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Water, sewer rates to be reviewed

September 13, 2002|by SCOTT BUTKI

scottb@herald-mail.com

The Maryland Public Service Commission has agreed to review the water and sewer rates the City of Hagerstown charges customers who live outside the city.

The Washington County Water and Sewer Advisory Commission, acting with the support of the Washington County Commissioners, requested the review from the regulatory agency in an Aug. 2 letter.

"The city's rates have to be proportional to the cost of services to its customers and the commission feels that is not the case" with customers who live outside the city, Washington County Commissioner William J Wivell, a member of the advisory commission, said Thursday.

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Hagerstown Mayor William M. Breichner said he does not think the city has done anything improper. But he said it is probably a good idea to have an independent examination of rates.

Non-city customers are charged higher rates than city customers,

"I am thankful the PSC has seen fit to review the rates," Wivell said. "I think it is the right thing to do. We need to be sure the rate structure is fair to both in-city and out-of-city residents."

A Sept. 6 PSC letter to the advisory commission said, "After reviewing this matter, the Commission concludes that a hearing is necessary to resolve the issues raised by the petition."

"I think that is great for the community," Advisory Commission Chairman Clarence Scheer said.

The regulatory agency's action does not mean it necessarily believes there is merit to the arguments of the advisory commission, Michael Dean, assistant staff counsel for the commission, said Thursday.

A hearing date has not been set.

The process of a review request, which includes testimony, briefs and cross-examinations, usually takes about three to four months, he said.

As part of its review, the PSC will look into the city practice of having some departments make payments to the city general fund, Wivell said.

That payment, called a payment in lieu of taxes (PILOT), is intended to represent the amount those departments would pay to the city if they were private companies.

The city's water and sewer rate structures, and the PILOT program, have been reviewed and endorsed in at least one professional study by independent companies, Breichner said.

At an Aug. 20 meeting, the Hagerstown City Council gave preliminary approval to a proposal to have an outside independent consultant review the city's water and sewer rates. City staff are to return to the council with additional information, including a timeline and a plan for how the study will be funded.

When city officials asked for the study, they did not know the advisory commission had filed a review request with the PSC about the rates, City Administrator Bruce Zimmerman said.

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