The Select Board on Tuesday reviewed the proposed water and sewer rate recommendations for the upcoming fiscal year provided by the town’s consultant in preparation for the board’s June 17 vote.

Matthew Abrahams of the Abrahams Group gave a presentation providing a 10-year projection of anticipated revenue and expenditures. The firm has been providing rate studies for the town over the past two decades.

Abrahams gave an overview of the town’s water budget over the next decade. While the current number is $2.8 million, that amount is expected to triple to $8.4 million by FY 35.

He also mentioned the proposed connection to the Massachusetts Water Resources Authority (MWRA) system, which he described as “a hot topic.” The costs related to the MWRA were included in the analysis.

“Eventually, if and when the town connects to the MWRA, the MWRA will be able to assess the town based on the water that it uses,” Abrahams added, noting that he expects that cost to be about $2 million annually.

The infrastructure cost for the MWRA connection is included in the eight-year capital plan, along with other projects. It contains $45 million in investment.

Abrahams noted that the water budget is projected to triple over the next 10 years, rising from $2.8 million to $8.4 million in FY 35.

The first water rate option Abrahams proposed was presented last year. It anticipated the need to raise the water rate 25% for FY 26, then go up by increments of 7% through FY 30. With the expanded projection time frame, FY 31-35 would go up by 9% each year.

For an average user, the FY 26 increase would raise the water bill from $259.01 to $323.77, a difference of $64.75.

The second option would raise the rate each year over 10 years by 10.5%. For FY 26, users would feel a pinch of $27.20. The average user’s bill would jump to $286.21.

The third option would raise the FY 26 rate by 5%. The average residential bill would rise by $12.95 to $271.96. The burden would be heavier over successive years, peaking at a 15% increase over FY 28-30 before falling to 7.5% for the remaining years.

Member Matt Kizner posed several questions to Abrahams, Department of Public Works Director Kerry Reed, and Water and Sewer Director Eric Carty. A key question he had was why the revenue dropped over the four-year period prior to FY 24, which caused the FY 25 rate hike.

Abrahams said he did not have the data on hand but believed that revenue didn’t keep up with expenses.

He added: “So maybe rate action wasn’t as high as it should have been.”

Kizner responded that the presentation showed no retained earnings by FY 35.

“I don’t want to kick the can for 10 years,” he said.

“That’s why we’re coming before you with the recommendations for the rate changes,” Reed replied.

She explained that the town “got hit with some huge regulatory requirements,” particularly the PFAS water filtration system at Well 6, which depleted funds. Under her direction, the DPW is “trying to take a more proactive approach” with capital investment rather than waiting to fix what is absolutely necessary.

Added Reed: “Our job is to tell you how much money we need, and the charter sets it up so that the Select Board decides what the rates are. Sometimes they don’t always match.”

Member Amy Ritterbusch asked if the recommendations took into account how potential tariffs might affect capital projects. Reed said they did not because there is no way of knowing.

She favored the steady rate increase. This was also the recommendation of the Water & Sewer Advisory Board, which chair Paul Gallagher presented later in the meeting.

Reed said she preferred the 25% option for FY 26 to “do the investment now.”

Sewer rates to go up

The three options for the sewer rates showed more modest increase rates.

The first model showed a 7.5% increase for FY 26 and 27. It would double to 15% from FY 28-30 and then go to no increase. The bill for the average residential user would go up by $31.80 to $455.77 from $423.97.

The second plan would lessen the impact in FY 26. It proposed a 5% increase for the average residential user, with the bill going to $445.17. The rate then would increase annually for three years, go back to 5% for FY 30, and then go flat for five years.

The third option would raise the rate by 10% each year from FY 26-31. Then it would revert to no increase for the remaining years.

Hopkinton’s rates will be impacted by Westborough’s $17 million in capital investment over the next decade. Hopkinton outsources much of its sewer flow to Westborough, which will impact the sewer rates. The projected impact to Hopkinton is expected to be between $50,000-$70,000 annually beginning in FY 27.

Kizner again questioned how this would affect “long-term sustainability” for the town, saying it “feels like a recovery plan.”

Member Brian Herr, who chaired the meeting in the absence of chair Joe Clark and vice chair Shahidul Mannan, asked why the WSAB was not seated at the table with the consultant and town staff. Kizner took it one step further, asking why a consultant was needed with the WSAB in place.

Ritterbusch explained that the WSAB is relatively new and that these two processes were meant to be kept separate.

Gallagher said that the WSAB recommends a flat 10% increase over the next 10 years.

He added that the WSAB is trying to look at other options to handle Hopkinton’s water demand, such as potentially buying more water from Ashland. He cautioned the Select Board that the intermunicipal agreement that the town currently has with Ashland will expire in about a year, years before MWRA water will become available.