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APPROPRIATION COMMITTEE-2017 ATM
<br /> Wastewater Enterprise Fund FY2016 FY2017 FY2018 $
<br /> Actual Appropriated Requested Change Change
<br /> Compensation $209,514 $298,234 $308,749 $10,515 3.53%
<br /> Expenses $296,176 $347,525 $356,525 $9,000 2.59%
<br /> Debt Service $1,021,867 $981,220 $1,063,349 $82,129 8.37%
<br /> MWRA Assessment $6,970,176 $7,265,870 $7,453,886 $188,016 2.59%
<br /> Total Requested in Article 5 $8,497,733 $8,892,849 $9,182,509 $289,660 3.26%
<br /> Indirect Expenses (Article 4) $478,354 $503,898 $546,827 $42,929 8.52%
<br /> OPEB Contribution $4,085 $4,085
<br /> Total Wastewater Enterprise Budget $8,976,087 $9,396,747 $9,733,421 $291,441 3.58%
<br /> Note that this table differs from that contained in the warrant in three respects: (1)the MWRA assessments for
<br /> water and wastewater reflect the MWRA's preliminary assessments issued in February,which are much lower
<br /> than the 10%increase "placeholders"assumed in the Warrant; (2)indirect expenses that will be charged to the
<br /> enterprise funds, although appropriated separately under Article 4, have been included for completeness; and
<br /> (3) the new charges to the Water and Wastewater Enterprise Funds to fund liabilities for Other Post-retirement
<br /> Employment Benefits ("OPEB"), although appropriated separately under Article 21, have also been added for
<br /> completeness.
<br /> As can be seen from the table,this year's increases in water and sewer enterprise costs are very modest. On a
<br /> combined basis, the total expenses of the two funds are going up only 1.73%. This means that when FY2018
<br /> water and sewer rates are set in the fall,rate increases should be modest.
<br /> MWRA Assessments. The largest expense components of both the Water and Wastewater Enterprise Fund
<br /> budgets are the assessments charged by the Massachusetts Water Resources Authority (MWRA), which now
<br /> represent 70-75% of the total budget for each fund. The Town will be assessed a share of the MWRA's total
<br /> FY2018 water and sewer budgets based on the Town's proportionate water and sewer usage in the most recent
<br /> full calendar year (CY2016), compared with other towns in the MWRA community. Based on the MWRA's
<br /> preliminary assessments,' the MWRA increases/decreases for FY2018 will be -1.01% for water and 2.59% for
<br /> wastewater, as set forth in the table above, for a combined increase of 0.78%.
<br /> The small reduction in Lexington's water assessment from FY2017 compares favorably with a MWRA sys-
<br /> tem-wide increase of 3.9%. The difference is attributable to a final resolution during calendar year 2016 of
<br /> water system issues in the Town of Bedford which had necessitated substantial flushing and the shutdown of
<br /> certain Bedford town wells. As a result, Bedford purchased unusually large amounts of water from Lexington
<br /> for several years, leading to a spike in our annual MWRA water assessments compared with the rest of the
<br /> MWRA community.' With the resolution of those issues in 2016, Lexington's water usage has dropped back
<br /> to more normal levels, reducing our share of the MWRA assessment. On the wastewater side, our 2.59% in-
<br /> crease compares with a 3.7% MWRA increase system-wide.
<br /> Final MWRA assessments issued in June,typically a bit smaller than the preliminary assessments, are used to set water
<br /> and sewer rates during the Town's annual rate-setting process in the fall. Appropriations for MWRA expenses may be
<br /> adjusted to reflect the final assessments if a special town meeting is held in the fall.
<br /> 2 Lexington re-sells MWRA water to the Town of Bedford on a pass-through basis.Extra FY2015 revenue received from
<br /> the Town of Bedford in 2014 ($275,000) and 2015 ($131,000) as a result of Bedford's well shutdown was set aside as a
<br /> reserve to mitigate the expected increases in Lexington's MWRA assessments for FY2016 and FY2017.
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