The Water & Sewer Commissioners conducted a Public Hearing on Water & Sewer rates last night, June 27, 2019. After considerable debate, the Water & Sewer Commissioners, based on analysis and recommendations from staff, voted to increase the FY20 Water & Sewer rates by 15% and 1%, respectively, effective July 1, 2019.
Under this model, the combined water and sewer costs for an average family (12,000 cubic feet per year) would be increased by 8.87% or $34.50 per quarter. While sewer rates are stable, the water rate increase was driven by several factors this year.
Roughly half of the rate increase is a function of declining sales. Since FY16, sales are down 5%, due to a combination of wetter than normal springs, which depresses sales, and system restrictions put in place by the MassDEP via the Town’s water withdrawal permit, which caps summer sales.
Water and Sewer Commissioner Coley Rybicki said, “It’s tough to run a business when the State requires you to spend money on advertising and programs intended to decrease sales, which artificially reduces demand and operating revenue, which in turn requires higher rates to support the system.”
The other half of the rate increase is a function of the ongoing capital and fixed costs associated with operating an older water distribution system like the one in Danvers.
“The Commissioners faced a difficult decision last night,” said Town Manager Steve Bartha. “They are clearly sympathetic to the impact this will have on ratepayers, but they also understand the headwinds facing the system and the statutory requirement that Danvers Water remain self-supporting. This increase should ensure rate stability in the form of modest and predictable rate increases moving forward, which along with reliable service is what most customers are looking for.”