County proposes water, sewer bill rate hikes in new budgetEight of 11 county districts face higher rates because services can’t pay own way
(March 31, 2017) Worcester County eliminated a program about two weeks ago that allowed EDU purchases to be financed, because the financing along with slow EDU sales were putting strain on the wastewater treatment plants’ bottom lines and forcing rate hikes.
At this past Tuesday’s budget review session, it was revealed which customers would be affected, and how much more the service would cost if the commissioners don’t make changes.
The Water and Wastewater Department is classified as an enterprise fund, in that the rates paid by customers are supposed to cover the cost of operations. How much or how little the truth of that is can’t be known until the budget is adopted.
The county operates 11 water and wastewater service areas throughout the area, though not all wastewater treatment plants in Worcester are operated by the county.
“The service areas are subject to the same pricing fluctuations and market conditions as consumers and are generally sensitive to fluctuations in items such as electricity, telecommunications and petroleum,” Jessica Wilson, enterprise fund controller, said.
Unless noted to be flat rate payments, the amounts described are annual rates for customers.
The Ocean Pines Service Area has the largest budget out of all the other areas, and is projected to make a profit of about $36,700 this year. It lost about $954,000 in fiscal 2015, and about $1.6 million in 2016. It’s projected to lose about $494,000 in 2017.
The average bill for water and sewer customers in the Ocean Pines Service Area is increasing from $728 to $792. Sewer-only customers can expect to see their bills go to $584 per quarter, from $536. Commercial water and sewer customers can expect to see their bills go from an average of $1,416 to $1,640, while the standard debt service payment per EDU is reduced from $216 to $188. The supplemental debt service payment per EDU is not expected to change.
Mystic Harbour customers can expect the greatest number of changes, as the service area is projected to lose about $213,000 this year. Water and sewer service is going up to an average of $828 from $768, water only with sewer supplied by West Ocean City is going to $207 from $192 and commercial rates are going to $1,640 from $1,416.
Commercial water only, with sewer provided by West Ocean City, will go to $216 from $192. The flat rate for South Point and Sunset residents will increase by $15 to $175. However, Sunset residents will see a decrease in their overall bills because the debt service payment per EDU has been retired.
Riddle Farm is expected to squeak out a profit of $3,864 this year after posting losses during the three previous budget years. Water and sewer customers can expect their bills to rise from $856 to $896, and commercial customers can expect the same jump from $1,416 to $1,640 as in the other areas.
Edgewater Acres is also expecting a small profit of about $2,800 after an even smaller projection last year at $848 after losing money the prior two years. Water and sewer customers can expect their bills to rise to $1,157 from $1,117 and flat rate customers will see a hike from $852 to $892.
The Landings service area is expected to lose about $69,000 this year after posting losses dating back to fiscal 2015. Water and sewer customers’ rates are expected to go to $1,036 from $976.
River Run made money every year from fiscal 2015 on, and is expecting a surplus of $4,277 this year after posting larger gains in years past. Those who purchase water only will see an increase from about $227 to about $247.
Newark customers will see increases after the service area posts a small profit of about $1,000 after seeing diminishing losses up until this point. Water and sewer customers will see the average bill increase from $1,204 to $1,284, and commercial customers can expect the bill to increase to $2,576 from $2,472. Debt service payments are unaffected.
Finally, Briddletown is expected to post a loss of $1,350 this year, which is slightly more than last year but about 10 times smaller than the loss posted during fiscal 2015. Only commercial water customers are expected to be affected, with their bills going from $1,324 to about $1,353.
Wilson said the county’s taxpayers will provide interim financing for the insolvent water and sewer service areas, as expected sales of EDUs, or payments on the remaining financed EDU purchases, are made.
About two weeks ago while discussing halting EDU financing, Wilson told the commissioners the county is 92 EDUs short of expectations and hasn’t sold a sewer EDU in 18 months. In 2011 when the deal was developed, the expectation was the county would sell 30 EDUs per year.
Assateague, Lighthouse Sound and West Ocean City service area rates are not expected to change.
Domestic costs are based on an average of 6,000 gallons per month in a home unless noted as a flat rate. Commercial costs are based on 10,000 gallons of usage plus two EDUs.
The respective water and wastewater committees for these service areas all approved the rate changes.