Back-billing fails fairness test

September 05, 1995

In May, members of the Anne Arundel County Council approved a water and sewer rate hike, needed to cover a $5.7 million deficit last year, with the increase to take effect July 5. Yet when homeowners in Linthicum and the Broadneck received their utility bills for April, May and June, there was the higher rate!

The county had "back-billed" them; in other words, it retroactively charged homeowners on certain billing cycles in order to collect the needed revenues over a longer period. That way, the rate hike didn't need to be as high and people presumably wouldn't mind it as much.

The trouble is, the Linthicum and Broadneck homeowners, plus others on other billing cycles who will be charged retroactively for one or two months, will end up paying more than everybody else. It's not fair, and last week the council demanded the Gary administration end the practice.

The administration isn't really trying to pull the wool over anybody's eyes. Back-billing rate increases has been a policy for years, partly because it's easier for the county's antiquated computer system to handle changes this way, and partly because until now it has been politically palatable to impose lower rate hikes by spreading them out over a longer period.

It's true, too, that because rate hikes continue in perpetuity unless the council decides otherwise, in the long run all customers save money if the increase is kept as low as possible.

By back-billing, the county held the most recent rate hike to only 13.5 percent, as opposed to the 18 percent that would have been required if it had waited to apply the increase to bills issued after July 5. Assuming the 18 percent increase stayed in place after the county raised its $5.7 million, back-billed customers would pay more over time than they will now.

Still, it's not right for rate increases to fall more heavily on some residents than on others. It's not right to penalize those homeowners who happen to be on a certain billing cycle. Everybody should pay the same increase for the same amount of time.

Instead of back-billing, the county should have raised everybody's bill by 18 percent. It would have taken nine months to raise the $5.7 million.

There's no reason why some homeowners have been stuck with the higher rates; the council has the power to lower them. Pragmatically and politically, back-billing may make some sense. But it's not fair. The county should stop doing it.

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