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Water, sewer rates keep climbing in city budget projections

April 06, 2000|By DAN KULIN /Staff Writer

Water and sewer rates will continue to climb and Hagerstown's general operating fund will face six-figure deficits in the next few years, according to budget projections presented to the Mayor and City Council on Tuesday.

The projections are contained in the city's proposed $64.4 million fiscal year 2000-2001 budget, which was made public Friday and which the mayor and council began reviewing Tuesday.

Under the proposed budget, the water rate would increase 3.5 percent, and the sewer rate would increase 3 percent, with both rate hikes to be effective Oct. 1. Budget projections show the water and sewer rates having identical rate hikes for the next five years.

The rate hikes would pay for extensive capital improvements to the water and sewer treatment, distribution and collection systems. The water and sewer services are funded entirely with user fees.

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The water fund lists more than $2 million in capital projects planned for each of the next five years.

Water pollution control capital improvements costing more than $3 million are scheduled for each of the next four years.

It is projected that the city's general fund, the main operating fund supporting departments such as police and fire, will experience large deficits in the next five years.

An almost $400,000 deficit is projected for the 2001-2002 fiscal year, with deficits of about $600,000, $650,000, $860,000 and then $975,000 projected for the following years.

City Finance Director Al Martin said the general fund projections do not include any future cost of living raises for city employees.

Martin said the parking fund could be improved.

He said under the current rate structure the city would lose money on any new parking space even if that space were filled all the time.

Martin said the city's Light Department fund, which like water and sewer is supported with user fees, is projected to have a $43,000 deficit in the proposed budget.

In the next five years the fund is projected to have surpluses or deficits ranging from a $175,000 deficit in the 2004-2005 fiscal year to a more than $500,000 surplus in the 2002-2003 fiscal year.

The surplus and deficit projections fluctuate depending on the projected level of spending on capital improvements.

Martin said the Light Fund is in good financial shape and able to afford the $400,000 a year transfer from the Light Fund to the Community Betterment Fund.

The mayor and council members did not discuss the budget projections at the Tuesday meeting.

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