Engineers recommend modest water increases, larger sewer hikes to restore reserves; board asks for build-out and I&I analysis

Underwood Engineers presented the town’s annual water-and-sewer rate review at the Wolfeboro Board of Selectmen meeting Feb. 5 and recommended modest, phased increases for water but larger, catch‑up increases for sewer to restore fund health and meet capital needs.

Keith Pratt, president of Underwood Engineers, and Steve Randall, the town’s director of public works, reviewed the utility models, historical rates and projected capital outlays through 2027. Pratt said the firm used the 2025 budgets as a baseline, applied conservative operating-cost growth assumptions (5% in 2026 and 2027 for modeling purposes), and included planned capital items such as Crescent Lake water-main work and several sewer pump‑station and South Main sewer projects.

Pratt reported that unaccounted-for (non‑revenue) water is roughly 30% of plant production — higher than industry goals — and that sewer infiltration and inflow (I&I) is running about 47%. The consultants also said a target of six months of operating expenses in reserve is prudent; Underwood’s model estimated reserve targets of approximately $930,000 for the water fund and $670,000 for the sewer fund.

To move toward those targets, Underwood recommended a 2% water-rate increase for 2025 and two subsequent 2% increases (2026–2027). For sewer, to recover a recent operating deficit and rebuild reserves, the firm recommended a 7% increase in 2025 and 5% increases in 2026 and 2027. Pratt noted that “every 1% rate increase generates about $16,000 on water and about $11,000 on sewer” in the town’s model.

The presentation included sample-bill calculations using Wolfeboro’s typical consumption (estimated at 106 gallons per day): under 2024 rates a typical household would pay roughly $500 annually for water and $675 for sewer; the proposed increases would raise those sample annual bills to about $541 for water and $720 for sewer. The presenters also compared Wolfeboro bills to statewide benchmarks (state averages are based on a standardized 247-gallon usage), noting differences in consumption assumptions and the need to normalize comparisons.

Selectmen focused questions on several items: the board asked for a projection that ties specific capital projects and I&I remediation work to expected reductions in unaccounted-for water and sewer I&I; asked for a build‑out/capacity analysis to show how many additional hookups or what capital investments would be necessary to reach different financial stability benchmarks; and raised equity questions about general-fund contributions. Board members noted the general fund currently pays roughly $324,000 per year for hydrant/fire protection and that the general fund also covers some sewer capital/debt service; members asked staff whether debt allocations to the general fund could be shifted to users or otherwise restructured.

Underwood and staff said they will update the model and return with proposed rate changes and a formal warrant-ready schedule at a future meeting (the board discussed scheduling an update in March). The board also asked the consultants to provide scope language for a build‑out/capacity analysis and to include the likely timing of projected rate changes so the board can review final rates before any formal adoption.