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Has county turned the corner on solving sewer debt mess?

June 11, 2003|by BOB MAGINNIS

Is Washington County finally digging its way out its massive sewer debt? Yes, according to County Administrator Rod Shoop, who said this week that the county government is ready to begin discussing the phase-out of the annual $3 million-plus general fund subsidy of the water and sewer fund.

It will still take a few years, said Shoop, who didn't state the obvious - that it would free up millions of dollars for other uses.

The administrator's comments came in a meeting held at 7:30 a.m. Monday to give members of the Regional Airport Commission information on the financing of the $60 million runway extension project.

Not much was said about that, in part because the Federal Aviation Administration hasn't made its final offer. Commission members were told that it's possible that the FAA would release grant money every 30 days, as needed, during construction.

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That's in contrast to what was announced in late May, when the County Commissioners were told that in addition to the $2.6 million local share, the county would have to borrow $21 million, which the FAA wouldn't fully repay for nine years.

Commissioner William Wivell estimated that due to interest on the loan, the county's costs would go to $8 million. He complained he hadn't been told about the additional cost until about two weeks prior to the vote.

Wivell did not attend Monday's meeting because he also serves on the board of the PenMar Development Corp., the agency trying to redevelop the former Fort Ritchie. PMDC's board meets on the first Monday of each month and is now preparing to elect new officers.

As for the sewer issue, in an effort to keep down consumers' rates, the county government has been transferring money from the general fund budget to subsidize the water and sewer fund. In fiscal years 2001 and 2002 alone, the transfer amounted to $6 million.

For those who missed the first act of this saga, a previous county board got into trouble when it went against a consultant's advice and built two wastewater treatment facilities. They anticipated that would spark residential and industrial development, but it took a long time to get under way.

Now growth and development are beginning to bring the revenue in, Shoop said, leading to the possibility that the subsidy could be phased out over several years.

Shoo[p said that would require consultation with the Washington County delegation to the General Assembly, Shoop said, which passed legislation that keeps the subsidy at its present levels.

Del. Chris Shank confirmed that, but noted that the subsidy began long before the delegation got involved.

Shank said that in 2000 the delegation got three related pieces of legislation passed. The first changes the percentage of the county's Gaming Commission's payout to give the fire and rescue companies an additional $250,000, freeing up other funds for county government use.

The second, Shank said, increased the hotel-motel tax, raising $500,000, half of which went to the county's economic development operation. The commissioners were free to use the other half as they saw fit.

The third bill required the county to create a water and sewer debt reduction fund, to which the county was required to appropriate $500,000 a year, Shank said.

That bill contained a clause that "the appropriation may not be construed to replace or reduce any existing subsidy..." Shank said that does mean that the delegation must approve any cut in the subsidy.

Shank said he's talked with a commissioner about doing that, but because the talks were only informal, said he did not want to name the official.

If the county government no longer had to subsidize the sewer system so heavily, it would have more cash available for items like school construction or additional aid to the City of Hagerstown and fire/rescue companies. Or the subsidy could be transferred to the airport project.

In Monday's meeting, commission members, including Commissioner Doris Nipps, said that the longer runway will not only attract new businesses, but keep those there now from leaving for places like Frederick, which she said is planning a runway extension project of its own.

Last month, one of Commissioner Wivell's concerns was that no business plan had been presented for the project, to make sure revenues would be available to cover costs.

Carolyn Motz, the airport manager, told me an environmental assessment and a cost-benefit analysis had been done, but neither sounds like what Wivell is looking for.

The hard lesson of the sewer debacle is one that the commissioners should pay close attention to. Their predecessors took a chance that if they built, increased development would cover the costs, but had no organized plan to make that happen. Instead, millions in debts were racked up, forcing the county to increase users' rates.

Some may want to paint Wivell as anti-progress, but those who built the Conococheague treatment plant were interested in progress, too. They just didn't have a good plan for follow-through. For insisting on one for the airport project, Wivell should be praised, not criticized.

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