Published in the June 21, 2018 edition

By MAUREEN DOHERTY

NORTH READING — There’s great news for all customers of the North Reading Water Department.

The Fiscal Year 2019 water rates will not be increasing this year, Water Superintendent Mark Clark reported to the Board of Selectmen Monday night during the annual public hearing required to be held to set the water rates for the coming year.

This is a direct result of the water deal finalized between Andover and North Reading earlier this month and the subsequent approval of the 99-year lease and intermunicipal agreement passed by the House and Senate earlier this month and signed into law by Gov. Baker June 13 (see related story).

“Where would we have been without the Andover agreement? I would have been recommending between a 7% and 8% rate increase for next year,” Clark said. “The provisions of the contract that we’ve entered into do away with a need of a rate increase at all for FY19.”

Clark’s assessment is based on water revenue from the first 11 months of FY18 plus a projection for the current month of June totaling $4,308,787 for the year. “This revenue, combined with not spending the entire budget for FY18, would generate retained earnings in FY18 of $180,239,” he stated.

He further explained that prior to the June Town Meeting the Water Enterprise Retained Earnings, which includes the Stickney Fund and the Water Infrastructure Stabilization Fund (WISF), was $1,023,451. At the June 4 Town Meeting, voters approved a transfer of $1,001,902 in certified retained earnings into the WISF for a new balance of $2,025,353.

The FY19 Water Enterprise budget, which was also approved at Town Meeting, totals $4,638,115, which Clark said is an increase of $333,357 or 7.7% over the FY18 budget. The budget covers personnel costs ($815,000, up $72,000 or 9,7%), all expenses ($2.45M, including purchasing water from Andover, chemicals, supplies and electricity), debt service (which increased almost 20% over FY18, to $907,800), and indirect costs, such as when the Water Department needs to pay for manpower from the DPW for a water main break.

Clark added that budgets for the past two years had included “salary contingencies” of $102,231 for Water Department positions that have remained vacant for two years and that are not anticipated to be filled in FY19 as they will no longer be needed.

Clark explained that the town had been raising water rates “fairly significantly over the past three years anticipating a transition to the MWRA” as the goal was to “fully fund the current operating expenses… to generate some level of retained earnings prior to the transition that could help pay for some costs associated with the transition, and to avoid the need for a huge rate increase at the time of the transition.” As a result, the current retained earnings of over $2M represents “approximately 44% of the FY19 Water Enterprise budget.”

Taking into consideration all of the factors resulting from the successful execution of the IMA with Andover and the 99-year lease agreement, Clark recommended that the current water rates remain unchanged from FY18 at all three tiers:

• Tier 1: $9.07 per 1,000 gallons, up to 10,000 gallons quarterly;

• Tier 2: $13.31 per 1,000 gallons from 10,000 to 22,500 gallons quarterly;

• Tier 3: $18.14 per 1,000 gallons above 22,500 gallons quarterly.

Also remaining unchanged is the $5 quarterly administrative fee per bill.

Selectmen Chairman Mike Prisco asked how the approximately $435,000 being returned to the Water Department will be appropriated.

“The budget went up by $313,000 so the first $313,000 in savings is what allows us not to have to raise the rates this year,” Clark said, adding any savings in excess of that amount “will go to retained earnings and then we’ll be back at this time next year with a year’s worth of data under our belts able to say ‘what do we need to do?’”

Selectman Steve O’Leary said factored into next year’s discussion will be future capital projects for the department.

Clark’s news is especially refreshing for ratepayers in light of the fact that just a few weeks earlier, when he was wearing his “Acting Director of Public Works” hat, he had to break the news to the board that the town’s annual trash fee would need to increase for the first time in 10 years due to the worldwide chaos in the recycling markets following China’s stricter enforcement of what constitutes contamination in the recycled materials picked up at the end of everyone’s driveway that are eventually shipped for processing in China.

Water meter replacement update

Directly related to the town’s ability to keep its water rates low will be the public’s cooperation in the ongoing water meter replacement project. Currently, the meters are being replaced in the northeast section of the town

Clark and the board members could not stress enough the importance of this cooperation in this upgrade from the 27-year-old mechanical meters that must be read manually by a Water Department employee going house to house and the new smart meters that will read water usage remotely using RF signals from a transmitter installed on the exterior of the structure.

In addition to the savings in manpower, the accuracy of the new meters will result in bills that better reflect actual water usage because these smart meters take one meter reading every hour and send daily usage from each meter back to the water department, Clark said.

He explained that the new meters will read down to a tenth of a gallon while the old meters can be read to within 1,000 gallons from outside the home or within one gallon if read off the meter inside the home.

Town Meeting previously approved an expenditure of $1.5M from the water enterprise to fund this upgrade, which is anticipated to be completed in November.

The conversions began May 1 and the company has two individuals doing the work, but will eventually increase the number of installers to three and then four once more appointments are made, Clark said.

The postcards requesting customers set up their appointment times are being mailed neighborhood by neighborhood to cut down on travel time between installations.

Selectman Bob Mauceri reported that installation at his house only took about 20 minutes to complete, adding it also took his wife about two hours to clear the area in the basement in advance to make the meter accessible to the installer.

When customers receive their postcard with the contact information, Prisco urged customers go to the website to set it up where they will easily see all of the available time slots to pick one that best suits their schedule. He said it was very easy to use. Those without Internet access can call the 800 number to schedule their appointment.

Prisco also wanted the town to be pro-active in its pursuit of those who refuse to allow a worker inside their home to change the meter, which is the property of the town’s Water Department even though it is located inside the home. (The piping that leads to it from the curb box at the street is the responsibility of the property owner.)

In his recommended fee structure for the coming year, Clark has changed the language of what once was called a “final meter reading” that typically occurs when a property changes hands to a “special meter reading” and suggested the rate be $50 based on recouping the cost to the department.

By changing it to “special meter reading” that fee could be charged any time the meter had to be read in person. The board members discussed at length potentially requiring more frequent meter readings for the small minority of customers that may refuse to have their meters changed out — anywhere from monthly to weekly — to discourage noncompliance.

Selectwoman Kathryn Manupelli said those who object to the new meters due to their concerns for health risks from the RF signals could potentially be reasoned with by giving them the scientific information on the topic to “dispel those notions,” but she was not sure how anyone could change the minds of those who have privacy concerns over the “smart” technology used by the meters despite the assurances by the water department that the meters are not monitoring other activities in the home. However, she said since the town is going through this conversion for the benefit of “accuracy improvement” in meter reading technology the actions of the third category of people who simply refuse to comply are affecting all the ratepayers and as such there should be financial consequences to  incentivize compliance.

Selectman Andrew Schultz said for the handful of people who may ultimately refuse to comply with the meter change-out the department could send out a meter reader once a week so those special meter read charges would add up, to not make it worthy tampering with the meter. Clark said there is also a $300 fine in the rate structure per meter tampering incident.

Prisco stressed that it is important for the public to know up front that the town is serious about the water meter conversions and they should not wait until November, when all the installations are supposed to be completed, to let the public know of the financial consequences of noncompliance.