City is awarded $10.2 million in dispute over water Baltimore County must make back payment, arbitrator rules

August 23, 1991|By Ann LoLordo l

The city of Baltimore won a 13-year-old dispute with Baltimore County yesterday over the cost of providing water to county residents -- a decision requiring the county to make a $10.2 million back payment within 60 days.

Under a 1924 state law, the city must provide the county with water at cost, but the city has long argued that the formula for determining the cost was outdated. Yesterday, an arbitrator sided with the city and ruled that the formula should be revised, according to lawyers familiar with the case.

Arbitrator Harrison M. Robertson Jr. also found that the use of the new formula should be retroactive to 1984, which will result in a payment of $10.2 million to the city, said Ambrose T. Hartman, the deputy city solicitor.

Roger D. Redden, the attorney who represented Baltimore County in the dispute, said last night that a decision on whether to appeal the arbitrator's ruling to a court will not be made until county officials review Mr. Robertson's lengthy decision.

But Mr. Redden did say that "the county doesn't have $10 million. How this money is going to be raised is a big question."

What effect the decision will have on county taxpayers was uncertain. Attempts to reach Fred Homan, the county budget director, were unsuccessful. County Executive Roger B. Hayden said, "I would have to look at the details before I could comment."

Many county officials were in Ocean City at the annual meeting of the Maryland Association of Counties.

For the financially strapped city, the $10.2 million award is a mixed blessing. The money cannot be added to the city's general fund, which is used to finance social programs, pay salaries and provide new services, Mr. Hartman said. It can be deposited only into the city's self-sustaining water utility fund, he said.

However, the money might enable the city to hold the line on its water rates in the near future, he said.

For nearly 13 years, the city has tried to revise the formula that determines how much Baltimore County pays for the city's treated water to account for the value of water-related property owned by the city: the Loch Raven, Pretty Boy and Liberty reservoirs.

In 1972, an agreement was reached to submit any dispute to an arbitrator, and in 1978 a consultant said the city's charges were too low. In 1987, the city threatened to sue if the county did not submit to arbitration.

The county refused, saying that the city was really seeking a profit to which it was not entitled. Baltimore sued, and a judge ruled that arbitration was required.

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