Seeking balance on $77m cost of sewer expansion

Town sees 5-part proposal as way to spur growth, but sharing is key

North Andover will ask residents to bear the costs of its ambitions for commercial and industrial growth.

The town has designs on a $77 million sewer expansion project to serve as a boon to its economic vitality, particularly in the Osgood Street corridor pegged as the future North Andover business district.

"If you put in sewers, it determines how much your community will grow," Town Manager Mark Rees said recently.

The cost of the five-part sewer expansion project would fall to the system's ratepayers and individual property owners hooking up to the system, but first it must be approved at Town Meeting, where the cost-sharing breakdown between ratepayers and property owners will also be determined. If the breakdown is anywhere near the ratio that was determined when North Andover switched the septic systems around Lake Cochichewick to sewers, ratepayers can expect their annual payments to double from about $600 to $1,200, according to Cambridge-based SEA Consultants Inc.

The town consultants said that in that multiproject sewer expansion covering more than 20 years, individual property owners handled 20 percent of their hookup costs while ratepayers shouldered the remaining 80 percent. The 80/20 breakdown is exceptionally high for ratepayers compared with those in cities and towns surrounding North Andover, the consultants said, but local officials say the burden is justified because the hookups protect the entire water supply from faulty septic systems.

"The thinking there is it benefits the whole town because it benefits the water supply," said Bruce Thibodeau, director of the North Andover Division of Public Works.

For the latest sewer expansion, if the ratio were changed to a 60/40 split, ratepayers would see a $500 annual increase on top of the $600, on average, they are already paying, according to SEA Consultants. For a 50/50 split, the average annual increase would be $400. Under the 60/40 split, the individual property owners would pay $22,000 to hook up to the sewer system. For a 50/50 split, that amount increases to $27,000.

The onetime sewer hookup fee for property owners is seen as comparable to the average $32,500 cost of replacing a septic system in North Andover.

Local officials say hooking up to the sewer system can reap long-term benefits for property owners. "Houses with municipal services tend to have a higher value than those without," Rees said.

But North Andover may have a hard time selling the 80/20 split at Town Meeting because the public health issues aren't nearly as prevalent as they were for the Lake Cochichewick expansion, Thibodeau said. The main purpose of this expansion is economic development.

The $77 million undertaking has been broken down into five areas. SEA Consultants recommends for the first phase that the Osgood Street corridor and some encapsulated areas south of Lake Cochichewick could be easily incorporated into the existing system.

North Andover's Osgood Street Redevelopment Master Plan calls for more industrial and commercial development. By building sewers along the corridor, the town hopes more businesses will opt to locate there.

"The topography doesn't lend itself to large septic systems, so they are interested in sewer," said Rosemary Connelly Smedile, chairwoman of the North Andover Board of Selectmen. "To bring in any large-scale project, [sewer] makes it easier and more affordable."

The other three areas slated for expansion - Farnum Street, Salem Street/Laconia Circle, and Turnpike Street/Boston Street - are more residential than Osgood Street, but the switch to sewer benefits the town's economic vitality as a whole, Rees said.

With construction prices dropping due to the slowed economy, SEA Consultants has recommended the town move forward with the expansion now, as the $77 million tab will increase with construction prices.

The Board of Selectmen is scheduling a workshop on this issue, and the outcome of that session will determine whether the sewer expansion project goes before Town Meeting when it convenes in May.

At Town Meeting, voters can choose which of the five projects, if any, would be pursued in the first phase, and what the percentage breakdown would be between ratepayers and property owners to cover costs. For a project like the sewer expansion, where money is borrowed, two-thirds of registered voters at Town Meeting must agree.

"We don't want to hit a family with a huge betterment cost of thousands and thousands of dollars, but we don't want the ratepayers to have huge increases either," Connelly Smedile said.

Brad Kane can be reached at brad.j.kane@gmail.com.