Springfield Water and Sewer Commission Executive Director Joshua Shimmel, Finance Director Domenic Pellegrino and Legal Affairs Director Theo Theocles explain the reason behind a higher than average price in water for the town.
Reminder Publishing photo by Sarah Heinonen
LONGMEADOW — The Springfield Water and Sewer Commission was on hand at the July 15 Longmeadow Select Board meeting to answer questions and clarify the reasons behind a substantial 28.8% hike in the cost of water for Longmeadow.
Longmeadow purchases its water from the Springfield Water and Sewer Commission. Around April of each year, the town is presented with a price for the fiscal year ahead based on its expected water usage and the cost is split into 12 even monthly payments. After the fiscal year ends, the Water and Sewer Commission reviews the town’s actual usage and reconciles it with the estimate. This “truing up” process results in a credit or additional bill for the town, depending on whether the usage was under of over the estimate.
The estimated cost for Longmeadow’s water for fiscal year 2025, which runs from July 2024 to June 2025, is $1.93 million, $433,133 over FY24. Historically, price increases have been significantly more modest.
Springfield Water and Sewer Commission Executive Director Joshua Shimmel said the higher than usual increase is the result of the volatility in debt service interest rates and maintenance costs of the two existing plants that process water from Cobble Mountain. Those plants are “hanging on by a thread,” he said. Meanwhile the commission is making a “generational investment” in a new plant, which means hiring more maintenance and operations staff.
Select Board member Mark Gold asked why the cost of the plant is not a capital expense. Schimmel explained that the debt service is part of a different pool of money than the capital expenses. That said, he assured the board, “We’ve really shook the tree” to get the best possible interest rates in funding the new plant.
Asked if all the commission’s four wholesale customer communities saw the same increase, Springfield Water and Sewer Commission Finance Director Domenic Pellegrino said no. Agawam saw a 26% increase, compared to East Longmeadow’s 26.3% hike and Southbridge’s 26.9% increase. Pellegrino explained, “It’s your volume as a percentage of everybody in the bucket.” Longmeadow uses more water than the other three communities.
Decisions on operations at the commission are made by an executive board of three individuals appointed by Springfield Mayor Domenic Sarno.
With the consistently faltering water treatment plans in use in Springfield, there have been repeated impacts to the water quality. This has included higher than recommended levels of compounds such as HAA5, a disinfection byproduct. Notices are sent to water users when samples show such irregularities. Schimmel assured that compounds are only harmful when consumed over a period of several years “or a lifetime.”
“We’re the mercy of the technology we have and the weather,” Schimmel said, explaining that the stronger and more frequent storms that have accompanied climate change have increased the volume of rainfall over shorter periods of time. This leads to a higher amount of organic runoff. The commission does everything it can to manage the water quality, he said, including using mixers in water storage tanks, testing the raw water source and adjusting levels of chlorine daily.
Gold noted that water rates go up as usage drops because the same sum of money must be raised to operate the system. He asked Schimmel if there was a water shortage in the western part of the state. Schimmel said that, while he cannot speak for other water commissions, the Springfield Water and Sewer Commission has a two-year reserve of water in its reservoir. “Drink up,” he remarked. “We don’t need water use restrictions when we don’t have a water shortage. That hurts everyone.”
The next day, the state Office of Energy and Environmental Affairs declared a mild drought in Western Massachusetts.
Select Board Chair Vineeth Hemavathi said there needed to be greater communication between the commission and the Select Board. DPW Director Sean Van Deusen said he will forward to the Select Board all communication between his department and the commission in the future.
Schimmel repeatedly suggested the town “get familiar with your contract” and that the answers to most questions could be found there. He said the agreement is followed “to the tee.”
Longmeadow has been buying its water from the commission for about 50 years. Town Manager Lyn Simmons later said the town currently has no other water source. “We are preparing to conduct a study to offer a connection with Enfield, but that study has not started yet and if it does come up with a recommendation, the work would be years out,” she said in an email.
Rate for Q4
The Select Board has been weighing what rate to charge water and sewer customers for the last quarter of FY24, which runs from April until June. The bill for the last quarter is calculated and sent out in July — the first month of FY25, despite the water being consumed in FY24.
In 2022, when the water billing cycle was shifting from semi-annual to quarterly, the decision was made to bill FY22’s fourth quarter at the new FY23 rate because the former billing cycle overlapped the fiscal year. Gold has been adamant at the past few Select Board meetings that this was not intended to be a long-term practice.
Based on the cost of water from the commission, the water rate for users would be $4.60 per unit, with a unit equaling 748.5 gallons. This is 22.42% higher than the FY24 rate of $3.76 per unit.
Select Board member Josh Levine said the rates setting needs to be done earlier in the calendar year to avoid it coinciding with the change in fiscal years.
Resident Tom Shea spoke during the public comment period of the meeting, disagreeing with the idea of charging ratepayers FY25 rates for the water used in the final quarter of FY24. Shea provided information to the board and said there was “no logical or rational reason” to use the new year’s rates and opined that Longmeadow residents would be “outraged.”
Select Board member Andrew Lam asked Longmeadow Finance Director Ian Coddington about the impact of charging the FY24 rate. The town would have $209,000 less in revenue for FY25, he said, but it would not overrun the town’s budget, because the hike had not been calculated into it.
Levine described charging the higher rate a “nonstarter” for him. The board unanimously agreed to charge the lower, FY24 rate for the last quarter of the fiscal year.
Mitigating the rate
The board also debated the best way to mitigate the sharp jump in the water rate for users in town. Two paths were charted — the town could use water retained earnings to offset the variable rate or it could increase the fixed portion of water bills, which generally reflects the cost of transmission and infrastructure.
The water retained earnings account has an account balance of $248,395. If the board decided to use $50,000 from the account, the rate would be $4.54 per unit, dropping to $4.48 per unit if $100,000 in retained earnings were utilized. Using $200,000 from the account would set the rate at $4.36 per unit, 15.97% over the previous fiscal year.
Lam and Levine commented on the small drop in the rate in exchange for a relatively large investment from the town’s water reserves. In the interest of laying out all options, Simmons said money from the stormwater retained earnings account, with a balance of $1.2 million, could be transferred and used to mitigate the water rate, but emphasized that she did not recommend such an action.
The fixed cost portion of water bills is tiered based on the size of pipes providing water through the meter. The most common sizes are ¾ inch and 5/8 inch, for which the town charges $4.07 per quarter.
In a comparison to fixed rates charged by other communities in the area, Longmeadow’s rates are among the lowest. Easthampton adds $7 to its bills for a fixed rate every quarter. Hadley charges $16.25 per quarter, while Westfield’s quarterly charge is $25.13 and Agawam bills for $27.50 quarterly. Of those compared, only West Springfield at a quarterly $2.40 and Springfield at $2.85 per quarter are less expensive.
Gold ran the numbers and said raising the fixed charge on the quarterly water bill from $4.07 to $5.36 for the median customer would offset the rate to $4.57 per unit. An increase to a $6.70 quarterly fixed charge would bring the water rate to $4.52 per unit.
Lam said he supported increasing the fixed portion of the bill.
Select Board member Dan Zwirko noted that the consulting company Tighe & Bond was slated to conduct a water rate study “in a couple months” and suggested the board wait until then to set the FY25 water rate. Simmons explained that the study’s findings would likely not be ready for the board to review until mid-September. The FY25 first quarter bills must be finalized in mid-October to be sent out to users in November. That is too short a window to review the findings and implement any changes, she said.
After about three hours of discussion, the board was not ready to set the water rate and continued the discussion to its next meeting on Aug. 12.
