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Economic development official blasts Washington County

April 10, 1999|By SCOTT BUTKI

Maryland's top economic development official said the state is "wasting staff time and resources" marketing Washington County because its high sewer and water start-up fees and annual rates are scaring away manufacturers.

The Washington County Water and Sewer Department's annual user fees, such as water and sewer rates, are considered "excessive" by companies looking to locate in the county, said Richard C. Mike Lewin, secretary of the Maryland Department of Business & Economic Development.

"Recent attempts to attract manufacturers to Washington County have failed due to the Conococheague Wastewater Treatment Plant tap-in fees," Lewin said in a March 18 letter to County Commissioners President Gregory I. Snook. The letter was obtained by The Herald-Mail on Friday.

The state wants to help the county solve the problem, said Vernon Thompson, assistant secretary of the state economic development department. A meeting between Washington County Economic Development Council officials and state officials is being set up for sometime this week, he said.

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"We will sit down and go over what steps might be available to change the scenario," he said.

In the letter, Lewin said the "sole reason" HP Hood, a national dairy company, opted not to open an $80 million milk factory in Washington County was because of high tap-in, or start-up, water and sewer fees. Hood instead decided to build a factory in Frederick County, Va.

When Hood first contacted the county about building a factory in Washington County, it was told it would be charged $2.7 million in tap-in fees, Lewin wrote. While the company was later told it could be charged $900,000 instead, that cost was still nine times greater than that of the nearest competitor, Lewin said.

The fee numbers are correct, said Greg Murray, water and sewer director. Murray did not receive a copy of the letter until Friday.

Hood had no comment on the letter or its decision, a spokeswoman said Friday.

Lewin's letter also said the tap-in fees are responsible for the recent loss of one manufacturer and may jeopardize negotiations with another. County Administrator Rodney Shoop said he did not know to which companies Lewin is referring.

"It is obvious that we are wasting staff time and resources on individual recruitment in Washington County until the above issues are resolved. I know you must be equally frustrated by this situation," Lewin wrote.

By "we," Lewin meant both county and state officials, Thompson said. Both Lewin and Snook were unavailable for comment Friday.

While refusing to agree or disagree with Lewin's opinion, Shoop pointed out that some companies, such as TruServe, have opened warehouses in Washington County in the last year.

"Our economy in Washington County speaks for itself. We have the lowest unemployment rate that we've had in many years," Shoop said.

Local business leaders in recent years, however, have expressed concerns that the county wasn't attracting enough higher-paying manufacturing jobs, but instead were getting too many low-paying warehouse and distribution jobs. Manufacturing companies typically have higher water and sewer costs than warehouses do.

Lewin's letter has not been discussed openly at County Commissioners meetings but was discussed in closed session Tuesday for the first time.

Since taking over the now-defunct Washington County Sanitary Commission in December 1995, the Washington County Commissioners have raised water and sewer rates yearly and given the financially troubled Washington County Water and Sewer Department $9.25 million in grants from the general fund. The commission accrued more than $54 million in debt before the takeover.

A market study would show Washington County can't compete with some other areas, Commissioner John L. Schnebly said.

"It is not news to us that we have some problems with the overall rate structure," Schnebly said. "We are faced with the long, hard process of digging ourselves out of this hole."

While Commissioner Bert L. Iseminger said the county can't react to every letter it receives, he and Commissioner William J. Wivell said the letter will affect discussions about rates.

"We're doing all we can to stabilize and bring down water and sewer rates," Iseminger said. Rates and fees are just one factor involved in decisions by businesses to move, he said. However, he is not sure if it is true that the rates are precluding economic development attempts, he said.

Wivell said he wished the commissioners had discussed the letter earlier because they are now setting water and sewer rates for fiscal year 2000, which begins July 1. He said the county needs to keep growing, and he is concerned if companies aren't coming here because of water rates and fees.

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