North Shore Sewer Rates Could Double Amid Wastewater Cost, Infrastructure Pressures

BEVERLY, MA — The South Essex Sewerage District is seeking special legislation as the regional utility faces rising operating costs and a long list of infrastructure needs that it says can no longer be managed within Proposition 2½ limits.

SESD, established in 1925, provides sewer conveyance and wastewater treatment services to Beverly, Danvers, Marblehead, Peabody, Salem, and portions of Middleton and Wenham, serving about 190,000 residents.

SESD is seeking about $390 million in investments over its first 10 years.

SESN representatives have made the rounds, briefing City Councils and Select Boards on the ominous cost forecasts and need for action in recent weeks.

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"SESD remains committed to protecting public health and preserving the quality of our region's waterways," said Michael Parsons, SESD Board Chair. "These legislative measures are essential to ensuring we can continue to meet our mission for decades to come."

SESD said a financial analysis by the UMass Collins Center indicates assessments to member communities would approximately double over the next decade.

Communities can address those increases through sewer rate adjustments or property tax increases, with projected annual rate increases averaging between 6% and 12%, according to the SESD.

The district said it has held operating budget increases to 2.5 percent or less annually for nearly three decades while keeping overall community assessments flat as debt service declined.

But SESD said it now faces two major funding pressures that exceed those limits. It anticipates it will be unable to produce a balanced budget within Proposition 2½ limits for fiscal year 2028.

One major pressure is the cost of residual disposal, which SESD said now makes up about 20% of its operating budget. The district is entering the final year of a long-term contract for that work, and when it is rebid this winter, costs are projected to rise by $1.4 million to $2.2 million annually because of market conditions and regulations related to PFAS.

SESD also cited rising healthcare, energy, and material costs that are increasing faster than the 2.5% annual cap.

SESD's last comprehensive facility upgrade was completed in the late 1990s, and the district said mechanical, electrical, control, and said safety components are now in need of modernization.

It also said key pipeline infrastructure is more than 50 years old and needs rehabilitation or replacement.

SESD is recommending legislation that would establish a non-exempt budget ceiling of $30.5 million in fiscal year 2028, with annual increases of 2.5% after that, authorize exempt debt of $390 million in principal for the first 10 years of the Centennial Plan, remove the district's existing $2 million cap on its stabilization fund, and update provisions in its enabling legislation.

SESD said that without relief from Proposition 2½, severe budget constraints could begin as early as next year.

Future cuts would likely affect maintenance and equipment repairs, and delaying capital work could lead to equipment failures, higher emergency repair costs, reduced reliability, regulatory violations and environmental harm to Salem Sound.