City halts 30% rise for water and sewer

Pratt says audit shows surplus could offset fees

April 12, 2007|By John Fritze | John Fritze,Sun reporter

Baltimore officials temporarily delayed a proposed 30 percent increase in water and sewer bills that could affect nearly 2 million residents after auditors asserted yesterday that the city is collecting millions of dollars more than it needs to improve its aging underground infrastructure.

Comptroller Joan M. Pratt, who has long opposed sewer rate increases, said the city has amassed a $40 million surplus over the past three years that should be used to offset the new fees, which come at the same time that residents are facing higher electricity bills and property taxes.

The rate increases, which could also affect residents in Baltimore, Howard, Anne Arundel and Carroll counties, are being used to pay for a $1 billion, federally ordered overhaul of the city's sewer system. Officials said building a surplus now would prevent spikes in the future such as the 72 percent average electricity rate increase proposed last year by Baltimore Gas and Electric Co.

As in the past, the proposed increases would be phased in so that the rate would rise by 9 percent annually for three years. A Baltimore family of four using about 117,000 gallons of water per year would see their bill increase from $731 to $797 in the first year, and to $946 in 2009.

"I don't believe that the citizens of Baltimore should bear the burden," said Pratt, who is considering a run for mayor in this year's election. "Why would you increase the rate by 9 percent when you don't necessarily have to?"

Members of the city's Board of Estimates, including Pratt and Mayor Sheila Dixon, were expected to approve the rate increase after a public hearing yesterday but delayed their vote a week to address Pratt's questions. Still, Dixon said she believes that the proposed rate increases, while not ideal, are appropriate to meet the needs of the city's century-old sewer system.

"These mandates require us to do this in a way that none of us feel comfortable with, but we have no other choice," Dixon said. "And we're doing it in a very conservative manner compared to other cities across this country."

Dozens of large cities, including Baltimore, must meet Environmental Protection Agency mandates to reduce the amount of raw sewage leaking from sewer pipes and polluting streams and rivers. Governments are borrowing billions of dollars to make repairs and intend to pay off the loans through increased fees collected from residents.

Baltimore has steadily increased its fees for more than a decade and has spent about one-third of the $1 billion it expects it will need to repair the sewer system by 2016. City officials said yesterday that they plan to borrow $140 million more next month and that they need to have the rate increase in place now to assure credit agencies that they can afford the loan.

The surplus, they say, is needed to meet any unforeseen construction costs and to "stabilize" revenue so the city can impose steady annual rate increases, rather than a major spike in any one year.

Pratt says the city has built up a roughly $40 million surplus from the fees on top of that contingency money - far more than it needs to keep annual rate increases in the single digits. Dixon administration officials did not directly respond to Pratt's analysis but said they want a week to review the methodology. Several officials quietly grumbled that they were told of Pratt's report on Monday, only two days before the Board of Estimates meeting, and that they had not seen any written recommendations from her office.

Pratt did not specify what she believes the rate increase should be, other than to suggest that it could be reduced by "several percentage points."

Pratt's move could be politically significant, because she has said that she is considering a run for mayor. If she seeks the office, she would be running against Dixon - who is serving the remainder of former Mayor Martin O'Malley's term - in the Sept. 11 Democratic primary. Pratt, who has voted against sewer rate increases in past years, denied that her review of the rates was political.

Water and sewer fees have become the focus of Baltimore City Council legislation after articles in The Sun documented how many homeowners have lost their properties for not paying relatively small overdue bills.

Debate over Baltimore water and sewer rates has implications for residents throughout the region because surrounding counties purchase at least part of their water from the city. Overall, the city's sewer system serves about 1.6 million customers and the water system serves about 1.8 million.

Rate increases would almost certainly be passed on to suburban customers in some form, though county officials could not say for sure yesterday whether their rates would climb and, if so, by how much. In the past, suburban rate increases have roughly mirrored the city's.

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