Sewer district warning deepens Marblehead’s wider fiscal strain

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Sewer district warning deepens Marblehead’s wider fiscal strain

Everything that goes down a drain in Marblehead ends up at the same place: a 30-year-old wastewater plant in Salem, shared with four other communities, reached through a single pipe under the harbor. On Wednesday night, the people who run that plant told Marblehead officials it is wearing out, and fixing it will cost $390 million.

The South Essex Sewerage District (SESD), which handles wastewater for Marblehead, Beverly, Danvers, Peabody and Salem along with portions of Middleton and Wenham, is asking the state Legislature for special permission to exceed the spending limits set by Proposition 2½. Without it, district leaders say, they cannot absorb a coming jump in disposal costs or pay for the long list of repairs the plant and its pipelines now need. They made their case Wednesday at 6 p.m. to the Marblehead Water and Sewer Commission and, an hour later, to the Marblehead Select Board at Abbot Hall.

The district serves about 190,000 people. It is a wholesaler: it bills each town based on what arrives at the plant, and each town builds that bill into local sewer rates. The plant on Fort Avenue in Salem was last comprehensively upgraded in the late 1990s. Some of its mechanical and electronic systems are now impossible to find replacement parts for. The key pipelines beneath Salem Harbor are more than 50 years old.

Two pressures at once

SESD Board Chair Michael Parsons told the Water and Sewer Commission the district is squeezed on two fronts. The first is a contract for hauling away the solids left over from treatment — every night, three tractor-trailer loads of them. That contract expires next year, and Parsons said costs for the new one are projected to rise by $1.4 million to $2.2 million annually, driven by states tightening rules on PFAS, the so-called forever chemicals, and closing the door on out-of-state sludge. Chemical costs have doubled in five or six years. Electricity and labor are climbing too.

"We just can't fit that kind of budget increase and stay within the limits of Proposition 2½," Parsons said.

The second pressure is the plant. Three years ago, SESD commissioned a 20-year capital plan, which it calls the Centennial Plan in a nod to the district's 100th anniversary. The plan identifies roughly $390 million in work for the first decade, including replacement of the equipment that squeezes water out of sludge, a new force main under Beverly Harbor and eventual rehab of the force main that carries all of Marblehead's wastewater out of town.

The special legislation SESD wants would do four things: set a new operating budget ceiling of $30.5 million in fiscal 2028, a one-time jump of about $4.5 million; authorize $390 million in exempt borrowing for the first decade of the Centennial Plan; remove a $2 million cap on the district's rainy-day fund; and update century-old language in SESD's enabling act. After fiscal 2028, the operating ceiling would rise 2.5% a year.

A financial analysis by the Edward J. Collins, Jr. Center for Public Management at the University of Massachusetts Boston projects that SESD's assessments to member towns will roughly double over 10 years. Communities are expected to recover those costs through sewer rates, not property taxes. The Collins Center put the district-wide average annual sewer rate increase at 6% to 12%. The dollar figure that range translates into for a typical Marblehead household was not provided.

Why Marblehead's bill looks different

DPW Superintendent Amy McHugh told the Select Board the town just made its last $1 million payment on the 2013–15 emergency replacement of its under-harbor pipelines, a debt the town carried alone because only Marblehead uses those lines. That payment falls off in fiscal 2026, freeing roughly $1 million a year just as SESD's new costs begin to land.

"Marblehead is a different story, and the only reason we're a different story is because we had a major piece of infrastructure break in 2013," McHugh said. She credited former Water and Sewer Commission Chair Carl Siegel with structuring the repayment over 10 years rather than the standard 20, saving the town roughly $1 million in interest.

The exact dollar impact on a typical Marblehead household has not yet been provided. McHugh's projection for the town's full sewer budget — local operations, the SESD assessment and in-town capital work combined — shows annual increases of about 4% to 5% in most years, in line with the historical pace, with a single larger bump of about 8% in fiscal 2031 when SESD's costs peak and Marblehead's own force main project comes due.

If a household pays $750 a year in sewer charges, a 4% to 5% increase would add roughly $30 to $38 a year, while the projected 8% bump in fiscal 2031 would add about $60. The Water and Sewer Commission is expected to take up a rate study June 30.

"Similar increases, maybe a point or two higher than we've had in the past," Select Board Chair Daniel Fox said, "except maybe a little bit of a bump, a couple points more in fiscal year 2031."

The exact dollar impact on a typical Marblehead household has not yet been provided. If a household pays $750 a year in sewer charges, a 4% to 5% increase would add roughly $30 to $38 a year, while the projected 8% bump in fiscal 2031 would add about $60. The Water and Sewer Commission is expected to take up a rate study June 30.

Marblehead's fiscal 2027 SESD assessment is $2,221,400. The district projects the town's share of the operating increase at $180,000 above the Proposition 2½ baseline in fiscal 2028, rising to $350,000 by fiscal 2032. Debt service on the first round of capital projects would average $170,000 a year through fiscal 2032, then climb to about $2.3 million a year starting in fiscal 2033. A second round would add about $150,000 a year on average through fiscal 2037, then roughly $1.4 million annually beginning in fiscal 2038.

At the Select Board meeting, resident Albert Jordan said he had been reading news from other communities warning of much steeper increases and wanted to know whether the same was coming here. McHugh's presentation followed.

Parsons told commissioners SESD needs its exemption in place by July 31, when the Legislature's formal session ends. The district has already presented to Peabody, Beverly and Danvers; Salem is scheduled for Monday. If the legislation does not pass, Parsons said, SESD cannot produce a balanced fiscal 2028 budget under the Proposition 2½ cap, and the cuts would land on maintenance and capital work at exactly the wrong time.

"Everything's getting old," he said.

Marblehead voters are already preparing to weigh in on a separate set of property-tax override questions next month, which Select Board member Erin Noonan called one of the biggest ballot initiatives in two decades. Sewer rates and property taxes move through different machinery. But essentially the same households will be asked to absorb both.

If this helped you understand why a $390 million sewer plan in Salem could affect Marblehead household bills — and what still isn’t known before the June 30 rate study — please consider supporting the reporting that follows the numbers from public meetings to local impact. We have 116 readers making recurring contributions, and we’re trying to reach 175 by July; today, one more membership helps keep The Independent free, locally accountable and able to cover fiscal choices before they reach your bill. 🟦 Become a member here.