Boston Water Sales Drop Substantially as City Comes to Standstill: MWRA Reduces Rates Significantly for Water, Sewer Base

There seems to be no end to the secondary effects of the COVID-19 virus, and now City officials are at a loss to figure out why water sales for home and commercial ratepayers are down – particularly for Boston.

The MWRA has taken steps to reduce rates this month to help cities and towns handle this year’s coming budget complications, and that will be helpful as the Boston Water & Sewer Commission (BWSC) copes with having lost revenue due to lost water sales.

Water sales for Boston through May 8 were down 13.7 percent, something that was unexpected as people stayed home from work in greater numbers than before and big-water users like Logan Airport and the hotels were shuttered. The same was true in surrounding cities, with Revere down 3.6 percent and Milton down 7 percent. Other bedroom community suburbs like Swampscott (12.7 percent), Winthrop (10 percent) and Stoneham (16.7 percent) showed major water sale increases.

“The question becomes is this a long-term thing or will it settle down and even out,” said Fred Laskey, MWRA Director. “We will want to know if there is a permanent change in the water usage. If Boston and other large communities are down, then it could result in an increase for suburban communities. It’s too early to push the panic button. We are looking at it, as are other communities.”

Laskey said Boston accounts for a major part of the MWRA usage, and it is something very critical to watch.

“The big news is Boston sales are down dramatically,” he said. “The water usage in Boston is the biggest. It’s one-third of our rate because they drive a lot of the usage because of their size. The sales are down and a lot of that we think is indicative of people tele-working.”

Dolores Randolph of the BWSC said they are seeing a significant decrease from large users. The largest users are decreasing usage as much as 97 percent, she said. That includes Logan Airport, which is a major water user and has basically grounded most of the flights and human traffic that usually passes through. The same can be said for hotels, who use a lot of water and are empty for the most part.

“We’re not surprised this is happening,” she said. “We’re looking at it and following the patterns like everyone else. It’s too early to say, but we’re not surprised given the decrease by large users.”

The water and sewer system in most cities, like Boston, is fully funded by ratepayers. If less water is sold, but costs on improvements continue to go up, it could mean a rise in water bills. For Boston, one of the key potential reductions comes due to the slowdown of Logan Airport, which uses a lot of water.

Meanwhile, on May 6, the MWRA Board voted to reduce base rates to cities and towns significantly. MWRA proposed a 3.6 percent increase in February, but with reductions to its operating budget and capital financing, the rate increase, which goes into effect July 1, was lowered to 1 percent. These cuts will not result in any loss of service, and amount to $29 million in reductions through the MWRA membership communities.

“We’re in uncharted waters,” said Laskey. “The finances are up in the air. They’re talking about a state shortfall in funding and local challenges will be apparent too. We thought it was the appropriate time to do this. The thing is we did this early. We usually don’t set water rates until the end of June. These communities wanted to know and we did it early so they could plan.”

In addition, the MWRA agreed to potentially defer over $71 million in community loan payments. That stipulation – which will help communities with cash flow problems – allows them to defer payments on any Local Water Pipeline and Infiltration/Inflow loans with repayments due to MWRA in FY2020, FY2021 and FY2022.

The MWRA also received an allocation this month from the state to help debt service, which is typically used to pay off the Boston Harbor cleanup costs. This year the $891,535 will be directed to communities to help reduce assessments further.

BWSC’s share of that funding came out to $263,122.

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