Select Board adopts FY27 water rates after Abrams Group presentation; base charge up 12.6% and usage rates up 9%

The Town of Southborough Select Board voted to adopt a water rate package for fiscal year 2027 that includes a 12.6% increase to the base charge and a 9% across-the-board increase to tiered usage rates after a presentation by the Abrams Group and a lengthy board discussion about capital projects and system losses.

Matt Abrams of the Abrams Group presented the analysis used to recommend the rate plan, explaining that the water enterprise fund operates separately from the tax base and must cover both operating and capital expenses from rate revenue. Abrams reviewed recent changes — noting a 15% rate increase adopted last year and an FY26 base-charge dip tied to a one-year methodology adjustment — and presented five-year projections that target retained earnings equal to 20% of expenses.

Abrams also flagged three developments that changed this year’s projections: unusually high usage and revenues in FY26, a 300,000-gallon-per-day credit in an agreement with the Massachusetts Water Resources Authority (MWRA) that is due to roll forward but expires this year, and growth in the capital plan that now includes smart meters and other projects. “All of our projections in here assume that that agreement will continue,” Abrams said of the MWRA arrangement; he told the board MWRA told staff it will notify members six months prior to expiration.

Board members probed the capital plan, asking whether the smart meter implementation (listed in the plan at about $1.5 million to be funded with 0% MWA loans) could be deferred, whether targeted hydrant-monitoring or leak-detection deployments could reduce unaccounted-for water (staff reported more than 20% in recent years) and how debt-service timing affects short-term bills. Water staff said the town typically hires leak-detection firms and that the town’s unaccounted-for water is above industry norms; the board discussed lower-cost pilot projects (hydrant sensors or selective deployments) as possible early steps.

Abrams presented the recommended option to keep the FY27 rate change at 9% and implement a 12.6% base-charge increase under the town’s adopted methodology; under that plan his team projected a modest build-back of retained earnings over the five-year horizon. He showed sample quarterly bills for an average residential customer: roughly $156 per quarter under FY26 assumptions rising to about $172 per quarter under the FY27 proposal. “If you were to adopt what we have here…we think that you'd be looking at a 10% next year,” Abrams said, describing the multi-year path needed to restore reserves to target levels.

Following the presentation and discussion, a board member moved to adopt the recommended FY27 rate package (12.6% base-charge increase and a 9% rate increase across tiers); the motion was seconded and the board voted in favor. Staff confirmed the practical effect for customers and that the new rates will be reflected in upcoming billing cycles. The board also asked staff to continue evaluating targeted leak-detection approaches and to report back on options for smart-meter funding and phased implementation.