Westminster Eagle: “City water rates likely to increase” by Jim Joyner

Westminster Eagle: “City water rates likely to increase” by Jim Joyner

Study proposes rate increase for higher users, those outside city limits

By Jim Joyner jjoyner AT patuxent.com

Posted 7/30/08

City of Westminster water and sewer revenues will fall about $1 million short of breaking even this year, and needs "restructuring" to pay for current and future repairs, maintenance and expansion.

That's the word from a consultant's study released Monday evening at a meeting of the Mayor and Common Council.

"The obvious thing is that (the city) needs to raise more money," said Edward Donahue, president of Municipal and Financial Services Group, an Annapolis consultant hired to study the city's rate structure.

"The question," he added, "is how, and who's going to pay it?"

Donahue said the city has some $80 million in capital projects in its horizon related to water and sewer service -- including a $5.6 million water connection to the Medford Quarry and $36 million project to expand the city's wastewater treatment facility. A new structure is needed, he said, to pay those bills and future obligations.

The study recommends a higher rate for users who use more water, rewarding those who use less and setting up a system to charge out-of-city users more than in-city users.

The council did not take action on the study Monday, but Council President Roy Chiavacci said it sets the stage for a discussion that will extend into the fall before a decision is made.

According to the study, Westminster's current rates are fragmented somewhat, reflecting a long list of factors that determine what people pay.

Donahue said one of the flaws of the current system is that it allows a lower rate per gallon for users who consume more water, essentially a bulk discount, when it should charge a higher rate as a means of promoting conservation.

Under the consultant's plan, the city would charge a set fee per quarter -- suggested at $20.36 for fiscal year 2009 -- then a rate per 1,000 gallons up to 18,000 gallons quarterly, suggested at $2.34.

But if users cross over that 18,000 mark, the rate would more than double, to $5.86 per thousand gallons under the proposed scenario for FY 2009.

Lisa Zitomer, a consultant with of Municipal and Financial Services, acknowledged the boost in rates is drastic, but said is tough to curb bigger users "unless you take an aggressive step."

Councilman Dr. Robert Wack said there's no way to sugarcoat the fact that rates will increase, but attaching separate rates for higher users versus low users may be a good move.

"People who use the most will pay the most," he said, "and people who save the most will pay the least."

Inside outside

The other key factor in the rate structure calls for charging users outside the city more.

Donahue said the city already charges some additional amount to many of those users, but it varies -- from 12 to 25 percent more for water and 34 to 100 percent more for sewer service.

He suggested the city switch to a "utility rate" structure for out-of-city customers -- essentially setting up the city as a utility for those clients.

If the city adopted the proposal, it would charge those users 43 percent more on water rates compared to in-city customers; and 63 percent more on sewer service.

Officials said the city will host additional discussions, and public sessions, before a decision on any new structure made.

http://www.explorecarroll.com/news/404/city-water-rates-likely-increase/

20080730 Westminster Eagle: “City water rates likely to increase” by Jim Joyner