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Mason shed old career to hit the bricks

January 11, 1999

By SCOTT BUTKI / Staff Writer

photo: RICHARD T. MEAGHER / staff photographer




The Washington County Commissioners were urged this week to sever the Conococheague Industrial Pretreatment Facility from the rest of the Water and Sewer Department.

The pretreatment plant should have its own management under an independent government authority, said Clarence W. Scheer, chairman of the Water and Sewer Advisory Commission.

The County Commissioners and the Advisory Commission met together Tuesday for the first time since four new commissioners were sworn in.

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As a separate authority, it would have its own management board and be responsible for its own revenue, Scheer said.

The change would make it easier for the $9 million plant to become financially self-sufficient, he said. The county has spent about $2.3 million in subsidies on the plant since it opened in 1994.

In October 1997 the County Commissioners put Greg Larsen, a former sales representative for the Hagerstown-Washington County Convention and Visitor's Bureau, in charge of marketing the plant. Since then, monthly revenues for the plant have grown from $1,510 at one point in 1997 to more than $35,000 in both February and March of 1998, according to records provided by Larsen.

The plant needs monthly revenues of $125,000 to break even, Larsen said. Despite that, he is predicting the plant will start breaking even in late 2000.

Construction of the plant was one of the decisions by the now-defunct Washington County Sanitary District that resulted in more than $50 million in debt. The County Commissioners took over the independent district in 1995, assuming all of its debts. The commissioners raised water and sewer rates to deal with the debt.

Scheer agreed with County Commissioners Bertrand L. Iseminger and John L. Schnebly that the county should never have entered the industrial pretreatment business. There is only one other government-owned plant of its type in Eastern United States, county officials say.

"It is a business we should never be in," Scheer said. Putting the plant under its own authority would keep apart essential and non-essential government services, he said.

Businesses should take care of their own industrial pretreatment needs, Schnebly said. This should not be a function of the government, he said.

Iseminger said he is uncomfortable with the county bringing in industrial pretreatment material from outside the area.

The county is in an awkward position and it essentially has two options, Scheer said. The plant can be closed immediately and all of the debt will be absorbed, or the county can "try to make it a winner."

If the plant increases its revenue enough, it will become attractive to private enterprise and the county might be able to sell it, he said.

One way to do that, Scheer said, is to refinance the plant portion of the county's water and sewer debt by floating a 40-year bond.

The portion of the debt related to the pretreatment plant is about $9 million, County Administrator Rodney Shoop said.

However, the county has an unwritten policy not to issue bonds longer than 20 years, Shoop said.

Iseminger said he did not think anyone wants to continue paying off debt on the plant for the next 40 years.

The commissioners need to decide whether they want to continue in the industrial pretreatment business before determining if they want to float such a long-term bond, Iseminger said.

While it would mean a long-term debt, it will also make it easier to keep rates down, Scheer said. "It is a trade-off," he said.

County Finance Director Debra Bastian said a long-term bond could affect the county's bond rating, forcing it to pay higher interest rates on all future bonds, not just those for water and sewer.

Scheer pressed Bastian about whether the bond rating might drop even if the plant were under a separate authority. She said she would need to do some research on the question. Iseminger said he believed it would still be a problem.

Scheer encouraged the commissioners to create a task force to try to determine the future of the plant.

While there was no resolution regarding the ideas Scheer presented, the County Commissioners and the advisory commission members did agree on one matter: The county and the City of Hagerstown need to have further talks about consolidating their water and sewer systems.

Maryland Department of the Environment officials have suggested the city and county consider merging.

Iseminger said that the county would be more likely to receive state help in dealing with the sewer debt if it first demonstrates cooperation with the city.

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