BOSTON -- A year after residents of 43 Massachusetts communities burned their water and sewer bills to protest rising rates, a compromise has been reached that is expected to decrease costs for many state water customers.

A subcommittee of the Massachusetts Water Resources Authority's advisory board approved a plan Friday for fiscal 1995 that will change the method of determining sewer rates for state customers.

The move is expected to decrease yearly assessments for at least 30 of the 43 communities served by the authority, according to Joseph Favaloro, director of the advisory board.

Previously, rates for the 43 communities were based solely on population and ignored the average sewage flow generated by the community. The formula helped cities like Boston because the number of people who commute to the city and create sewage during the day did not affect the city's rate.

But in part because of the huge public outcry in communities outside Boston, the state legislature asked the advisory board to work out a new way to assess sewage rates.

The new plan would base 75% of a town's assessment on population and 25% on peak average monthly sewerage flow, Favaloro said. The money collected would go directly to paying for the authority's capital projects.

A small portion of residents' overall bills, known as the day-to-day operations assessment, will still be determined solely by a community's population.

"This plan eliminates the strictly population-based method and embraces the board's work of the last year and a half," Favaloro said. "Everyone had to give in a little. [It] will also give cities an added incentive to cutting their assessment through conservation."

Last June, ratepayers complained that many communities in the state were being unfairly burdened by sewer rates so that larger cities, especially Boston, would not have to pick up as much of the tab from the authority's $4.7 Boston Harbor cleanup.

The cleanup has been financed by MWRA bonds, which are secured by the steady stream of water and sewer rates that the authority collects.

For a city such as Boston, rates will increase under the new proposal. Although it is still too soon to tell by how much, Favaloro said the percentage increase will most likely be in the single digits.

"The way it played out, there was a real tug-of-war between the communities that wanted the rates decided only on population and those that favored only sewage," said Patricia Fahy, executive director of the Boston Water and Sewer Commission. "We had hoped for population-based because there are less fluctuations year to year and it's easier to anticipate for a budget."

For fiscal 1994, which runs until the end of this month, the city of Boston was assessed $94.2 million for sewer services. Favaloro said the city will probably be assessed around $100 million for fiscal 1995.

The advisory board's subcommittee was comprised of a single member each from Boston, Brookline, Cambridge, Canton, Framingham, Newton, Norwood, Quincy, Sommerville, Stoughton, Wellesley, Weymouth, Wilmington, and Winchester. The members from Boston, Cambridge, Newton, and Norwood voted against the plan, Fahy said.

The full 43-member advisory board will vote on the measure later this month. Sources familiar with the water authority say the board is likely to approve the subcommittee's decision.

The full board's plan would then be approved provided that the state Senate, as it has done in the past, includes in its budget the authority for the advisory board to set sewer rates. The Senate is expected to submit its budget later this week.

Boston Mayor Thomas M. Menino has said he will try to keep sewer rates stable, but Fahy said it will be very difficult to do so if the measure is approved as written.

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