Town of Stoneham

TOWN OF STONEHAM

MIDDLESEX - No one likes to pay more for water and sewer services.

But in Stoneham, where divided town officials several years ago commissioned a special audit to investigate the propriety of expenditures from its water and sewer departments, skepticism still runs deep when it comes to the rationale for cost increases. So when Town Administrator Dennis Sheehan in the late spring announced the typical Stoneham homeowner could expect their annual water and sewer bills to climb by $126, the Town Hall executive anticipated some pushback.

Yet while Sheehan has largely managed to quell citizen suspicions about the genesis of the latest bill hikes, new questions have arisen about the effectiveness of the town’s Water and Sewer Review Board.

A citizen advisory panel that is supposed to be serving as a watchdog over water and sewer department expenditures, the five-member Water and Sewer Review Board is supposed to host at least one meeting annually to discuss rates before they are set each year by the town administrator.

However, for three consecutive years now, the advisory board, struggling which chronic absenteeism and high turnover rates, has failed to hold that public hearing.

Various town officials, including Select Board member Raymie Parker and Stoneham Finance and Advisory Board Chairman Tim Waitkevitch, have since called for reforms to the advisory board’s charge or a disbandment of the decades-old government body.

"No disrespect to anybody who's giving their time to a committee, but this is the second or third year in a row that they've not been able to come together," said Parker after receiving word about the rate increases last May. "I think we need to have a bigger conversation about what we do with that board to get it going again."

“I don’t know what the sentiment of this board is on reforming, changing, or eliminating the Water and Sewer Review Board. But I do think there’s interest on the Select Board in taking a look at this,” Waitkevitch remarked during a subsequent Finance Board meeting in Town Hall discussion this July.

At Waitkevitch’s suggestion, the Finance Board last month appointed two members to a special subcommittee charged with determining whether to reform the water board or disband it entirely.

Hoping to sit down with Sheehan and Select Board members, the ad hoc group was initially asked to prepare a final recommendation before this October’s Special Town Meeting.

However, Finance Board member Wendy Smith, who has resisted calls to dissolve any government entity that was created by Town Meeting, has since reported that the conversation will take much longer than initially thought.

“Whichever way it goes, whether its keeping [the review board] and getting it staffed or deciding it’s no longer needed, we’re all very open to figuring it all out,” said Smith in advocating for a slower and more deliberative debate over the future of the advisory panel.

Water and sewer charges

Though Stoneham’s town administrator retains exclusive control over setting water rates each year, the Water and Sewer Review Board’s role was thought to at least give voice to citizens by giving residents an opportunity to voice concerns about proposed increases during a public hearing each year.

The board, which consists of two citizen designees from the Finance Board and three from the Select Board, could also refer any objections to rate increases to their appointing bodies.

Prior to this spring, the inability of the Water and Sewer Review Board to meet over the previous two years had been largely ignored because the town administrator had been able to freeze water and sewer rates during the first few years of his tenure. But that all changed in late May, when Sheehan advised the Select Board about his plans to increase rates.

The town administrator explained larger than expected assessments from the Mass. Water Resource Authority (MWRA) has resulted FY’22 water rates climbing from $6.47 to $6.95 per 100 cubic feet of consumption. Meanwhile, sewer rates will jump from $10.22 to $11 per 100 cubic feet.

With town officials saying the typical Stoneham household consumes roughly 10,000 cubic feet of water each year, the average ratepayer will reportedly pay close to $1,800 for water and sewer services in FY’22.

Combined, Stoneham’s MWRA assessment for water and sewer services spiked by 17 percent in FY’22. And with little financial cushion in water and sewer enterprise accounts to absorb that increase, the new charges are being passed directly onto consumers.

Rather than ducking for cover by chastising the MWRA for the rate hikes, the town administrator has refused to characterize the supersize assessments as unfair.

Instead, he insists that the COVID-19 pandemic and the state’s response to it, which forced many to study and work from home for much of 2020 and 2021, sparked huge changes in the typical households consumption.

Specifically, Sheehan pointed out that the MWRA's billing is based upon past municipal consumption habits. And with the state's response to the COVID-19 threat resulting in travel restrictions and prolonged business closures, more Stonehamites were at home rather than at work or school over the previous year.

"The Town of Stoneham saw an increase in water consumption as people left the City of Boston and worked from home. The sewer assessment is also done based on a three-year average," the town administrator said during a Select Board meeting this spring. “We are having some communications with the MWRA about their assessment and we're hoping that some aspect of it might change. But I don't know how realistic [it is to expect a discount].”

Though Stoneham’s Select Board and Finance Board has generally come to accept Sheehan’s rationale for the cost hikes, the town officials insist that the Water and Sewer Review Board still plays a pivotal oversight role. If the citizen panel cannot be reconstituted, say town officials, then the duties of the committee should be handed over to the Finance Board or transferred to a new entity.

Water and sewer rate controversies

Interest in serving on the Water & Sewer Review Board appears to have begun waning shortly after former Town Administrator Thomas Younger in the spring of 2018 instituted the last major hike in rates.

Specifically, Sheehan’s predecessor appeared before frustrated Water and Sewer Board members in April of 2018 in order to advocate for raising water and sewer rates by a combined $4.30 to offset an end-of-year deficit that had climbed to $200,000.

Under the recommendation, which applied for the last quarter of FY’18, water rates jumped from $5.95 to $8.95 in order to recoup an estimated $77,895, while sewer rates will spike from $7.95 to $11.15 in order to plug a projected $117,000 shortfall.

In total, the average ratepayer was expected to pay at least $55 more than first anticipated in their fourth quarter water and sewer bills due to the financial mismanagement.

Rates would then be dropped down to $6.25 for water and $9.34 for sewer services of the entire of FY’19, when citizens would similarly have to shoulder an annual rate increase over the original charges set for FY’18.

Many Water and Sewer Review Board members balked at the staggering increase in rates, especially since some had objected to the town administrator’s proposal nearly a year earlier to reduce water and sewer charges by eating into a $2.3 million surplus in enterprise accounts.

Indeed, Younger had himself reluctantly agreed to slash rates a year earlier after facing pressure from various members of the Select Board, who were dealing with the fallout from a water and sewer department controversy that raged years earlier in 2015.

Under that previous crisis, Town Meeting voters learned in the spring of 2015 that their water rates would be hiked by nearly $1 from $5 to $6 per 100 cubic feet of consumption in order to plug an estimated $800,000 budget shortfall.

Town managers at the time blamed the increase on the planned closure of the Kraft Foods plant, which though situated in Woburn, had for decades purchased all its water wholesale from the Town of Stoneham.

However, various town officials and citizens, skeptical of those claims, later checked MWRA records and claimed that the corporate entity’s water usage, though dropping, could not account entirely for the shortfall.

Former Finance Board Chair Patricia Walsh then combed through personnel records and determined Stoneham’s entire DPW department, not to mention a host of other town hall employees, received at least a portion of their salary from water and sewer department revenues.

In the ensuing weeks, a firestorm erupted over the town’s so-called “indirect” billing practices after other local officials, including past Water and Sewer Review Board members, combed through financial documents and found snow removal and other DPW vehicles were being paid for through the special water and sewer accounts.

Former Town Administrator David Ragucci, though acknowledging the practice should be halted, later insisted that the practice of backloading regular DPW workers’ salaries and equipment purchases onto the water and sewer budget predated his tenure.

That shifting of expenditures away from the regular budget and onto the water and sewer department books reportedly started in earnest back in the mid-2000’s, when the town faced a series of crippling budget crises.

Stoneham has since shifted all rank-and-file DPW workers back into the regular budget - which is largely funded through annual property taxes.

However, news of the irregular financial maneuvering, resulted in a special 2017 audit of indirect water and sewer expenditures. Ultimately, auditors, though agreeing the spending practice was questionable, stopped short of labeling the practice as illegal or prohibited.

In the wake of those findings, several town officials called for another investigation by the attorney general’s office, but those critics were ultimately overruled by the Select Board.

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