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Taxpayers shoring up water/sewer revenues

December 20, 1997

Taxpayers shoring up water/sewer revenues

By STEVEN T. DENNIS

Staff Writer

The Washington County Commissioners have backed off from their statement made in a letter to The Herald-Mail that revenues are meeting expenses at the Water and Sewer Department.

"If anybody would tell you that they'd just be trying to blow smoke," said Commissioner James R. Wade.

"If it hadn't been for the county's general fund contribution, obviously there wouldn't be a balanced budget."

County taxpayers are paying $3.5 million a year to subsidize the Water and Sewer Department, including $832,000 for the Conococheague Industrial Pretreatment Facility.

Commissioner John S. Shank, who said he didn't see the letter before it was sent, agreed that revenues wouldn't be meeting expenses without the $3.5 million in taxpayer subsidy.

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Commissioners President Gregory I. Snook, who said he put County Administrator Rodney Shoop in charge of writing the letter, said that the general fund contribution mostly went to pay for debt costs, not for operations.

Shoop said everybody who has been following the water and sewer story would know that revenues aren't meeting expenses without the county subsidy.

The commissioners have asked the county's state delegation to legalize the practice of subsidizing the Water and Sewer Department in this year's legislative session.

Other municipalities in the Tri-State area polled by The Herald-Mail this week don't subsidize their water and sewer services. Chambersburg, Greencastle and Waynesboro in Pennsylvania, Martinsburg and Hedgesville in West Virginia, Frederick County, Md., and the city of Hagerstown all pay their water and sewer expenses with water and sewer rates, not the general fund.

Mark Spickler, Martinsburg finance director, said the water and sewer services are a separate entity. "It's supposed to be self-supporting. If the water and sewer would get into a problem where it's not generating enough revenue you'd have to raise rates."

Cass Toon, a lawyer for the West Virginia Public Service Commission, which regulates water and sewer services in West Virginia, said municipalities and the state will often pay for some water or sewer projects, such as after major flood damage, but said he's never heard of a long term subsidy to keep rates down.

Hagerstown's general fund actually gets a payment in lieu of taxes from its Water and Sewer Department of several hundred thousand dollars a year, according to Finance Director Al Martin.

Shank said there is a need for the county to subsidize water and sewer, especially for low-income customers.

"I don't want to be the person to make somebody sell their home because they can't pay their water and sewer bill. That isn't a caring community that does that."

Expected increase

Water and sewer customers can still expect substantial rate increases over the next 10 years, despite the subsidy. Annual rate increases are projected at 9 percent each of the next two years before dropping to eight percent and eventually to 3 percent.

The Water and Sewer Advisory Commission hopes to actually decrease rates next year by 1.5 percent and hold increases down to the Consumer Price Index after that. But that would result in a deficit of about $14 million over the next 10 years, according to county projections.

Commission Chairman Clarence Scheer said a combination of savings could make that scenario feasible, including elimination of a $12 million mandate from the state to remove nitrogen from sewage and refinancing the $55 million debt using 40-year bonds. A government financing consultant has been hired by the county to look at refinancing options and will report to the county early next year.

Commissioner Ronald L. Bowers said the way to keep rates down is by adding more users by building sewer lines and promoting growth.

Shank said he'd like to hold rates steady through growing the usage of the county's sewer system. He said he had a problem with 40-year bonds. "Your children would be paying it off," he said.

A request made Monday to the county for the total amount paid so far by the general fund to water and sewer operations wasn't answered by Friday.

Pretreatment plant

Despite an extra $200,000 a year in revenue at the Conococheague Industrial Pretreatment Facility from transferring septic tank and chemical toilet waste from other treatment plants, the pretreatment plant is still projected to lose an average of about $1 million a year over the next six years unless new customers are found.

But there is cause for hope.

The county's efforts to market the pretreatment plant have started to pay off. The first new customer lured to the plant by marketing coordinator Greg Larsen dropped off its first load of waste Thursday.

The customer, RecOil of York, Pa., is expected to provide the pretreatment plant with $500 to $1,000 a week in revenue. Snook noted that's almost enough to pay for Larsen's $56,391 budget.

Larsen, who has been on the job for two months, said several other prospects have been identified, including companies considering shipping in waste by rail on CSX lines.

Larsen also wants the state to remove a prohibition on piping waste in from nearby companies.

"We have to reserve our enthusiasm," Larsen said.

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