Baltimore County must pay the city $10.2 million to settle a long-standing dispute over rates the county pays Baltimore for water drawn from the city's system, an arbitration panel has ruled.
The panel yesterday ordered Baltimore County to make the back payment to the city within 60 days or pay interest penalties of 6 percent a year.
The payment is to be made to the self-supporting fund that pays for city water and sewer services. It cannot be used for general city services.
"The mayor is very pleased about this," said Clinton R. Coleman, press secretary to Mayor Kurt L. Schmoke.
"This will likely translate into savings for city residents because water and sewer rates may not increase as much as they would have otherwise," Coleman said of the award.
City water rates were increased in 1989, when the Board of Estimates approved increases ranging from 7 percent to 40 percent for residence and businesses.
After that increase, the typical city resident paid a quarterly water and sewer bill of $67.68, public works officials said.
Baltimore County Executive Roger B. Hayden said last night that he did not know enough about the ruling to say what the county's course of action will be.
"I haven't seen it. I want to wait have a look at at it," Hayden said. "I just don't have details right now."
The arbitration panel's ruling could mark the end of a 13-year dispute between the city and county.
Under a 1924 state law, the county is required to reimburse the city at cost for water drawn from Baltimore's system. The city operates three reservoirs in the county and is required to provide the county with water at cost. Impasses are to be settled by an arbitrator.
The city also provides water to parts of Howard and Anne Arundel counties, but payments made by those counties are not affected by the decision, said Ambrose Hartman, the deputy city solicitor.
In 1978, the city hired a consultant who said the rates charged the county were too low.
A year later, then-Mayor William Donald Schaefer wrote then-County Executive Donald P. Hutchinson in an effort to resolve the problem, but the dispute dragged on.
In 1984, the disagreement got bogged down by questions about how the case should be arbitrated.
That was settled, but the arbitrators still were not appointed.
The case began to move when then-Mayor Clarence H. Du Burns took the disagreement to court in 1987.
The suit asked that the county be forced into arbitration, and ended when the Maryland Court of Appeals ordered the city and county to jointly appoint a three-person arbitration panel, which was headed by local attorney Harrison Robertson Jr.
Arbitrators yesterday agreed with the city's contention that the formula used for determining the cost of water supplied to the county did not adequately compensate Baltimore.