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Wayland board warns of water-enterprise shortfall as $38.2M dual-source project advances
Summary
Consultant forecasts a large FY27 deficit for Wayland’s water enterprise driven by new debt for a $38.2 million dual-source project, ongoing PFAS remediation costs and projected MWRA purchases; the board plans borrowing, SRF outreach and to ask the Select Board to earmark litigation funds for PFAS mitigation.
Consultant Matt Abrahams told the Wayland Board of Public Works on May 19 that the water-enterprise financial model projects expenses will outpace revenues in coming years as the town takes on a $38.2 million dual-source construction project and prepares for future MWRA water purchases.
Abrahams reviewed the model structure, current debt obligations and estimated new debt service, and added a line item for MWRA purchases that he said would become an annual expense beginning in 2030. He said the model currently includes an assumed consumption bump tied to metering but that actual realization may be far lower; board member Judy Ling asked that a 1.06 consumption multiplier be removed before the model is redistributed.
Director Tom Holder warned the board that FY27 will show a large deficit driven in part by new debt and one-time costs, and cited the MWRA emergency connection as particularly expensive. Holder also said an unplanned $57,000 interest payment and a fully expended contingency fund are contributing to the projected shortfall.
Abrahams recommended targeting retained earnings equal to 10%–25% of the operating budget, noting the town’s financial policy recommends a minimum of 25%. The board discussed options for addressing the gap, including conventional borrowing and State Revolving Fund (SRF) financing; Holder said staff will update the SRF Project Evaluation Form and pursue conventional borrowing this summer if needed.
Holder reported other possible sources of aid: a congressional directed spending request for $4 million has been filed with no response yet, and Wayland’s anticipated share of PFAS litigation proceeds totals $2 million over 10 years, of which $660,000 has already been received. Holder suggested sending a memo to the Select Board recommending those PFAS funds be used for PFAS mitigation and the board agreed.
The board and consultant noted that PFAS remediation equipment is leased (lease payments are charged to the operating budget) and anticipated costs for equipment maintenance and repairs will continue until the MWRA connection and other longer-term fixes are in place. The board instructed staff to continue scenario modeling and to work with the Finance Director on year-end and rate-setting decisions.
The board will consider these funding options and related rate implications in upcoming meetings, including a scheduled June 23 water-rate hearing.
