Sewer Debt to be Paid by Hike in Tax Rate or Sewer Rate

One way or another, Tewksbury residents are likely to see a rate increase due to sewer debt in the upcoming months.

During Tuesday night's Board of Selectmen meeting, Town Manager Richard Montuori made a presentation on the town's Sewer Enterprise Fund.

The Town Manager said sewer debt will require town officials to raise money to make up for a loss in revenue through a hike in the sewer rate or they must decide if the money will come from all tax payers through an increase in the tax rate.

Montuori said Tuesday that the town has an estimated loss of $642,842 in revenue this year, and a decision must be made on how to cover that loss.

The reason for the loss in revenue is that residents were charged $3,000 to connect to the sewer system. Those payments were made throughout a five-year period, which ends this year, thus the difference in revenue.

As a result, the average several user would see an increase of $56.06 if no action is taken. But Montuori is exploring another option that selectmen may have.

Without going to a vote among residents, board members have the possibility of shifting sewer debt onto Tewksbury's property tax levy.

If this option were done, the average Tewksbury homeowner (with a home valued at $314,000) would see an increase of $47.10.  A resident with a home valued at $400,000 would see an increase of $60 and a resident whose home is valued at $500,000 would see an increase of $75 on their tax bill for Fiscal Year 2015.

In total, if the shift were made, the tax rate would grow from $16.11 per $1,000 up to $16.26 per $1,000.

No decision was made on which path to choose during Tuesday's Board of Selectmen meeting. Montuori simply wanted board members to know the numbers, and to let them know they may have options. He said selectmen can expect to have this as an action item in the upcoming weeks.

"(Shifting to the tax levy) may not even be something that is viable. I am going to look at it over the next few weeks before a final decision is made," said Montuori. "I would like to wrap this up for next meeting or two so people understand."