Questions Raised About Reliability Of Projected Sewer Figures

By: Ryan Bray

Topics: Orleans news , sewers

The Orleans Select Board was presented with sewer rate projections at its March 16. The board expects to vote on a rate to bring to the annual town meeting by the end of the month. RYAN BRAY PHOTO

ORLEANS – Sewer rate projections were presented to the select board last week, but members questioned how those numbers will hold up once the town's new treatment plant and wastewater collection system is up and running.

The 1,105 anticipated sewer users downtown are expected to begin tying into the system in September when the new plant on Overland Way goes online. Tom Daley, the town's public works director, said March 16 that a phased approach was taken in calculating the projections, with the expectation that half of those eligible will tie into the system over the next seven years.

The DPW worked with the consulting firm Raftelis in drafting the projections, which are based on assumed usages of 16,000 gallons per day in fiscal 2023, 20,000 gallons per day in fiscal 2024 and 25,000 gallons per day in fiscal 2025. Those numbers are based on usage at the former tri-town treatment plant before its closure in 2015.

"We feel those are good numbers, and fairly conservative," Daley said.

Dave Fox of Raftelis said users will each be assessed a flat quarterly fee of $50. The rate per 1,000 gallons would be $6 in Fiscal Year 2023 and would increase by a dollar a year, according to the projections. By fiscal 2028, the last year in the projected forecast, users would be paying $11 per 1,000 gallons of septage.

The fixed quarterly fee would be paid by property owners connecting to the system, regardless of whether they use it or not, noted Michael Herman of the select board. Daley said there are costs associated with the connection, regardless of use.

"It costs money to have the utility in the street," Daley said. "That's what it comes down to."

An annual appropriation of $1.5 million from the town's wastewater stabilization fund is being used to help offset operational costs. Fox noted that debt will not be collected on the project until fiscal 2025, freeing up stabilization money for the 2023 and 2024 fiscal years to help keep costs down and ease users into future rate increases. He presented a "worst case scenario" where there is no projected build out in the system, in which case users would be charged $14 per 1,000 gallons of septage by fiscal 2028.

"The reason we're able to phase into that $14 instead of getting there in one fell swoop in the first year is because we're utilizing that wastewater stabilization funding," he said. "The reason you have a stabilization fund is to stabilize rates."

The median annual sewer bill in Orleans is expected to be $416 for fiscal 2023, which Fox said includes the $250 application fee to connect. A chart presented as part of the March 16 presentation showed that figure to be higher than rates paid by customers in Chatham, Falmouth and Barnstable, but considerably lower than those assessed to users in Provincetown and Bourne.

"We're in the realm of reasonableness compared to other communities," Fox said.

"For the most part, the logic behind this makes a lot of sense," Finance Director Cathy Doane said of the projections. "It's easy to follow, easy to read."

But how accurate are the numbers? That was the question raised by select board member Mark Mathison, who pointed to sewer revenue projections of just over $1 million by fiscal 2025.

"I'm looking at a million dollars plus in revenue that may or may not be there, and I think we need to be aware of that from day one."

If annual sewer revenues are less than anticipated, Mathison said, it could be put upon users to make up the difference with higher rates.
Mathison also had questions about whether or not the town can count on the same fleet of septage haulers to service the new plant that once served the tri-town facility. Daley said there has not been any "deep analysis" looking at the availability of haulers, but said that the new plant will have plenty of capacity.

"I don't think it affects the big picture all that much," he said of the haulers. "A little bit? Yes it does, but I think we'll be competitive."

Tom Parece, the town's wastewater consultant with AECOM, said he has had conversations in the past indicating that haulers would be willing to service Orleans at the same rate offered through tri-town. But those conversations took place back when the tri-town plant was closing.

"We don't know if they're still here," Mathison said.

Select board members asked that efforts be made to identify how many haulers might still be willing to service the new plant.

The biggest influence on user rates will be the number of people who tie in to the new system, Daley said. The more people who tie in, he said, the less users will have to pay.

"We want to use our infrastructure," he said. "We want to encourage people to tie in as much as possible, because it helps the rates."
Daley also encouraged sewer users to act fast to hire an engineer to assist with their connection, noting that demand will be high as September approaches.

The report did not differentiate between residential and commercial users in the downtown sewer area, but Select Board Chair Mefford Runyon said it would be good to see that broken out.

"That's something we could produce for you," Fox said. "It would show each individual potential customer, who they are, where they are and what their potential bill would look like."

The select board is waiting on a vote from the board of water and sewer commissioners recommending a sewer rate. That recommendation is needed before March 30 in order to get an article onto the warrant for the annual town meeting in May to approve the rate, Town Administrator John Kelly said.

Doane cautioned against setting the rate too low to start. Otherwise, users could be hit with a significant increase should the rate need to be adjusted.

"Because we don't have any history, if history proves that the rates aren't high enough, we don't want to see a substantial increase," she said. "We'd rather smooth it out."

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