ORLEANS — When it comes to apportioning sewer betterments, selectmen want to go with the flow.
Presented with three options for assigning the cost of building the downtown sewer collection system (the treatment plant and disposal area will be paid for on the tax rate), the board voted 4-0 Dec. 12 to recommend using a property's water usage rather than its assessed value. The chosen method will require town meeting approval and a special act of the state legislature.
Finance Director Cathy Doane's report on the options found that costs would be shifted more to non-residential properties if assessed value were the determining factor, while using a uniform sewer unit would find residential properties “subsidizing non-residential properties.” The “most equitable distribution of costs” based on the burden placed on the sewer system turned out to be water usage.
The analysis by Doane and the town's consultants made some assumptions: receipt of a 30-year SRF (state revolving fund) loan at no interest for construction costs plus a 20-year loan at 4 percent interest for ineligible SRF costs and a 2 percent interest rate charged on betterments not paid in full at the time of assessment. The options were based on a total betterment amount of $13,002,163.
Under the uniform sewer unit method, which the board did not recommend, there would be 701 residential and 605 non-residential sewer units in the downtown area. Dividing the $13 million by 1,306 total units yielded a per-unit betterment of $9,955.71. With this method, non-residential properties would be responsible for $6,023, 207, or 46.3 percent, and residential properties $6,978,956, or 53.7 percent.
Another option not recommended by the board would have used $249,949, the 2015 average assessed value for downtown residential property, to represent one sewer unit. Residential and non-residential properties would be assigned sewer units based on their assessed value relative to the residential average of $249,949. That would produce 1,343.22 sewer units, 584 residential and 759.22 non-residential. Dividing the $13 million cost of the downtown collection system by the number of sewer units yielded a per-unit betterment of $9,679.85. This method favored residential properties, which would pay a total of $5,653,012, or 43.5 percent, while non-residential properties would pay $7,349,152, or 56.5 percent.
The option recommended by the selectmen is based on water usage. Using 2014-15 data, Doane and the consultants identified the average daily water usage for downtown residential properties as 73.86 gallons per day, which they assigned one sewer unit. That produced 1,981.26 sewer units (700 residential, 1,281.26 non-residential) and a per-sewer unit betterment of $6,562.57.
As an example, the finance director looked at a downtown residential property with daily water usage of 52.56 gallons per day, less than residential average of 73.86. That property's betterment would thus be based on 0.71 sewer units, for a total of $4,670.
The cost-share breakdown under this scenario would be $8,408,373, or 64.7 percent, for non-residential properties and $4,593,790, or 35.3 percent, for residential properties.
Examples showed how individual properties would be affected using all three methods and a 30-year payment schedule. A residential condominium owner whose unit was assessed at $142,000 and had daily water usage of 52.56 gallons (1 sewer unit) would pay an annual betterment of $435 under the uniform unit system, $240 if assessed value is used (0.57 units), and $204 if water usage is the determining factor (0.71 units). The figures for a single family home assessed at $407,700 with 84.52 gpd water use would see annual betterment options of $435 (1 unit), $689 (1.63 units), or $328 (1.14 units).
A commercial condo assessed at $201,500 with water usage of 24.17 gpd would pay respective annual betterments of $435 (1 unit), $341 (0.81 units), or $94 (0.33 units) under the three options. A downtown restaurant with an apartment assessed at $424,600 with water usage of 1,390.68 gallons per day would make annual payments of $2,174 (5 sewer units), $718 (1.7 units), and $5,396 (18.83 units). The shopping center that includes the Main Street post office was assessed at $3,053,300 and recorded water usage of 579.56 gallons per day. Under the uniform unit option, it would pay $870 annually (2 sewer units), $5,164 (12.22 units) if assessed value was used, and $2,249 (7.85 units) under the water usage option recommended by the selectmen.
“I understand the equity of this,” Selectman Mark Mathison said of the water usage method, but he cautioned that “I can see situations where businesses are using water that they're not putting back into the sewer system: washing boats at the marina, washing cars at a car wash, or making beer, or running things through a system where they recover the water and reuse it to some extent. There are legitimate uses where you have water coming through the meter that is not going through the sewer system. Can we build in provisions so we don't put people out of business because of the bill they pay for water?”
Tom Parece of consultant company AECOM said the town's new cellular meter system should provide better data on water usage. He said other communities in Massachusetts have found ways to address “outliers who use a lot of water but it doesn't go down into the system,” and that this could be addressed in the required special legislation.
“I think we've got outliers at both ends,” Selectman Kevin Galligan said. “We want to make sure we do it right. In addition to the high-end users, there are those on the low end.”
Saying he agreed that “what's left in front of us is to deal with outliers on the high end and low end,” Selectman Mefford Runyon noted that commercial high water users “also pay more for the water to begin with. When the system is in place, they will pay more for the flow to the treatment plant.”
It's time, Galligan said, “to start getting information out to people... I have a feeling some folks, in particular businesses, don't even know what they use in water today.”
Mathison said that “issues raised tonight suggest perhaps a minimum fee or maximum fee to take care of outliers. That needs to be formalized and put in writing.”
Selectmen Chairman Alan McClennen summed up just before the board's vote. “What we are trying to do in this process,” he said, “and I think we're there, is provide equitable betterment fees. As some people have said publicly, we're trying to be compassionate, equitable, decent and just.”