MASSACHUSETTS WATER RESOURCE AUTHORITY ADVISORY BOARD
The Massachusetts Water Resource Authority (“MWRA”) was created by the Massachusetts Legislature in 1984 to succeed in the interests of the Metropolitan District Commission with regard to the delivery of safe drinking water to the member communities and to treat and dispose of wastewater from the member communities, all in conformance with applicable law. The same legislation that created the MWRA also created the Massachusetts Water Resource Authority Advisory Board to represent the interest of the sixty-one member communities. Each municipality is represented by at least one person on the Advisory Board. In my capacity as Director of Public Works I have been appointed to the MWRA Advisory Board by the Board of Selectmen to represent the Town of Belmont. MWRA provides wholesale water and sewer services to
61 communities. Forty-seven communities purchase water supply services, and Forty-five communities purchase wastewater transport and treatment services. Thirty-one communities purchase both. Approximately 2.5 million people, or 43 percent of the population of Massachusetts live and work in the communities that purchase water and/or wastewater services from MWRA.
MWRA provides water and sewer services to communities on a wholesale basis. Each community then re-sells services on a retail basis. As a result, household water and sewer charges include each household’s share of the community’s MWRA water or sewer assessments, plus the community’s own charges for the provision of local water or sewer charges.
MWRA funds its operations primarily through user assessments and charges. No funds supporting the current expense budget are subject to appropriation, except debt service assistance from the Commonwealth of Massachusetts and several minor reimbursements from the Commonwealth. Federal grants have ended.
MWRA finances its capital improvement program primarily from issuing long-term general revenue bonds. Savings in capital costs are particularly important since every dollar cut from the capital budget saves approximately three dollars in future debt financing costs. The MWRA has adopted a policy whereby the term of bonds is matched to the life of the facility/facilities. In order to control costs to its member communities the MWRA has placed a cap on capital expenditures. The debt service for the MWRA, currently 59% of the annual current expense budget, is expected to be at 65% by the year 2010.
The Boston Harbor Project is the second largest public works project ever undertaken in New England. Construction for the Boston Harbor Project is complete. According to the MWRA, the total cost of the project was $3.5 billion, not including the $150 million for the processing of residuals (pellets) in Quincy.
The Combined Sewer Overflow (CSO) program is proceeding. Spending through FY 2002 was $176 million. Through FY 2003 the spending will have grown to $210.9 million. It is anticipated that expenditures on the CSO program, which should be completed by 2010, will be a total of $649 million.
The Water Works System Improvements Program (“WWSIP”) consists of 55 projects. The largest projects are the Walnut Hill Water Treatment Plant ($333 million) was completed in April 2004. The MWRA will also construct 7 covered storage facilities to protect treated potable water ($197 million). Total estimated expenditures for waterworks system projects for fiscal years 2004 through 2008 are $441 million, with another $328 million in spending forecast through fiscal year 2013. Total projected capital spending for FY 2006 is $209.2 million, including contingency. Total spending for FY 2004-2013 has been reduced to the capital spending levels identified in the FY 2004 Capital improvement Program (CIP). MWRA staff eliminated, scaled down or delayed a net $342 million in capital projects and or phases
as compared to the final FY 2005 CIP. Spending levels in the FY 2006 capital budget are reduced in order to address a necessary reality that the debt service costs associated with the CIP are a significant burden to MWRA’s ratepayers. Approximately 80% of MWRA CIP spending has been mandated by court order or regulation.
MWRA staffing, which was at 1754 in June of 1997, dropped to 1385 in June of 2002 and was further reduced to 1271 filled positions by June of 2005 in the continuing effort to control costs.
The severe shortfall in state revenues compared to expenditures in FY 2003 has required the elimination of the entire State Debt Service Assistance of $47.2 million in FY 2003. In FY 2004 State Debt Assistance returned at a $4.1 million level and in FY 2005 increased to $8.7 million. The MWRA Advisory Board and staff continue to work with the state legislature and Governor’s office to increase State Debt Service Assistance to help control debt service costs for the member communities. As of June 2005, Belmont’s combined sewer and water assessment by the MWRA for FY 2006 has increased $178,611 over FY 2005, which translates to a combined increase in sewer and water assessments by the MWRA on Belmont of 3.6 % over FY 2005. Each community independently establishes retail sewer and water rates. When
establishing local rates, community officials consider issues related to the pricing of services, level of cost recovery, and the local rate structure or methodology. By legislation, ratepayers and member communities have no choice except to pay to the MWRA the full amount assessed against the respective communities by the MWRA.
Detailed information on the Current Expense Budget and Capital Improvement Program is available online at www.mwra.com.
Respectfully submitted,
Peter J. Castanino, MWRA Advisory Board Member
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