Budget and Finance

As we start a new calendar year the Lancaster Sewer District Commission (LSDC) has been evaluating our finances to overcome the pressures presented by the challenging economy.  Over the last five years, the LSDC’s base operating costs have grown by approximately 24%.  This increase is directly correlated and is offset by a 26% increase in our customer base.

However, while the increase in operating costs has been manageable and controllable, there have been increases in other expenses that are beyond the LSDC’s control.  The largest increase in costs over the last five years is the amount paid to the Massachusetts Water Resources Authority for wastewater treatment.  This cost is set annually by the MWRA and has increased by nearly 50% from $118,000 to $176,000 since 2006. 

An additional increase in the LSDC’s budget has been the inclusion of debt related to the 2005 authorization by the voters of the District to fund the repair and upgrade of the District’s oldest pump stations.  The debt from this upgrade was included in the LSDC’s budget starting in 2008.  This debt service, along with the increases in the MWRA annual payments, has increased our annual budget to a point where the District now must raise rates to cover expenses.

After a series of rate hearings held in January and February this year, a new rate of $.055/CF was approved.  This new rate will go into effect in the 3rd billing quarter of FY2010 which ends on April 30th.  An average residential customer can expect their sewer bill to increase to approximately $72 per quarter.  The minimum sewer bill will be $38.50 per quarter.

The LSDC continues to explore other ways to reduce our costs recently making changes to our utility agreements and by reducing contract labor.  Our current budget for Fiscal Year 2010 is as follows:

• MWRA Treatment Costs
$204,000 - Annual cost of treatment paid to the MWRA to treat and discharge sewage originating from the LSDC.  This charge is adjusted annually by the MWRA.

• Pump Station Upgrades

$94,000 Processing and payment of debt service authorized in 2005 for the repair and upgrade of the District’s oldest pump stations.

• District Office

$105,000 The amount budgeted for annual office expenses including contract labor, insurance, communication, and rental fees.

•  Annual Maintenance

$54,000 The amount budgeted for regular and unplanned maintenance and emergency repairs.

•  Utility Costs

$20,000 This is the cost of utilities needed to run the pump stations and other facilities in the District.