SWAMPSCOTT — Water rates in Swampscott will increase 3% and sewer rates will increase 4% this year after the Select Board unanimously approved the adjustments at their Tuesday meeting.
The vote came after board members postponed a decision at their previous meeting, asking Finance Director Patrick Luddy to return with additional information explaining why this level of increase was necessary following last year’s much steeper rate hike of approximately 6% for water and 18.2% for sewer.
Luddy said the approved rates will increase the average household’s combined water and sewer bill by about $13 per quarter, or roughly $52 annually.
He told the board that last year’s larger increase was never intended to be a one-time fix. Instead, the town hoped to build enough financial stability in its water and sewer enterprise funds that future increases could remain relatively modest rather than forcing another double-digit jump when major projects arise.
“Setting rates at this level will allow us to maintain retained earnings and support some of the capital expenditures we know about that we have to take on over the next five years and help us stabilize rate increases going forward so that we don’t have large swings,” Luddy said.
During the presentation, Luddy outlined roughly $12 million in water and sewer infrastructure work over the next five years in the town’s current capital plan, including ongoing work in Phases 2A and 2B of the town’s ongoing IDDE project.
Luddy said the town’s financial policy calls for maintaining retained earnings equal to at least 20% of water and sewer enterprise budgets, and that those reserves are intended to help offset future capital costs rather than relying entirely on large rate increases when problems come up.
Chair Katie Phelan said much of the board’s discussion over rates has centered on preparing for major infrastructure projects before they become immediate financial burdens. Phelan said those concerns were at the center of last year’s discussion over rates.
“The whole conversation last year was really trying to factor in somewhat of a wildcard,” she said. “We know what’s going to happen is very expensive … we know we are going to have to do it, and how can we do our best to stabilize out the increases even taking into account that risk.”
Phelan said the board’s goal is to make annual increases more predictable so residents are less likely to face another substantial jump if a major piece of infrastructure fails.
“I think it is far easier for families to take that increase than take the hundreds increase in an out year if something catastrophic happens,” she said.
Board member MaryEllen Fletcher said she appreciated the long-term approach but wanted to seriously examine the financial data before asking residents to absorb another increase so soon after last year’s.
“I don’t want to go back into retained earnings, but I also want to be really lean because that was a hefty increase that we gave people last year,” Fletcher said. “I received a lot of feedback on that, and there’s a lot of hardship, believe it or not, for people in a position of being on a fixed budget.”
The board ultimately approved Luddy’s recommendation without changes. After the vote, Fletcher also asked staff to study whether the town should eventually eliminate its tiered water-rate system, in which customers pay progressively higher rates as their water use increases, and instead adopt a single usage rate. She said she would like the board to revisit that discussion during next year’s rate-setting process.
