Archive 2008 - 2019

Letter to BWC Concerning Water Rate Hearing

by William Dowd

Dave (Keating, Chair of the Board of Water Commissioners),

This communication is from me as a ratepayer and MEMBER of the FinCom. These questions and opinions are mine only and not the questions or opinions of the FinCom and I do not purport to speak for them. I have copied them on this e-mail as information only.

I do not have the e-mail addresses of the other Water Commissioners. Please forward this to them.

Thank you for sending around the material on the rate increase. I was very curious about the basis for it and was very happy to have a chance to look through it before the hearing.

I come to this proposal with two hats; ratepayer and FinCom MEMBER. As a ratepayer, I seek the lowest possible rates for the water I use. As a MEMBER of the FinCom, I seek a financial structure that is responsible, efficient, stable and sustainable.

At the moment, having read through the slide pack, my concerns as a MEMBER of the FinCom are taking top priority.

Unfortunately, I will not be able to be in attendance at your hearing tonight. Please accept my input and give it due consideration.

First, in the last two years, there have been a number of Town Meeting votes closing out old projects and capturing unexpended funds for Water Surplus. It has at least appeared that these matters had been neglected. While it may have been fortunate under the circumstances that these funds were capturable that way, is there a procedure now in place by which water projects are monitored and closed in a more current and orderly way?

Second, it appears from your tables that Water Surplus was spent down by over $700k in just one year, yet the rate proposal has it being restored over seven years at $100k per year. How was the desired level of $700k devised? Are there established benchmarks or industry standards that come into play here. It's important to understand how a target Water Surplus of $700,00 was decided. Once we know that, why are waiting seven years to get there. I know there's a desire to avoid rate shock, but the business spent it down in one year, and I'm just surprised you're proposing to go so long under your target level.

Third, on the matter of unpaid bills, don't unpaid water bills become liens on the property? Isn't this a timing issue? Aren't all bills paid in full eventually?  Even if that is true, I fully support raising the interest on unpaid amounts. I also think four months is way too long to let the water flow without being paid. Warnings should be issued at 60 days and shutoff at 90.

Fourth, I see nothing in your financial statements that reflects the allocation to the Water Dept of its portion of the $1.5 million OPEB appropriation for FY14.  I pointed this out last year and a portion of the FY12 $500k OPEB appropriation was supposed to be allocated to Water, but I'm not sure it was. This is a benefit plan expense just like the benefits budget, a portion of which is allocated to your cost basis. Where is the Water Dept's piece of the FY14 $1.5 million?

Fifth, while the FY14 voted budget for Water includes - in my opinion, incorrectly - funds for wage increases for water employees not yet under contract, what will happen if the actual cost of the newly negotiated union contract exceeds the amount you're using for FY14 costs?

Sixth, and perhaps most importantly, why is there not even a mention of the huge costs facing us for pipe replacements? We've been told for years that the costs are certain and huge, yet there's no mention of them in this proposal and no set aside for them. Our ambulance service, whose rate setting process is considerably less diligent than your proposal, collects in rates money to fund future capital expenditures for ambulance purchase. Yet the water rates have not - and your FY14 proposal does not - make any allowance for distribution system replacements. This is a huge issue which both ratepayers and taxpayers need to have the Water Commissioners deal with most urgently.

The Selectmen's campaign to take over the Water Department is ill-advised in my opinion. However, to the extent that the Water Department does not deal directly with the many financial and operational challenges it faces, I fear the Selectmen's push will only gain momentum.

From having been around and watched a lot of rate hearings, I have no illusion that the Board is settled on the 9%. Still, I would appreciate a response to the questions and concerns I have raised.

Thank you.


Comments (2)

I am also very interested in hearing the response to your queeries, Bill. Please keep us posted! Thanks for your dogged pursuit of these answers

Fellow concerned Townie | 2013-06-24 17:29:44

I would appreciate answers to the questions listed above, as well.

Sean Holliston Tax payer | 2013-06-24 14:31:32