Select Board

The Select Board on Dec. 1 continued detailed deliberations on how to finance the town’s proposed MWRA water connection and related DEP requirements, a project expected to involve roughly $38 million in borrowing. Members focused on a hybrid approach in which the general fund would carry the debt service under a Proposition 2½ debt exclusion, while the Water Enterprise Fund would reimburse the town through water rates.
Finance Director Brian Keveny said the structure would prevent taxpayers from paying twice and protect the general fund if water revenues fall short, but would require voter approval and long-term fiscal discipline to avoid misuse of the excluded-debt levy capacity. He explained that Town Meeting would appropriate the debt service in the general fund, but the water fund transfer, projected at roughly $1.9 million to $2 million annually in early years, would prevent a corresponding tax increase.
Keveny cautioned that to protect the general fund in the event the Water Enterprise Fund could not make its annual transfer, the borrowing would need to be structured as excluded debt under Proposition 2½, requiring a two-thirds vote of Town Meeting and voter approval at the ballot. He said that while this structure protects against a levy-funded default, it creates a side effect by increasing the town’s maximum allowable levy by the amount of the exclusion, which future boards would need to refrain from using for unrelated spending over a projected 10- to 20-year repayment period. Keveny said there is no statutory mechanism to lock away that capacity other than fiscal discipline by future officials.
Town Manager Michael McCall said Town Counsel had advised that the reimbursement arrangement would be treated like other indirect cost recoveries from enterprise funds, similar to how the Ambulance Fund repays the town for debt service on equipment purchases. He added that the debt service would still count against the Water Enterprise Fund’s retained earnings targets because rates would need to be set high enough to cover expenses and rebuild reserves.
Keveny reported that the Water Enterprise Fund’s retained earnings had declined from about $4 million to roughly $1 million, while annual expenses are about $5 million, placing the fund near a 20% reserve level. He said projected increases of $2 million to $3 million in annual expenses tied to MWRA-related obligations would push the fund below the 25% benchmark Moody’s considers healthy, unless rates are increased accordingly. He said the Board of Public Works would need to raise rates not only to cover annual operating costs but also to rebuild reserves over time.
Board members raised concerns about ensuring future Boards of Public Works set rates high enough to cover debt service and rebuild depleted water fund reserves, which have fallen from about $4 million to roughly $1 million. Public Works Director Tom Holder said water rates are already tiered to promote conservation and can incorporate capital costs progressively.
Holder explained that the town operates under a Water Management Act permit that targets 65 gallons per capita per day, independent of the MWRA supply. He said the town’s average daily demand is about 1.65 million gallons, with peak days around 3.5 million gallons.
Under the current planning assumptions, Happy Hollow wells would supply about 85% of demand, with MWRA water providing roughly 15% during peak periods, though the town would be permitted to draw 100% of its demand from MWRA during planned or unplanned shutdowns. He said joining MWRA would not relax conservation requirements, and Holder did not expect overall consumption, and thus revenues, to increase materially.
The board also discussed anticipated PFAS settlement revenues. McCall said the town expects approximately $1.3 million over a multi-year schedule, with about $200,000 already received and roughly $100,000 per year thereafter. He said the funds are unrestricted and could be applied directly to debt service rather than transferred to the Board of Public Works. Keveny said the town could adjust borrowing assumptions to reflect those revenues but noted that prepaying principal is uncommon in municipal practice.
By consensus, members indicated support for a hybrid approach consistent with Keveny’s initial recommendation, pairing an excluded-debt borrowing structure with rate-funded reimbursement and additional safeguards to prevent default and would wait for Town Counsel consultation.
The board unanimously approved multiple 2026 business license renewals and granted two AT&T applications for small-cell wireless facilities at 238 Glezen Lane and near 93 Boston Post Road, subject to public works and safety conditions. Members were also told that MassDOT has accepted recent design changes to the Sherman’s Bridge project, preserving about $325,000 in state assistance.