Woodstock Finance Committee members Jill Davies and Jonathan Spector addressed the Woodstock Selectboard during Monday evening’s joint meeting.
Davies said, “From February to July [of this year], we have built a financial model of the water department. This involves looking at rate structures in other towns around Vermont, looking at account level information from the Woodstock Aqueduct Company, and testing financial structures to ensure we can cover the cost of the Woodstock aqueduct.”
Davies and Spector proceeded to show a series of models that simulate various expenditures and hypotheticals of raising the water bill across residents, second-home owners, and local business establishments.
Davies continued, “We all know that we have a lot of capital expenditure coming at us with the water company. One conclusion that is really important for us to convey is that we cannot fund the needed capital expenditures over the next five years and beyond without raising our rates. This was expected, of course, but our rates do not have to go higher than the Vermont state average. We have been underpaying for our water for a long time and now, by taking ourselves back up to the state average, we can pay for what we need.”
“We reported that collectively, we need to increase costs by 129% across the board to meet operations and capital expenditures of Woodstock water over the next five years,” Davies said. She explained that percentage is the increase of costs without changing access or usage fees or dispersing payment across different Woodstock residents and establishments.
Davies calculated that the average Woodstock resident uses roughly five thousand cubic feet of water annually. Her testing also looked at water usage by bed and breakfasts, schools, and the Woodstock Foundation. “We wanted to see how changes to water distribution affect different people, but our primary focus was on resident costs,” Davies continued. “Through our testing you can see that currently, residents pay around $350/annually for water. By fiscal year 2030, however, that price will need to increase to $811 to lower the capital fees.” The model calculated water rates up to fiscal year 2045, when an increase will still be necessary to lower capital costs.
Davies then walked the board through a number of scenarios based on a set of assumptions hypothesized during the Financial Committee’s last meeting in August. The selectboard had asked the committee to analyze what the projected rate increases would be if option tax revenue was allocated to wastewater fees; what happens if Woodstock charged an additional fee for users that go beyond certain thresholds to encourage conservation; what happens if Woodstock reduces the access fee and increases the usage fee — the access fee being a flat fee every user pays for having water delivered; and the usage fee being a payment directly correlated to the amount of water used; and to explore what would happen if Woodstock charged second-home owners an extra 10% annual fee.
Municipal manager Eric Duffy spoke to the Standard following the joint meeting, explaining potential next steps residents could see. “The selectboard is going to review the potential options outlined by the finance committee, perhaps come up with their own, and then at some point before any water bill goes out to the public, the selectboard will make a determination on how water rates should be created and allocated.”
For more on this, please see our October 2 edition of the Vermont Standard.
