The Water/Sewer Advisory Board (WSAB) on Wednesday heard a review of three proposed options for the town’s water and sewer rates for fiscal year 2026 in order to provide a recommendation to the Select Board.

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.

Instead of the usual five-year analysis, Abrahams extended his study for 10 fiscal years. He noted that the town is facing water challenges because of the current drought and declining well water reserves. The expense of connecting to the Massachusetts Water Resources Authority system that was pursued to meet the increasing demand is estimated at $33 million over two phases.

Construction costs for the infrastructure to connect to the MWRA will be considerable over the next five years, he said. In addition, the MWRA will assess a fee based on the amount of water drawn after the first year. Abrahams expected this number to be about $1 million initially and up to $2 million annually after that.

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 then switched to FY 25, when the Water Department faced a large revenue deficit and did not have retained earnings to cover its expenses. Several capital requests approved at the FY 24 Annual Town Meeting could not be funded, so they had to be rescinded and requested again at the May 5 Annual Town Meeting, where they were approved. The deficit prompted a 40% water rate increase for FY 25.

In contrast, this year’s revenues were “very strong,” giving the town the flexibility to consider multiple options, he said. But he cautioned that reserves need to be increased to buffer the upcoming expenses. Projected FY 25 revenues are estimated at nearly $3.8 million, with expenditures of over $2.63 million. For the upcoming fiscal year, the $2.8 million budget was balanced without having to use retained earnings. About $175,000 in retained earnings was used toward funding capital expenses, in combination with free cash of around $546,000 that will be paid back over two fiscal years.

Water rate options presented

The first 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.

Abrahams noted that the projections were based on the town “getting all of your water from the MWRA.”

“It’s great to see the 10-year lookout,” said WSAB chair Paul Gallagher. “One of the things we’ve been worrying about as a committee is the impact of the operating cost and the assessment from the MWRA if we’re buying all of that water.”

While he seemed to favor the level-increase plan, he suggested that board members not make a recommendation at this meeting until they have had a chance to review the options more thoroughly. The WSAB will meet again on May 21 at 5 p.m. to discuss its recommendation, if any, for the water and sewer rate proposals. Recommendations are due by May 28 to be included in the Select Board packet for June 3.

Sewer rate headed up

Last year, the Select Board voted not to raise the sewer rate. This might change now because of Westborough’s infrastructure investment.

Abrahams said Westborough, which takes “a decent amount” of Hopkinton’s sewer flow, will be investing $17 million in capital over the next decade. This likely will affect Hopkinton’s future sewer rates. He anticipated Hopkinton will face a charge of up to $75,000 annually beginning in FY 27. This was incorporated into the three suggested sewer rate proposals.

He added that while the budget is not expected to increase significantly, the revenue will not be able to keep up.

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 would then 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.

MWRA connection discussed

The MWRA connection was brought up as a factor in the rate decisions.

Abrahams mentioned that another town he works with is considering a hybrid option where it would use locally sourced and MWRA water. The WSAB raised this as a possible option at a previous meeting.

Gallagher noted that the town currently buys 40% of its water from Ashland. While he clarified that the MWRA connection should go through as an option to use as needed, he suspected that buying water from Ashland would be “a hell of a lot cheaper.”

“It looks like we don’t have a choice,” WSAB member Don Sutherland said of the MWRA connection.

“We have to do something,” replied Kerry Reed, the Department of Public Works director. “We can’t produce enough water. We have choices on how we do that, but none of them are cheap.”

Abrahams noted that Hopkinton has “heavy water usage during the summer” because of watering lawns. The town has prohibited outdoor water use while it is experiencing a drought.

Eric Sonnett suggested doing an assessment of the town’s wells to see how the town can use its resources.

Said Sonnett: “Why would you trade cheap water for expensive water?”

WSAB member Rob Scott stressed that Well 1, the second-highest-producing well in town, is “losing 100 gallons a minute.” The other wells are strained, he told the Select Board in March.

When Sonnett suggested “getting as much as we can from Ashland,” Reed reminded the board that the intermunicipal agreement with Ashland ends June 3, 2026.

Said Reed: “It might behoove us all to remind the Select Board.”