To keep from having to increase water rates in the middle of a fiscal year, Baltimore County officials have decided to appeal a ruling that would have required the county to pay Baltimore $10.2 million to settle a 13-year dispute over water rates.
County Executive Roger B. Hayden said the county was fighting the decision by an arbitration panel because it constitutes "retroactive rate-making."
"If the ruling is allowed to stand, it would force the county to increase charges to customers in the middle of a fiscal year, which would be unfair," the executive said.
County Attorney H. Emslie Parks said the appeal would go to Baltimore County Circuit Court, along with a motion to stay the payment. The county was ordered by the arbitrators to pay the money in 60 days or add on 6 percent per year interest.
County Finance Director James Gibson and Budget Director Fred Homan said the Metropolitan District Fund, into which all utility money goes, does not contain enough to pay the $10.2 million. Also, that amount could not be raised within 60 days through rate changes, they said.
County residents get their water bills directly from the city, Gibson said, and rate changes must go through the city bureaucracy, which takes time. Gibson called the arbitration panel's 60-day payment requirement "rather ludicrous."
Also, both men said, the city must document the amount awarded by the arbitrator to justify the amount. Homan said the county budget surplus, just verified at $11,042,000 for the fiscal year that ended June 30, cannot be used to pay such a debt because that money comes from operating budget funds, not utility funds.
Utility costs are self-supporting, and money collected for water, sewer and annual utility taxes goes into a special fund that pays for maintaining the system and providing the water.
The case stems from the city's contention that the county's payment for water services doesn't reflect the actual cost.