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County official says pretreatment plant may break even

April 07, 1999|By SCOTT BUTKI

The debt-ridden Conococheague Industrial Pretreatment Plant might break even for the next fiscal year, county Water and Sewer Director Gregory Murray said Tuesday.

If his prediction is correct, it will be the first year the 5-year-old plant has logged more revenues than expenses.

But the plant will continue to require annual general fund contributions until 2003 to pay off some of the plant's debt.

To break even, the plant must bring in more revenue than Murray's official operating revenue estimate of $500,000 for the year.

That is a 20 percent increase over the $400,000 projected operating revenues for fiscal 1999. In fiscal 1998, operating revenues were $100,000.

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During Tuesday's meeting, Greg Larsen, plant marketing director, gave the Washington County Commissioners an even more optimistic prediction: an increase of more than 100 percent.

Larsen estimated that increased use by customers and proposed rate increase will bring in $1.04 million in the fiscal year that begins July 1.

If plant revenues exceed $782,000 it will break even for the year, said Murray, who said he thinks that is "likely."

He said his estimate is lower than Larsen's because he wants to take into consideration fluctuation in the industry.

The plant needs to make about $65,000 a month to break even, Murray said.

With monthly revenue as low as $1,510 at one point in 1997, the County Commissioners had considered closing the plant.

Larsen projects a monthly revenue average of $86,707. He projects the plant will make more than $79,000 each month from July through the end of that fiscal year.

In the next few weeks, the commissioners will be given a recommendation for the bond restructuring and for the amount of the general fund contribution, Murray said.

The fiscal 1999 grant was $282,000, down from $860,000 the previous year.

In the last three fiscal years the county has given the Water and Sewer Department $9.25 million in grants, including $1.26 million for the pretreatment plant.

Last month the advisory commission asked the County Commissioners to increase the contribution for three other Water and Sewer Department funds from $2.3 million this fiscal year to almost $3 million next year.

At a March 18 meeting, the commissions informally agreed to $2.27 million, but to increase water and sewer rates by more than was recommended.

Murray also told the commissioners about proposed plant rate increases. The largest rate increase, from .8 cents per gallon to 4 cents per gallon, is for handling leachate.

The pretreatment plant, built by the now-defunct Washington County Sanitary District in 1994, treats and dilutes industrial wastes before they enter the sewage treatment plant.

Washington County dismantled the district and created the Washington County Water and Sewer Department in 1995. Decisions by the Sanitary Commission, including construction of the plant, left the county more than $50 million in debt.

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