City considers hike in various charges for water, sewer service

June 08, 2005|by GREGORY T. SIMMONS

HAGERSTOWN - Hagerstown city officials took steps Tuesday to increase a charge by up to $4,800 per new home after hearing that the city was not collecting enough money to pay for water and sewer system expansion.

While that increase could take effect as soon as August, the City Council also discussed broader rate increases for water and sewer service that would take effect in October, as well as hiring three new employees for the sewer department.

The City Council spent about an hour during its Tuesday work session listening to city finance and utility managers, as well as consultants who earlier this year prepared a study of the way the city charges its water and sewer system customers.


The study was completed in April, but Tuesday was the first chance for the new mayor and council to examine the numbers.

One of the strongest opinions by the consultants was to increase so-called benefit charges, which are one-time costs for new connections to the water and sewer systems.

"You have been undercharging new customers," said Ed Donahue, a financial consultant with Municipal & Financial Services Group.

The city should increase the benefit charge to recover the costs related to new residential and commercial development, Donahue said.

Benefit charges are assessed for each new home, or the equivalent of a new home if it's commercial development, City Finance Director Alfred Martin said.

If the proposals are enacted, the benefit charges for a new home that connects to both the water and sewer systems would rise from $2,100 to $6,900.

Councilman Lewis C. Metzner favored the increase.

"I would urge that we adopt (the charges) ASAP," Metzner said.

City Administrator Bruce Zimmerman said the measure could be set for a public hearing as early as June 21, and the council could vote to introduce an ordinance to set the charge the same day. The charge cannot take effect until 30 days after a second vote to adopt the ordinance. That vote could take place in July.

The council did not address another looming question of how water and sewer service rates will be increased. The fiscal 2005-06 budget adopted in May assumes that overall water and sewer rates will increase by 3.7 percent, but it doesn't say specifically how the rate increase will take effect.

One proposal that the rate consultants recommended was to change the way the city charges customers outside city limits to act more like a private corporation instead of a public utility.

That recommendation could lead to a 30 to 35 percent increase in overall water and sewer per-gallon rates for customers outside the city, Donahue said. Donahue's group recommends about a 2.8 percent increase for water and sewer customers inside the city.

The City Council did not take a position on new water and sewer service per-gallon rates. That discussion likely will not happen until July.

The council on Tuesday also gave the go-ahead to add three new sewer system workers, including one full-time worker and two seasonal workers.

The cost of the new full-time employee would be about $32,700 including benefits, and the cost of one seasonal employee was estimated to be about $6,400. Zimmerman said the costs are beyond spending estimates for the coming year, but will not affect the city's bottom line.

The city's sewer system has been under scrutiny by state environment officials because of repeated failures at the city's sewage treatment plant on Frederick Street.

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