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

Selectmen will decide in upcoming weeks how to make up for a projected loss in sewer-enterprise revenue of about $642,000.

Town Manager Richard Montuori during Tuesday's meeting. (Matt Schooley Photo)
Town Manager Richard Montuori during Tuesday's meeting. (Matt Schooley Photo)
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."
malcolm nichols March 28, 2014 at 09:33 AM
Dan, the retirement community actually are one of the few developments where the positives outway the negatives as the elderly place no burden on the school system, and the assisted living rarely drive, etc.... Additionally, I'm told that each unit has to pay the $3000 sewer connection fee and that each unit will be connected to the sewer and pay the water plus sewer rate (this will help lower the the sewer rate). Any negative impacts to the town should have been collected through the development impact fees (see impact report).
Donna Marie Robitaille March 28, 2014 at 09:57 AM
Do not allow them to make up for loss of income from deficit in the sewer fund. Wayne Knight is correct. The BOS have no right to vote on matters of such magnitude. If it is a good idea let the residents decide that. Also,The town manager and town officials could try to get an award grant from the DEP. It is according to water conservation efforts that a town can receive those monies. It has been said that Tewksbury doesn't have as many stars as other cities and towns in order to be picked for such grants. However, I believe there is DEP experts that will agree to give Tewksbury a gold medal for our water and sewer projects if asked. Then we will be in the forefront ,rightfully so, to be chosen. It is an idea worth looking further in to. Please email me at missdonnamarie3@gmail.com if any resident or town official would like to have explanation of this great possibility. We need the money and everyone here in Tewksbury should be working together no matter which side of politics we swing on.
Who Me? March 28, 2014 at 12:07 PM
Someone would need to explain to me how Prop 2 1/2 can be circumvented. Total tax levy can't be raised more than 2.5 % from year to year.
Bob March 28, 2014 at 12:33 PM
Who - Prop 2 1/2 is flawed in that it gave towns 4 "outs" to increase taxes as they "need"/wish... 1. Capital exclusion 2. New Building 3. Debt exclusion 4. Water and sewer debt.
Who Me? March 28, 2014 at 12:59 PM
Thanks for the info Bob.

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