Soak the city no more

August 26, 1991

On the surface, a reformulation of water and sewer rates seems about as exciting as studying for an algebra test. But for county and city residents alike, the decision of an arbitration panel to refigure the way the city totes up water charges to its county customers is an important political statement.

For years one of the minor benefits of living in Baltimore County has been that water rates are lower there than in the city -- despite the fact that the two jurisdictions draw water from the same sources. The three reservoirs that serve people in areas as disparate as Union Square and Hunt Valley are located in the county, but they are run by the city, which is supposed to provide county residents with water at cost. The city, however, has been using an outdated formula to calculate costs. As a result, county residents pay too little, while city residents pay too much.

Local water bills, even for overpriced city service, are not monumental. Still such differences in the cost of living pile up fast; the cumulative impact of everything from higher auto insurance and homeowners' insurance rates to higher water bills is partly to blame for middle-class flight to the suburbs.

The panel's decision not only to change the formula for determining costs, but also to make it retroactive to 1984, means the county now owes the city $10.2 million in back payments, which will pump up the water utility fund and lower rates for city residents. Thus in the future, water and sewer rates will be more equitable. More important, however, is that the panel's decision chips away at another disincentive that keeps people from living, working and paying taxes in the city.

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