This report will provide an overview of Woburn’s water and wastewater infrastructure and review risks inherent within its system. As identified by Woburn, potential solutions to its reliance on an outside water source will be discussed at length.

Introduction

Woburn, Massachusetts is an inland community of approximately 38,000 residents in the metropolitan Boston area. The city is 12.9 square miles, over one-third of which is residential development. Other major land uses include commercial and industrial development and forests. At this point, Woburn is nearly built out with limited room for further development. 

Figure 1: Woburn, Massachusetts context map (source: MassGIS)

Woburn’s median household income is $83,872, higher than the state average, yet over 30% of residents are low to moderate income.¹ The city identifies several populations as being particularly vulnerable to environmental risk, including low- and moderate-income residents, the elderly, children, residents with special needs, the homeless, and undocumented residents.²

Figure 2: MWRA’s water/sewer infrastructure (source: MassGIS)

Physical Infrastructure

MWRA

One of the major water management stakeholders in the Boston metro region is the Massachusetts Water Resources Authority (MWRA), which supplies one-third of Woburn’s water. Established in 1985, MWRA is a public agency and is under the oversight of several federal and state regulatory bodies, yet its functions are largely independent from the state government. MWRA is responsible for supplying full and partial water and sewer services to 3.1 million people and 5,500 large industrial users across 61 Boston-area communities. MWRA’s water supply comes from reservoirs that are owned by the Massachusetts Department of Conservation and Recreation (DCR) and managed by the DCR’s Division of Water Supply Protection.³ MWRA assets include more than 250 facilities. The John J. Carroll Water Treatment Plant, which treats Woburn’s water, is capable of treating 405 million gallons per day and the Deer Island Treatment Plant, which processes Woburn’s wastewater, is capable of treating 1.3 billion gallons per day.⁴ 

Woburn

The City of Woburn also owns and operates its own water utility and sources water from an underground aquifer in the Horn Pond area, which supplies two-thirds of the city’s water. During the winter months, the Horn Pond aquifer has enough capacity to meet Woburn’s water needs; as demand increases during the summer months, Woburn purchases supplemental water from the MWRA.⁵ While Woburn is only partially supplied with water from the MWRA, it relies on the water authority for its sewer services. 

Woburn’s Department of Public Works manages the city’s wastewater and stormwater systems, known as the Municipal Separate Storm Sewer System (MS4).  The sewer system was constructed in the 1890s and updated in the 1960s. Stormwater travels from catch basins directly into the Woburn’s waterways, including Horn Pond and the Aberjona River, with little to no treatment, making these waterways susceptible to household and other environmental pollutants.⁶ Separately, illegal sump pumps remain a problem in Woburn, which have the potential to stress the sewer system’s capacity. There are also roughly 350 properties that rely on septic tanks or cesspools (in the instance of cesspools, improper maintenance may result in wastewater sludge pooling at the surface rather than percolating properly underground).⁷

Figure 3: Woburn’s water infrastructure (source: MassGIS)

Water Rates

MWRA Community Assessment

As mentioned previously, MWRA acts as a wholesaler. The bills, or community assessments, charged to each member community are calculated differently for water and sewer services. MWRA estimates that roughly 45% of the costs charged to its member communities are passed down to individual ratepayers although that varies significantly by location.⁸ Member communities are responsible for setting their own rates for residents to meet MWRA community assessments and the cost of operating their local water and sewer services.⁹   

The water assessments charged to member communities equal the water rate multiplied by metered water use from the previous year. The flat rate per million gallons for FY2020 is $4,021.42.¹⁰ Sewer assessments are calculated with several more considerations and are based on a proportional allocation; the required revenue needed each year is considered either operating costs or capital costs and are calculated differently depending on which cost revenue is allocated to.¹¹ Woburn’s FY2020 Sewer Assessment totals $9,475,387.¹²   

As both water and sewer rates are dependent on estimated revenue needed to cover service costs, community assessments may be adjusted by the MWRA Advisory Board through their budget approval process if MWRA’s expected costs or debt service changes year to year.¹³ For FY2020, water and sewer rates increased by 3.1%.¹⁴  

Table 1: Woburn community assessment, 2019-2021 (source: MWRA)

Woburn’s Water Rates

Rates are set annually once the City Council approves the Mayor’s budget proposal; rate changes between FY2019 and FY2020 were driven in large part by debt service payments and an unexpected increase in consumption of MWRA water following an infrastructural failure within the Woburn water system.¹⁵   

Stormwater-related costs are funded through a tax levy that then makes up part of the city’s Department of Public Works’ budget.¹⁶ Residential and commercial properties are billed differently and at different rates for water and sewer services. Residential properties are billed flat fees for water and sewer semiannually.¹⁷ Residential water rates were $328 and sewer rates were $256.52 in 2018 ($3.36 per HCF for water and $2.61 per HCF for sewer based on an average annual consumption of 98.2 HCF per residential property).¹⁸ Commercial properties are also billed semiannually but on a per use charge as measured by water meters.¹⁹ Water is priced at $4.60 per hundred cubic feet (HCF) and sewer is priced relative to water use for commercial properties.²⁰   

Figure 4: One Hundred Cubic Feet of Water (HCF)

Woburn has historically exhibited resistance to changes to water and sewer pricing (and even installing water meters in the first place). As per a 2006 Administrative Consent Order from the Massachusetts Department of Environmental Protection (MassDEP), Woburn is moving toward installing water meters on all residential properties to comply with monitoring requirements; funding was authorized in 2012 and its Water Department website still lists the project as ongoing.^21,22,23 Woburn’s current mayor Scott Galvin has previously dismissed the idea of converting from fixed to use water and sewer rates for residential properties as recently as 2019.²⁴

Flooding Risk

Woburn’s flood-prone areas are concentrated around Horn Pond and the upper Aberjona River. The 2013 Massachusetts State Hazard Mitigation Plan estimates that there is a greater than 20% chance per year that flooding will occur in Woburn, classifying it as a high-frequency event.²⁵ Should a major flood occur in Woburn, the primary concerns are damage to critical infrastructure including the Horn Pond water treatment plant and pumping station, which are located directly adjacent to Horn Pond, as well as major roadways, and emergency public services. Areas identified as flood-prone zones comprise roughly 1.2% of the city’s total land area and would result in between $10 and 50 million in damage to buildings and other infrastructure.²⁶ Any flood damage has the potential to stress the city’s Water/Sewer Enterprise Fund, presumably the primary source of any repairs (if Woburn does not receive emergency state funding).

While we were unable to find evidence that the Superfund Site in Woburn would cause further environmental problems in the event of a flood (a significant amount of cleanup and soil removal has already taken place), we believe there is potential for the contaminants in and along the Aberjona River to cause environmental risks downstream that could affect neighboring Winchester’s water resources. 

Figure 5: Woburn’s flood zones (source: City of Woburn)

Financial Risk

The City of Woburn uses an Enterprise Fund separate from the municipal budget to track water and sewer-related expenses. According to the FY2020 budget, the Sewer Enterprise Fund was $46,000 in debt and the Water Enterprise Fund was $2.6M in debt.²⁷ Total water and sewer costs for FY2020 are estimated to total $20.8M with $14.2M allocated to MWRA charges.²⁸ Woburn assumes that they are able to collect 92% of water and sewer bills to meet their utility costs.²⁹

The water and sewer budget increased by 6.1% between FY2019 and FY2020 in due to debt service payments but also due to an unexpected infrastructural failure with Woburn’s water utility that caused emergency purchasing of water from MWRA. Because MWRA rates charged to each member municipality are based in part on prior consumption, the rate charged by the MWRA for FY2020 increased by $900,000.³⁰ While Woburn is pursuing reimbursements for costs through its insurer, unexpected emergencies or breakdowns to its municipal water and sewer systems may result in MWRA rate increases the following year and create financial stress.³¹

Problem: Reliance on MWRA

Woburn wishes to reduce its reliance on MWRA water in large part because the charges are so high. The MWRA charges are paid from the city’s Water/Sewer Enterprise Fund, and the fund also has to cover the costs for its own system’s maintenance. As stated previously, unexpected MWRA charges may also change drastically in the event of a water emergency and create greater stress on Woburn’s finances. 

Figure 6: Woburn’s municipal budget and utility funding stream (source: City of Woburn) 

The city has not expressed interest in reducing its reliance on MWRA sewer services and, based on our research, its commercial rates are on par with other MWRA municipalities. Therefore, the following discussion focuses solely on Woburn’s residential water rates and usage.

Proposed Solution: Rate Restructuring

Woburn’s current flat fee water pricing structure and billing system may contribute to its continued reliance on MWRA water service. Flat fee charges fail to provide price signals to Woburn’s residents that would encourage changes in water consumption behavior. There is also significant variation among MWRA member communities in the frequency of billing. While residents of many other municipalities receive water bills monthly or quarterly, Woburn’s residents receive semiannual bills, which discourages familiarity with water bills and levels of water use. Additionally, the fixed fee pricing structure may lead to some residents overpaying if their average annual water consumption is below the municipal average. Additionally, as seen in Table 2, utility charges could increase if Woburn switched to using rate structures in place in other municipalities. 

Table 2: Selected annual residential utility charges (source: MWRA Advisory Board)

Rate Restructuring and Billing Changes

We recommend transitioning to an increasing block rate in order to provide stronger price signals for the true cost of water and billing more frequently to encourage more familiarity with water bills and consumption. It may also have the added benefit of making pricing more equitable for consumers. A reduction of 25% in residential water use would result in a 28% decrease in overall reliance on (and therefore cost of) MWRA water.

Comparison to Peer Municipalities

Among the MWRA’s other member communities that receive full sewer and partial water, Woburn is the only municipality that uses a fixed fee pricing system. This may contribute to much higher annual average consumption in Woburn as compared to other municipalities; in some cases, Woburn’s consumption is a magnitude of an additional 20-30 HCF per year, with a reported average water consumption of 98.2 HCF per year. In 2018, every other municipality used either a relatively aggressive increasing block rate pricing structure or a uniform rate that is set relatively high. Woburn is also the only municipality that prices their sewer rates lower than water rates—for eight of the nine other municipalities that receive full sewer and partial water, their sewer bills are 1.5-2.5 times greater than their water bill.³² Regardless of pricing structure, Woburn has the lowest combined water/sewer residential rates across all MWRA communities (see Figure 7).

Figure 7: 2017 Residential rates for all MWRA communities
(source: MWRA Advisory Board)

If Woburn reduces consumption by 25% residents would use 74 HCF annually, which we think is an appropriate price target. If Woburn adopted the same billing structures as other communities, it’s very likely that it would increase the city’s revenue per household. We think Dedham and Wilmington, which both have several blocks with noticeable price increases, could serve as one model. Canton, which only has two blocks but a significant increase between them, could serve as another model.

Figure 8: Case studies, Annual charge (source: MWRA Advisory Board)

The challenge is that rates need to be low enough to be publicly acceptable yet high enough to incentivize conservation and still cover all system costs. Further, rates that are too high may lead to so much conservation that the city is unable to cover its costs. 

Implementation

To begin to restructure rates, we recommend a phased approach. In Years 1 and 2, Woburn should continue its installation of water meters, as mandated by the state. This should be coupled with a robust water conservation campaign. These preliminary steps will serve as benchmarks to see how Woburn is able to adjust without drastic rate changes and may inform how aggressive rate changes should be in order to meet the 74 HCF price target. In Year 3, Woburn should implement its new rate structure and continue its conservation efforts. Any revenue the city saves could potentially be routed toward improving the water system’s climate resiliency, funding ongoing maintenance, and increasing affordability programs. 

Alternative Solutions Don’t Hold Up

That said, there are other ways to increase municipal revenue, which is the primary motivation for reducing reliance on MWRA.  Woburn could identify alternative water sources, although there are no other feasible sources of water within its borders. It could increase extraction from existing water sources, but this may require infrastructural investment and may not be realistic due to water quality reasons.

Woburn could also raise revenue by increasing property taxes, which already fund 70% of the city budget. The city has proposed doing this, however, Woburn’s mayor has lowered property taxes by 10% since 2014 so raising taxes does not seem like it would be popular. 

By contrast, rate restructuring requires minimal financial investment for potentially substantial results compared to the costs of infrastructure expansion. Any reduction in water consumption will reduce the amount, and thus the cost, of water needed from MWRA. Even if revenue from the city falls because of conservation, it would need less money in the first place for MWRA charges. Further, the mayor has maintained current water/sewer rates since 2010. It may be harder to gain voter support to increase property taxes—after years of cutting them—than it would be to introduce a relatively marginal increase on utility rates that have been unchanged for nearly a decade. A change in Woburn’s rate structure would also align with the city’s existing progressive environmental initiatives, including green energy infrastructure installation.

Additionally, Woburn is forecast to grow in the future. It is unclear if current water sources have the capacity to handle increased growth and the other surface water body in town is a Superfund Site. The city has had to decommission wells in the past due to industrial pollution, so it’s reasonable to assume that reliance on MWRA may actually increase in the future if no action is taken to reduce water use.  

Opportunities for Further Study

Like any water management solution, rate restructuring is not a silver bullet. There is no guarantee that Woburn will see a significant decrease in residential consumption, and 25%–an aggressive target–would only reduce their reliance on MWRA by 28% overall. It also would not affect MWRA’s rate-setting process, meaning an additional water emergency in year X would need to be paid for not only that year, but would also raise the following year’s rates. And since Woburn hasn’t raised rates since 2010, rate restructuring may not be publicly popular. 

A detailed financial analysis and community engagement process would be necessary for the city to better understand whether this is the right solution for them.