SAUGUS — Water and sewer bills for the average residential user are set to rise by a combined $32 for fiscal year 2024, bringing the annual cost paid by most residents for both services to $940.
The rates were voted on by the Board of Selectmen and Finance Committee last week, and are set to go before Town Meeting for final approval on Monday. The Select Board is responsible for setting the sewer rate, while the FinCom sets the water rate. Neither Town Manager Scott Crabtree nor FinCom Chairman Ken DePatto were certain why the responsibilities are split between the two parties.
Both the Select Board and the FinCom were presented three options for raising the rates in the coming fiscal year — with the board opting to hike sewer rates by 3 percent, and the committee selecting an increase of 5 percent. The Abrahams Group also presented 6- and 7-percent increases for water rates and 2- and 4-percent increases for sewer rates.
During the FinCom meeting, Matt Abrahams, of The Abrahams Group, cited the growing Massachusetts Water Resources Authority assessment of the town, as well as debt-service payments related to capital improvements, as key rate-setting drivers. The MWRA assessment of the town is set to rise by 8.4 percent for the coming fiscal year, and debt-service payments are set to skyrocket in FY25, rising by 31.2 percent from the previous year.
For sewer, Abrahams once again pointed to debt, which is set to rise 11.6 percent between FY24 and FY25, as a major driver, along with the 9.4 percent increase in the Lynn Water/Sewer Commission assessment for the coming fiscal year. That assessment is set to increase by another 27.1 percent in FY25, a result of the commission’s capital plan and $40 million in borrowing. He also cited a 4 percent, or $25,000, increase in indirect costs.
Abrahams showed both boards a snapshot of the current revenues and expenditures in the respective enterprise funds with no built-in rate changes. For water, that meant a deficit of $859,758, with the projected sewer deficit at $68,495.
DePatto expressed frustration with a vote of Town Meeting in 2020 to not raise water rates for fiscal year 2021, after his committee recommended a 4 percent increase that year. The lack of a rate increase that year left revenues stagnant and residents facing higher increases down the road, he said.
Despite those frustrations, DePatto motioned to increase rates by 5 percent and said he would be comfortable with using certified retained earnings — essentially reserve funds — to balance the budget for the coming year.
“I haven’t done this more than once I think in 25 years,” he said. “Then next year, we might have to bite the bullet and go up more than the 5 or the 6 or the 7 (percent). But maybe things might change. So my opinion is 5 percent … will get the job done. It’s not going to do what we’ve been doing for the last eight years. But it’ll get the job done.”
He received unanimous support from fellow members on the motion.
The Select Board also unanimously approved the proposed rate increase — in this case 3 percent for sewer — with members citing a desire not to burden residents with high bills, but acknowledging the need to ensure the health and stability of the fund.
“This is a fairly small increase considering where costs are heading and projects we have in the pipeline,” said Jeff Cicolini.
“We’re being responsible with the 3 percent,” said Corrine Riley.
The FinCom voted to recommend the rate set by the Select Board to Town Meeting, during which members will vote on both rates Monday evening. Town Meeting has the authority to reject the recommendations from FinCom, but thus far, members have been in lockstep with the committee.
