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2022 ATM,2022-1 STM APPROPRIATION COXMTTEE 21 MARCH 2022
<br /> Water Enterprise Fund FY2022 FY2023 $ %
<br /> Appropriated Requested Change Change
<br /> Compensation $ 865,454 $ 875,670 $ 10,216 1.18 %
<br /> Expenses $ 514,300 $ 533,500 $ 19 3.73 %
<br /> Debt Service $ 1,179,794 $ 1,224,746 $ 44,952 3.81 %
<br /> MWRA Assessment $ 8,743,912 $ 8,493,467 $ (250,455) (2.86)%
<br /> Total Requested in Article 5 $ 11,303,460 $ 11,127,383 $ (176,077) (1.56)%
<br /> Indirect Expenses (Article 4) $ 918,245 $ 977,093 $ 58,848 6.41 %
<br /> Cash Capital (Article 13) $ 400,000 $ 600,000 $ 200,000 50.00 %
<br /> OPEB Contribution (Article 17) $ 2,761 $ 2,761 $
<br /> Total Water Enterprise $ 12,624,466 $ 12,707,237 $ 82,771 0.66 %
<br /> Wastewater Enterprise Fund FY2022 FY2023 $ %
<br /> Appropriated Requested Change Change
<br /> Compensation $ 389,779 $ 399,848 $ 10,069 2.58%
<br /> Expenses $ 454,650 $ 458,400 $ 3,750 0.82%
<br /> Debt Service $ 1,464,513 $ 1,595,417 $ 130,904 8.94%
<br /> MWRA Assessment $ 8,177,213 $ 8,499,573 $ 322,360 3.94%
<br /> Total Requested in Article 5 $ 10,486,155 $ 10,953,238 $ 467,083 4.45%
<br /> Indirect Expenses (Article 4) $ 514,111 $ 542,416 $ 28,305 5.51%
<br /> Cash Capital (Article 14) $ 200,000 $ 300,000 $ 100,000 50.00%
<br /> OPEB Contribution (Article 17) $ 3,004 $ 3,004 $
<br /> Total Wastewater Enterprise $ 11,203,270 $ 11,798,658 $ 595,388 5.31%
<br /> With a water fund increase of 0.66% and a wastewater fund increase of 5.31%, the percent increase in the budget
<br /> for the water and wastewater funds over FY2021 on a combined basis is 2.85%. Compared with last year's increase
<br /> of 6.61%,this is very modest. The most significant components of the budget increase are addressed briefly below.
<br /> The first, an unusually small increase in the Town's MWRA assessment, has a positive impact. The second, the
<br /> continuation of a long-term plan to transition the funding of the enterprises' recurring capital investment programs
<br /> from debt to cash raised in the rates, increases the combined budget by about 1.25%, but should ultimately result in
<br /> cost savings to rate-payers.
<br /> NIWRA Assessment. The largest component of both the water and wastewater budgets is the assessment charged by
<br /> the Massachusetts Water Resources Authority (MWRA), which now represents approximately 70% of the total of
<br /> each fund. The Town is assessed a share of the MWRA's total FY2023 water budget based on its proportionate
<br /> usage in the most recent full calendar year(CY2021) relative to other towns in the MWRA community. In CY2021,
<br /> Lexington's water system share decreased by about 7%, compared with a 5% increase the year before. This change
<br /> results primarily from Lexington's pattern of fluctuating irrigation usage, compared with other more urban towns in
<br /> the MWRA community where water usage is more stable. In CY2020, Lexington's water consumption was much
<br /> higher than normal due to extraordinary irrigation usage during that year's dry summer. In CY2021,with a very wet
<br /> summer, the irrigation pattern turned around, resulting in a substantial decrease in Lexington's system share. As a
<br /> consequence of the share reduction, Lexington's combined preliminary MWRA assessment for FY2023 is just
<br /> 0.4%over the prior the year, compared with a system-wide MWRA increase of 3.4%.
<br /> Transition to Cash Capital. Two years ago, a plan was initiated to transition the funding of regularly recurring
<br /> capital investments in the Town's water and wastewater systems (targeted at $2,200,000 annually for the water
<br /> system and $1,000,000 annually for the wastewater system) from borrowing to cash raised in the rates (referred to
<br /> in the Brown Books as "cash capital"). Since the intent is ultimately to raise the same amount each year to
<br /> continuously maintain the system, this amount is treated as an annual operating cost at rate-setting, even though
<br /> applied to capital investment and appropriated in Articles 13 and 14. See Brown Book, pp. V-27, 30. To minimize
<br /> the impact of the changeover on rates - which would be significant if done on a one-time basis - the transition is
<br /> being phased in gradually: in the case of the water fund, by adding an additional $200,000 in cash capital each year
<br /> for eleven years; and in the case of the wastewater fund, $100,000 per year for ten years. See the Brown Book, pp.
<br /> V-26-27 and V-30-31. The transition currently adds about 1.5%to the increase in the water fund budget and 1%to
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