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Snook- Repeal subsidy mandate

July 28, 2000

Snook- Repeal subsidy mandate



By SCOTT BUTKI / Staff Writer


Washington County Commissioners President Gregory I. Snook asked the local delegation to the Maryland General Assembly on Friday to consider dropping a state requirement to continue annual subsidies to water and sewer funds.

The subsidies are a possible roadblock to an improvement in the county's bond rating, Snook said.

The legislation in question is part of a three-bill package approved earlier this year that doubled the county's hotel-motel tax to 6 percent, bringing in about $923,578 a year.

A portion of that money may be used to finance a new baseball stadium. Some of it would go to organizations the county funds, freeing a corresponding amount of money to be applied to the sewer and water debt.

The bill discussed Friday created a fund to pay off the debt and required the county to continue subsidizing the water, sewer and pretreatment funds. It was intended to encourage the county to continue trying to pay down the $52.3 million water and sewer debt.

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The county has no problem with the part of the law creating the fund to pay off the debt, Snook said. But it wants the subsidies requirement removed to eliminate a potential barrier to an improved bond rating.

The state requirement is a "red flag" to rating agencies, County Administrator Rodney Shoop said.

A June 8 document about the county's financial state by a company analyst mentioned the subsidies as a "mitigating factor."

Improving its bond rating would allow the county to take advantage of a lower interest rate on future bonds, Shoop said.

After the meeting, Del. Robert McKee, R-Washington, said he would prefer not to remove the state requirement but doesn't totally oppose the request.

Delegate Chris Shank and Sen. Donald F. Munson, both R-Washington, said they want to help the county improve its bond rating but aren't sure they want the state mandate removed. They will work with the county to try to find a creative solution, Shank said.

The county has subsidized the Water and Sewer Department by at least $12 million since taking over the Washington County Sanitary District in 1994.

Commissioner William J. Wivell opposes Snook's request. The bond agency report cited the subsidy - not the state funding requirement - as a problem, he said, and amending part of the law won't solve anything.

The rating agency will also notice the county's debt level, and the state law helps ensure the financial condition of the county improves, he said.

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