Md. to review water grants

March 06, 2009|By KATHERINE SHAVER | KATHERINE SHAVER,Washington Post

As of yesterday morning, the utility that oversees the crumbling water system in Montgomery and Prince George's counties wasn't going to receive a dime in federal stimulus grants because the state had decided the two Washington suburbs were too wealthy.

But by the end of the day, state officials promised to reconsider their funding formula after an outpouring of complaints from local officials and members of Maryland's congressional delegation.

Under current state plans, the Washington Suburban Sanitary Commission (WSSC) would qualify only for low-interest loans. But WSSC officials said the heavily leveraged agency can't take on more debt without a bigger increase in its 1.8 million customers' water and sewer rates - something they have vowed to avoid because of the economic downturn.

"I'm shocked that WSSC isn't at the front of the line for receiving [free] funds," said Montgomery council member Nancy Floreen, an at-large Democrat, whose committee oversees WSSC and its problem water pipes. "We need help as much as anyone, particularly considering our extraordinary water main break problems recently."

More loans are virtually out of the question, officials said. WSSC has $1.3 billion in debt. The utility plans to spend $157 million this fiscal year, about one-third of its operating budget, to pay off part of that, said Tom Traber, WSSC's chief financial officer.

Dawn Stoltzfus, a spokeswoman for the Maryland Department of the Environment, said yesterday the state now is reconsidering a plan that reserves half the expected $123 million in water and sewer grants for lower-income areas, such as Baltimore and rural areas of Western Maryland. State plans called for paying out the other half as loans, with no interest for disadvantaged communities and a 1 percent interest rate for wealthier ones, such as Montgomery and Prince George's.

The problem, local officials said, is that the Washington suburbs may be relatively well-off, but their water pipes are failing. More than 4,000 WSSC pipes have burst or leaked in the past two years. Major breaks have prompted boil-water advisories that have shut down schools and businesses, while a large water main that exploded near River Road in December required motorists to be rescued from a torrent of water.

Stoltzfus said the agency is still sorting through more than 500 applications for federal stimulus money for water and sewer projects. She said the state followed its traditional policy of reserving grant money for areas with median household incomes less than $47,810.

Because of the outcry over plans to do the same with the stimulus money, she said, the state is "still looking at" whether it will limit the money to lower-income areas.

"That was our original thinking, but the process may change," Stoltzfus said. "We know there are other interpretations of the [federal stimulus] law." She said the state will release the list of projects that will receive money - either from grants or loans - by March 13.

But Montgomery and Prince George's officials say the law requires no interpretation.

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