fiscal 2020 and the average commercial sewer bill from $1,425 to $1,525. Bills are distributed twice each year.
If they hadn’t raised the rate, the town would be facing a projected shortfall of $1,168,877, said Abraham.
“Without doing anything, retained earnings would be completely drained by FY20,” said Abraham. “That’s what we’re projecting.”
