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Examination of water, sewer rates may be costly

The City Council and the county Commissioners may have to spend $100,000 each to support the Public Service Commission's examina

The City Council and the county Commissioners may have to spend $100,000 each to support the Public Service Commission's examina

October 09, 2002|by SCOTT BUTKI

scottb@herald-mail.com

The Hagerstown City Council and Washington County Commissioners may have to spend at least $100,000 each as part of a state regulatory agency's examination of the city's rates for residents who live outside the city, City Attorney John Urner said Tuesday.

The Washington County Water and Sewer Advisory Commission, acting with the commissioners' support, asked the Maryland Public Service Commission to determine whether the city's rates are reasonable and justified.

The expenses would come from the city and county governments paying rate consultants and legal fees, Urner told the council at Tuesday's meeting.

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At Urner's suggestion, the council Tuesday gave general approval for the city to retain a rate consultant to help the staff prepare for the inquiry.

Urner also suggested the city retain an attorney with an expertise in rates.

County Administrator Rodney Shoop said the county has retained an attorney familiar with the PSC and plans to hire a company that does rate reviews.

It is too early to estimate the cost of the review, he said.

The earliest the PSC would hold hearings on the rates is July 2003 under a proposed schedule accepted by PSC, county and city officials at an Oct. 2 meeting.

The PSC would rule, as part of the procedure, on whether the city can pass PSC-related costs on to its water and sewer users, Urner said.

The costs could end up being less than $100,000 if the PSC decides to stop its review, which could occur in January under the schedule, he said.

Depending on how extensive the PSC's review becomes, Finance Director Alfred Martin said the city's cost could be $200,000 or more. He said he was basing his estimate on city costs when the city goes before the PSC to increase its light rates, he said.

In light of the PSC-related costs, Urner suggested the city postpone plans for an independent study of its water and sewer rates, which officials had estimated would cost about $75,000 to $100,000.

Councilman Kristin Aleshire said he thinks the city should have a study done because one has not been done on water and sewer rates for more than 15 years.

The Hagerstown City Council on Aug. 20 gave preliminary approval to a proposal to have an outside independent consultant review the rates.

City officials said they did not know about the county's PSC request until after the Aug. 20 meeting.

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