Dixon limits rise in water, sewer bills

City approves increase for this year but puts off boosting '08, '09 rates

April 19, 2007|By John Fritze | John Fritze,SUN REPORTER

A chart on regional water and sewer rates in the April 19 editions included the most current front-foot fees. For the Washington Suburban Sanitary Commission, only a small portion of customers pay those fees.

Baltimore Mayor Sheila Dixon put on hold yesterday part of a proposed three-year, 30 percent water and sewer rate increase so that the city can review whether it is collecting more money than it needs from ratepayers - temporarily defusing a politically touchy dispute over water bills.

Baltimore residents will still face a 9 percent increase in water and sewer bills this year - about a $66 annual increase for a family of four - but the city's Board of Estimates, at Dixon's request, decided not to approve subsequent 9 percent increases in 2008 and 2009 until the city conducts a more thorough review of its needs.

Debate over the proposed increases comes as residents face spikes in electricity bills, property taxes, fuel and other essential services. About 400 Baltimore homeowners have lost their property to foreclosure in the past three years after falling behind on water bills.

"I think this was the best compromise for now," Dixon said after the board unanimously approved this year's rate increase.

Counties that receive water and sewer services from the city are expected to raise their rates, too. Baltimore County has proposed increasing its water and sewer rates by 15 percent this year. Howard County, which receives almost all of its water from Baltimore, has proposed a 9 percent increase.

Debate over the rates was prompted by Comptroller Joan M. Pratt, who questioned whether the city needed the 30 percent increase in water and sewer bills over three years that had been proposed. Pratt said the city had amassed a $40 million surplus in its collection of water bills, money that she believes should be used to mitigate rate increases.

Public works officials argued that by implementing all three increases and collecting the expected surplus, they can avoid the possibility of even larger rate increases in the future if unforeseen costs occur. But Dixon said she would like to see whether the department can better predict how much money it needs to repair its aging sewer and water infrastructure.

Pratt, who has opposed the rate hikes in the past, voted to approve the 9 percent increase yesterday and said she was glad Dixon held off on approving the subsequent increases. She said she would like the city to provide a credit to residents.

"I think it was a victory for the citizens of Baltimore to take a look at a one-year increase and then to review it next year," Pratt said.

Nothing prohibits the city's Board of Estimates from imposing the subsequent 9 percent increases next year - after this year's local election. If the Department of Public Works makes a compelling case that the money is needed, that is likely what the five-member board will do.

Pratt, who is considering a run for mayor, has denied that her motivation in questioning the rates is political. Pratt has voted against water and sewer rate increases for years.

Dixon became mayor this year to serve out the remainder of Gov. Martin O'Malley's mayoral term. This year, she is running for a full, four-year term.

Under the original, three-year rate proposal, a city family of four using a typical amount of water (about 117,000 gallons a year) would have seen its bill increase from $760 to $826 this year, and to $976 in 2009. The increase to $826 will still take place under the measure approved yesterday. Depending on the jurisdiction, bills can include charges such as the "flush tax" and the cost of water distribution - some of which appear on property tax bills.

Donald I. Mohler, a spokesman for Baltimore County Executive James T. Smith Jr., noted that the county's water and sewer rates did not increase last year even though the city's did. The city bills Baltimore County residents directly based on an agreement between the two governments.

"We look at our projects and set what we believe the rate is needed to cover those costs," Mohler said. "In some years we need to raise them, in some years we don't."

Dozens of cities, including Baltimore, are being forced by the Environmental Protection Agency to reduce the amount of raw sewage that leaks from sewer pipes. Baltimore is expected to borrow more than $1 billion by 2016 to make those repairs, and the sewer portion of the rate increases is being used to back those loans.

Baltimore public works officials have said that they plan to borrow $140 million for new projects next month, and that they need to have the rate increase in place now to assure credit agencies the city can afford the loan. Extra money raised by the utility cannot be used for other purposes, city officials said.

Jay Sakai, head of the city's Bureau of Water and Wastewater, said the department chooses to impose 9 percent annual rate increases rather than freezing rates and then imposing a large spike. "One of the reasons why we ... try to adhere to our long-range financial plan is to avoid rate shock," he said. "It is not our goal to have people go without water."


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