HomeMy WebLinkAbout2005-12-13 Board of Selectmen PacketWater Options for the Town of Reading
Presentation to the Board of Selectmen
16 Lowell Street
December 13, 2005
Questions for the MWRA
Overview:
• Please explain the organizational structure of the MWRA
Process:
• Discuss the application process for 100% of water supply
• Estimate a time frame for this process
• Describe history of other communities engaged in this process
• Why were other communities rejected to be 100% MWRA?
• Will MWRA staff be available for consultation?
• Role of MWRA Advisory Board
• Role of the Water Supply Citizens Advisory Committee
Water:
• Discuss water quality issues - safeguards & contingency plans
• Will MWRA add filtration, even if not required to do so?
• Discuss available quantity of water & restricted usage policy
Financial:
• Discussion of elements of the cost of water
• Reserve fund history, current balances, & future plans
• Describe the rate-setting policy & customer inputs allowed
• Anticipated future large water expenditures (e.g. possible filtration)
• Debt management policies
• What are the assumptions about state debt relief?
• Water cost forecast discussion
• Assumption on larger customer base in five years to absorb costs
Impact if Reading loins MWRA for 100% of water supply:
• Describe impact on MWRA communities
• Describe impact on other communities that may wish to join
• Describe impact on Quabbin basin
• MWRA's views of Reading joining as a 100% community
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Hechenbleikner, Peter
From: Fred Van Magness [vanmagness@comcast.net]
Sent: Monday, December 05, 2005 12:47 PM
To: Reading - Selectmen
Cc: Schena, Paula; Hechenbleikner, Peter; woodengr@netzero.net
Subject: Water Treatment Options
Now that I have had a chance to absorb the details from the BOS meeting of Nov. 29, 2005, 1 have a few
comments that I would like you to consider.
Anv decision by the BOS to abandon the current in-house treatment of potable water is, in my opinion,
unconscionable. Isn't anything sacred in Reading any more??? I cannot believe that there is even sustained
discussion within the BOS about going 100% MWRA. There are too many risks, not the least of which is the
inferior water quality of MWRA vs. current Reading in-house oversight/process, for the BOS to subject Reading
residents to a 100% MWRA decision. Our Reading forefathers left all of us a legacy of pure, clean, reliable water.
You cannot aive this uo this ASSET to Readina by aoina 100% WMRA No way fl!
Forget about registration issues. There is no precedent for reductions/eliminations unless you voluntarily
give them up. Don't be spooked by the Ipswich River Watershed folks. The town already acquiesced by switching
a portion of our load to MWRA at significant future cost to residents. Forget about looking for real incremental cost
differences that will drive you to any one decision. As Mr. LeLacheur's fine analysis has pointed out, cost won't be
a final determinant. Move on to "build" options.
As for "build" options, your first choice should be to build on the current water treatment site and buy water from
MWRA on a short term duration basis during construction. Yes, there is some up front cost of demolition, but
incrementally, you will be demolishing the plant in some manner anyway. There are.many advantages, including
not disrupting the existing compost center and avoiding "Not in my back yard" issues with Foster Circle, etc.
The second choice should be the "OLD" compost site. A move to this location or building on the current site will
preserve yet another precious (to many) resource in the town, namely the existing compost center. Either of these
choices also avoids a future Prop 2 1/2 override issue to cover the cost of curb-side pick-up. Reading (town side
at least) doesn't have a successful track record on overrides. Either of these choices also avoids further
burdening residents who will have to pay extra money out-of-pocket for bags to put leaves/grass in should you
move to curbside pickup. And what would residents do with the mountain of brush that ends up at Strout Ave.
should the Compost Center disappear? If you want to look at being environmentally friendly with any decision,
then keeping a workable recycling program seems to be a wise choice. The last and certainly the most
UNDESIRABLE choice from my perspective would be to use the existing compost site. This could be the most
costly option to residents.
As I see the process, I believe the BOS can make a decision now. Yes, it is sometimes desirable to check out the
data. But the process you are embarking upon will bring you more data than you can handle, the data will be
wildly variable, and will delay the decision process as you get into one rework loop after another trying to find an
answer. I have seen prior BOS dwell over issues like this in the past and not take the leadership to move on. This
board can move forward quickly and decisively if you choose.
You have good data now. Financially, there isn't a solid answer that drives one option or another. But there is cost
risk if you go with 100% MWRA. When did a State governmental agency ever keep costs under control Ask
yourselves the question... If we go with 100% MWRA, is the BOS willing to step up and say that any cost
increases above the 7% used in the study will be absorbed by the town operating budget over the 35 years
Of course the answer is a strong NOM So why subject residents to the risk
Seems to me that you need to have a short discussion, move the 100% MWRA option off the table and not waste
any more time with it. Even your Water and Sewer Advisors say to forget MWRA. Nobody I hear from says this is
even worthy of discussion, so why are you prolonging the discussion?? Why not listen to your advisors or, if their
input is not valued enough to make a decision, then dismiss the group as not needed. 2
12/5/2005
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SSACHUS~~
Frederick A. Laskey
Executive Director
MASSACHUSETTS WATER RESOURCES AUTHORITY C - oo
Charlestown Navy Yard
100 First Avenue
Boston, Massachusetts 02129
November 23, 2005
Mr. Ted McIntire
Director of Public Works
Town of Reading
16 Lowell Street
Reading, MA 01867
Subject: Reading Water Supply Agreement
Dear Ted:
1~~(6
Telephone: (617) 242-6000
Facsimile: (617) 788-4899
Please find enclosed five signature-ready originals of the contract for water supply
between the Town of Reading and MWRA. The new contract will be effective for a five-
year term commencing on January 1, 2005.
As you know, on November 16, 2005 the MWRA Board of Directors authorized the
MWRA's Executive Director, on behalf of the Authority, to execute the enclosed Water
Supply Continuation Agreement with Reading. As the next step in the process, please
have the Reading Town Manager execute all five originals and return them to me. After
the MWRA Executive Director's signature has been obtained, two originals will be
returned to you for your records.
If you have any questions, please do not hesitate to contact me at 617 788-1102. I look
forward to a cooperative arrangement for Reading's receipt of water from the MWRA.
S ely,
74-10
Pam Heidell,
Policy and Planning Manager
as s-
® Printed on 100% Recycled Paper
WATER SUPPLY AGREEMENT
'BETWEEN
MASSACHUSETTS WATER RESOURCES AUTHORITY
AND
THE TOWN OF READING
This Water Supply Agreement ("Agreement' ) by and between the Massachusetts Water
Resources Authority ("MWRA") and the Town of Reading ("Reading"), hereinafter jointly
referred to as, " the Parties", documents the agreement and understanding of the Parties regarding
the arrangement whereby MWRA will supply water to Reading from a connection to MWRA's
water distribution main at Meter No.240 to Reading's local distribution system
RECITALS
Whereas, MWRA was created by the Massachusetts legislature in December 1984
to operate, regulate, finance, and modernize the waterworks and sewerage
systems serving the greater metropolitan Boston area. Operating pursuant to the
terms of its Enabling Act, chapter 372 of the Acts of 1984 ("the Act"), MWRA
currently provides water supply and distribution services, and wastewater
collection and treatment services, to certain cities, towns and special services
districts ("Communities") within its service area; and
2. Whereas, Section 8(d) of the Act permits the MWRA to extend its waterworks
system to a new community and to provide the continued delivery of water to the
new community under reasonable terms as determined by MWRA provided
specific requirements are met.
3. Whereas, a regulation entitled "Continuation of Water Contract Supply",
promulgated by MWRA at 360 CMR 11.00 ("the Regulation") define more
specifically the requirements of section 8(d) of the Act and govern the continued
delivery of water by the MWRA to communities purchasing water from MWRA.
4. Whereas, on September 21, 2005 Reading made a formal application to the MWRA to
become a permanent customer of the DCR/MWRA water supply system in order to
supplement its local sources to reduce the impacts of its water withdrawals on the
Ipswich River Basin during low flow periods; and.
5. Whereas, Reading has fulfilled the requirements for membership found in the Act
at Section 8(d), as more fully described in Section 360 C.M.R. 11.07 and 11.08 of
the regulations, and has submitted a Supply Analysis Report, a Demand Analysis
Report, and a Water Management Plan that has been approved by the Water
Resources Commission and has further submitted a detailed description of a local
user charge system and accounting system which meet the Regulation's
requirement for conservation based rates.
aa~
6. Whereas, based on its review of the submittals described in recitals 5 and 6.,
MWRA finds that the requirements of sections 8(d) of the Act have been met as
follows:
(1) the Safe Yield of the watershed system, on the advice of the MDC (now DCR), is
sufficient to meet the new community's demand.
(2) no existing or potential water supply source for Reading has been
abandoned unless the DEP has declared that the source is unfit for
drinking and cannot be economically restored.
(3) Reading has adopted a Water Resources Plan and the Plan has
been approved by the Water Resources Commission.
(4) effective demand management measures have been established by
Reading, including, but not limited to, establishment of leak
detection and other appropriate water system rehabilitation
programs.
(5) a local water supply source feasible for development has not been
identified by either Reading or the Department of Environmental
Protection ("DEP").
(6) a water use survey has been completed which identifies all users
within Reading that consume more than twenty million gallons a
year.
7. The admission to MWRA's water system has been approved by a majority
vote of Reading's town meeting.
8. Whereas, Reading, having received approval of the Legislature, the Governor's
designee, the Water Resources Commission, the MWRA Advisory Board and the
MWRA's Board of Directors; having completed the MEPA process; and having
met the conditions of Section 8(d), and the conditions of MWRA OP #10
Admission of a New Community to the Waterworks System, was duly admitted to
the MWRA Waterworks System on November 16, 2005, thereby acquiring certain
rights and obligations conferred by that admission, and
9. MWRA is undertaking a study to identify measures to improve system operability and
reliability in the Northern Intermediate High Service Area. The possibility of additional
covered storage facilities in the service area, which is being extended to include Reading,
may be investigated.
10. MWRA and Reading wish to formalize their rights and obligations regarding the
supply of water to Reading and therefore enter into this Agreement.
,2a7
NOW, THEREFORE, in consideration of the mutual promises contained herein and for other
good and valuable consideration, MWRA and Reading agree to the following:
1. The term ("Term") of this Agreement shall be five (5) years beginning on January 1,
2006 and ending at midnight on December 31, 2010. It is MWRA's policy that the
initial agreement be for a term of 5 years in order that the Authority may reevaluate and
assess the status of a community's demand management programs under the provisions
of 360 C.M.R. 11.00. It is the practice of MWRA to enter into water supply continuation
contracts upon substantial compliance by a community with the requirements of that
regulation and after completion of negotiations for such renewal satisfactory to the
community and to the MWRA.
2. MWRA shall during the Term of this Agreement provide Reading with water on
an annual volume basis stated in millions of gallons as follows:
2006 2007 2008 2009 2010
219 mg 219 mg 219 mg 219 mg 219mg
and up to 3.8 millions of gallons per day ("mgd") on a daily water volume basis
from May 1 through October 31.
3. Any increase beyond 3.8 million gallons on a daily basis, and 219 mg on an
average annual basis will require a contract revision and a revision to the entrance
fee.
4. The Parties agree that a water supply emergency or other unusual conditions may
be appropriate reasons for Reading to request water in excess of the above-
referenced volumes. At the time of the request, the appropriate process and rate
for Reading to receive water in excess of the above stated volumes will be
determined based on the circumstances presented. Notwithstanding the
provisions of paragraph 3, if Reading decides that it will build a new water
treatment plant at the site of its existing treatment plant, and as a result of that
decision will require a volume of water from MWRA in excess of the above -
referenced volumes, then the Parties agree the appropriate process, fees, and rate
for Reading to receive MWRA water in excess of the above referenced volumes
will be determined.
5. Reading agrees that during the Term it will operate its local water supply system
in such a manner so as to make maximum feasible use of local water supply
sources subject to the limits and conditions imposed by the Water Resources
Commission.
6. Reading agrees to pay the Authority an entrance fee of $3,285,282 for its share of
the value of the waterworks system in place at the time of its entrance. Unless
modified as provided in Section 3, above, the entrance fee will be paid to the
MWRA in accordance with the schedule of payments attached hereto as Exhibit A
and incorporated herein. In consideration of the payment of the entrance fee by
Reading the MWRA agrees to continue to assure a continuation of water supply
to Reading from the MWRA's water supply system in accordance with 360
C.M.R. 11.00.
7. The MWRA shall bill the Town and the Town shall pay to the MWR.A charges for all
water supplied under this Agreement at the MWRA's applicable prevailing rate. All
billing procedures, due dates, and interest charges for late payments shall be in
accordance with the MWRA's standard policies and procedures.
8. Reading agrees that the MWRA shall not be liable to Reading for any disruption
of water supply delivery to Reading attributable to the water distribution systems
of Reading.
9. Reading agrees to pay the full cost of any required upgrades to the connection from the
MWRA distribution system to Reading's water system at meter 240 at the
Reading/Wobum line. The interconnection between Reading's distribution system and
the MWRA Northern Intermediate High system was constructed in 1993 to provide a
source of emergency supply. The existing connection requires the use of a manually
operated valve. The replacement of that valve is contemplated for use of the connection as
a permanent supply to Reading. Any upgrades will be constructed by Reading according
to MWRA specifications and will be owned and maintained by Reading.
10. Reading agrees to continue in effect a full cost pricing system for water received
from the MWRA water supply system.
11. - Reading agrees that during the Term it shall continue the implementation of its
current and proposed local demand management programs, including the
following: participation in MWR.A conservation programs, distribution of
MWRA-provided materials to all water users, compliance With the MWRA's
regulations for town-wide leak detection and repair (360 CMR 12.00),
maintaining metering in 100 percent of Reading's distribution system, including
all municipal facilities, and maintenance of efficient water fixtures in all public
buildings, together with promotion of their use in industrial, commercial and
residential areas.
12. Reading agrees that during the Term it shall not abandon any local source and
substitute for it water from MDC/MWRA sources unless DEP has declared that
the local source is to be or has been abandoned, is unfit for drinking, and cannot
be economically restored for drinking purposes.
13. Reading agrees to continue in full force and effect during the Term its Zoning
Bylaw Aquifer Protection District to preserve and protect existing and potential
sources of drinking water supplies.
14. Reading agrees to cooperate with MWRA in any investigations to locate MWRA
distribution storage facilities in the Northern Intermediate High Service Area to improve
system operability and reliability in the Service Area.
15. Reading agrees to notify the MWRA promptly, in writing, at any time when
Reading becomes aware that a permanent solution which does not include meeting
Massachusetts Drinking Water Standards has been proposed for remediation
undertaken pursuant to M. G. L. c. 21E and implementing regulations (the "MCP")
for groundwater in or hydrologically connected to a aquifer which has been
identified by Reading as a potentially productive drinking water source.
16. Any disputes arising between MWRA and Reading concerning the calculation of
Reading's annual assessment shall be resolved in accordance with MWRA's Rate
Basis Data Review and Dispute Resolution Process. Any other dispute arising
between MWRA and Reading under terms of this Agreement shall be resolved in
accordance with the dispute resolution process set forth at 360 CMR 11.14 and
the administrative procedures set forth at 360 CMR 1.00.
17. For the remainder of fiscal year 2006 (through June 30, 2006), Reading will be assessed
for water supplied at the current prevailing rate of $2,168.56 per million gallons.
Beginning in fiscal year 2007, Reading will be assessed for water in accordance with
MWRA's Community Charge Determination Policy. MWRA's Community Charge
Determination Policy computes charges for water services on the basis of each
community's metered water flows. The MWRA annual water rate revenue requirement
is allocated according to each community's prior year's water use relative to the system
as a whole. The annual rate revenue requirement is comprised of operation and
maintenance (O&M) and capital (debt service) charges.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives.
MASSACHUSETTS WATER RESOURCES AUTHORITY
By: Date:
Frederick A. Laskey
Executive Director
TOWN OF READING
By: Date:
Peter I. Hechenbleikner,
Town Manager
6;~,eje~ / 0
Town of Reading
MWRA Entrance Fee Amortization Schedule
Enter Values Loan Summary
Entrance Fee $3,285,242 Scheduled Payment) $ 252,387.19
Annual Interest Rate' 5.07 % Scheduled Number of Payments 19
Loan Period in Years 2 20 Actual Number of Payments) 19
Number of Payments Per Year 1 Total Early Payments $ -
Start Date of Loan 05/01/20061 Total Interest) $ 1,762,501.84
Optional Extra Payments) $ -
' Interest rate is MWRA blended cost of fixed rate debt as of 09/30105.
2 Entrance fee to be paid in twenty annual installments. First installment due 05/01/06. Balance of entrance fee financed at 5.07% and payable over 19 annual installments.
Pmt Beginning Scheduled Extra Cumulative
No. Balance Payment Payment Total Payment Principal Interest Ending Balance Interest
1 05/0112006 $ 3,285,241.98 $ 252,387.19 $ - $ 252,387.19 $ 252,387.19 $ - $ 3,032,854.79 $ -
2 05101/2007 3,032,854.79 252,387.19 - 252,387.19 98,621.45 153,765.74 2,934,233.34 153,765.74
3 05/0112008 2,934,233.34 252,387.19 - 252,387.19 103,621.56 148,765.63 2,830,611.78 302,531.37
4 05101/2009 2,830,611.78 252,387.19 - 252,387.19 108,875.17 143,512.02 2,721,736.61 446,043.39
5 05/01/2010 2,721,736.61 252,387.19 - 252,387.19 114,395.15 .137,992.05 2,607,341.46 584,035.43
6 05/01/2011 2,607,341.46 252,387.19 - 252,387.19 120,194.98 132,192.21 2,487,146.48 716,227.64
7 05/01/2012 2,487,146.48 252,387.19 - 252,387.19 126,288.86 126,098.33 2,360,857.62 842,325.97
8 05101/2013 2,360,857.62 252,387.19 - 252-,387.19 132,691.71 119,695.48 2,228,165.91 962,021.45
9 05/01/2014 2,228,165.91 252,387.19 - 252,387.19 139,419.18 112,968.01 2,088,746.73 1,074,989.46
10 05/01/2015 2,088,746.73 252,387.19 - 252,387.19 146,487.73 105,899.46 1,942,259.00 1,180,888.92
11 05101/2016 1,942,259.00 252,387.19 - 252,387.19 153,914.66 98,472.53 1,788,344.33 1,279,361.45
12 05101/2017 1,788,344.33 252,387.19 - 252,387.19 161,718.13 90,669.06 1,626,626.20 1,370,030.51
13 05/0112018 1,626,626.20 252,387.19 - 252,387.19 169,917.24 82,469.95 1,456,708.96 1,452,500.46
14 05101/2019 1,456,708.96 252,387.19 - 252,387.19 178,532.05 73,855.14 1,278,176.91 1,526,355.60
15 05/01/2020 1,278,176.91 252,387.19 - 252,387.19 187,583.62 64;803.57 1,090,593.29 1,591,159.17
16 05101/2021 1,090,593.29 252,387.19 - 252,387.19 197,094.11 55,293.08 893,499.18 1,646,452.25
17 05/01/2022 893,499.18 252,387.19 - 252,387.19 207,086.78 45,300.41 686,412.39 1,691,752.66
18 05101/2023 686,412.39 252,387.19 - 252,387.19 217,586.08 34,801.11 468,826.31 1,726,553.77
19 05101/2024 468,826.31 252,387.19 - 252,387.19 228,617.70 23,769.49 240,208.61 1,750,323.26
20 05/01/2025 240,208.61 252,387.19 - 252,387.19 240,208.61 12,178.58 0.00 1,762,501.84
Exhibit A
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