Special Board of Aldermen 10-27-2020 Page 4
Unidentified Speaker
Oh it’s happening right now.
Director Fauteux
Could you, thank you. If everybody could please while not speaking because we have a lot of interference,
thank you.
Vice President O’Brien
Thank you, Director Fauteux.
Mr. Ayotte. And in this particular slide, I’d like to offer a comparison of Nashua’s residential sewer rates
with selected regional rates. And what you can see for 2020 based on the typical water consumption of 20
CCF, which is hundreds of cubic feet. You see Nashua’s quarterly bill as it compares to Manchester,
Concord, Keene, Portsmouth and some selected Lowell, Massachusetts, is really on the bottom in
comparison to all these cities and towns with respect to your current rates. And even the 2018 Nashua
State Average Quarterly bill is significantly higher.
With respect to the proposed sewer increases from ’21 to ’23, at this time a 20% increase in sewer user
fees in 2021 is being recommended, followed by a 15% increase in 2022 and no increase 2023. And as
you can see here, even in 2021 to 2023, that line here in the middle that’s bolded out, $94.97 and then in
2023, 2022 — there’s no increase in 2023, it’s $109.22. If we go back to the previous slide $129.22 is still
relatively cheaper than Keene, Portsmouth and some of the other cities and town. And that doesn’t take
into account what any future increases Manchester might be looking at, it’s ratepayers in those future
years.
So how is this considered from an affordability perspective? Well the EPA does have an affordability metric
and it uses 2% of the household income as the threshold for what is considered a sewer bill affordability.
And what we did was we analyzed the household income of, based in quintiles, of all your residents in that
regard. And notice on the 20" percentile, which is your lowest income residents, even in the years 2022
and 2023 as a percent of household income at 1.4% it is still well below the 2% metric that the EPA
considers affordable.
So what are the primary drivers of the required increase? Well, it is to fund the Annual Debt Service which
is projected to increase from $5.1 million in 2020 to $8.4 million in 2025 which is about a 10% average
annual increase as well as annual operating maintenance expenditures which are increased at a modest
rate of 3%. | got a note here that when we did this analysis, Nashua does an extremely good job of
keeping a lid on annual O&M expenditures. Some would consider 3% almost a cost of living increase in
that sense, so very well done there. And where is your source of revenue coming from? Well 94% of the
Wastewater revenues are really derived from the user fees and only a small amount is collected from the
permit fees. So it’s really the user rates that is the lion’s share of your revenues.
So what are the major capital expenditures that you know these rates will be funding? Well there’s up to
$52 million dollars in upcoming capital investments, required from 2020 to 2025. And a lot of this is age of
equipment as well as EPA mandated type projects. Pump station rehabilitation at $10.8 million, a CMOM
Plan which stands for Capacity, Management, Operation and Maintenance of your collection system. It’s a
collection system plan that allows you to clean all your collection system pipes, the main interceptors,
assess the condition of those pipes and whether or not they need to be lined or even replaced depending
on the overall condition. And then the sewer infrastructure program, $30 million over 6 years is really to fix
those pipes. There’s Wastewater Treatment primary tank upgrades at $3.9 million, (inaudible) removal,
and storage facility at about $1 million. The booster pump stations for wastewater just under $1 million.
