The Frederick County Council was divided on whether to increase sewer rates, but after a lengthy discussion this week, a majority agreed to do just that.
Councilmen Steve McKay (R) and Phil Dacey (R) were the only two members to vote against the increase, which will raise sewer rates by nearly $50 per quarter by fiscal 2024.
Sewer charges will rise between $3 and $4 per fiscal year for the ready-to-serve charge — what everybody must pay the utility upfront — from $27 to $43 — by fiscal 2024. Overall, a typical user (13,000 gallons per quarter) should see their water and sewer bill jump from $179.81 per quarter to $226.81 per quarter in fiscal 2024.
At Tuesday’s meeting, McKay introduced an amendment that would have changed how water and sewer rates were adjusted after fiscal 2024. Instead of using the U.S. Department of Labor, Bureau of Statistics’ consumer price index, or CPI, to adjust the rates, McKay suggested that county officials review the rates every five years, as had been the practice.
“I think these are big, important decisions,” McKay said. “They should be done in a very deliberative and open and public fashion. And doing them every five years is not that severe a mandate for us.”
Chief Administrative Officer Rick Harcum, however, said keeping the rate adjustments tied to the CPI would provide long-term predictability for water and sewer users.
“We won’t come to the County Council unless we need to,” Harcum said. “We will make a commitment to our customers that we have a long-term pledge to maintain their rates at the rate of inflation.”
That amendment failed on a 5-2 vote, with McKay and Dacey voting in favor.
McKay and Dacey said they were concerned about the water fund reserves. The water rates will stay flat at $27 per quarter through fiscal 2024.
“I know there’s people who say you can never have enough money in these funds,” Dacey said of the water reserves. “And while that may be true, that money is coming from somewhere, it’s coming from the ratepayers’ pockets. That money, in my view, is better in the ratepayers’ pockets than it is sitting in a reserve fund.”
Lori Depies, the county’s director of finance, said previously that it’s important to have healthy reserve funds in both the water and sewer utilities, as credit agencies are starting to look more at deferred maintenance projects that local jurisdictions have.
She added that she would want 180 days of operating reserves, versus the 90-day policy the county currently has. Depies noted a recent cyberattack in Baltimore where city officials were unable to bill for services, and it took them months to get those services back online.
Overall, it’s important to have healthy reserves to respond to emergency repairs and projects, she said.
“At some point, that bill is going to come due,” Depies said. “And if you’re not tucking away money to pay that bill, you’re going to be hitting the ratepayers at some point in time, to say whoa, now I’ve really got to raise your rates because I’ve got this deferred maintenance that’s come due that you have to do.”
Council Vice President Michael Blue (R) expressed support for keeping the reserves healthy.
“It seems excessive, but I don’t think it is,” Blue said. “If these rating agencies are bringing these things up ... the savings the county has in the bond rating and the interest rate more than offsets the deficit we may be running in our enterprise fund with water and sewer. So overall, the citizens in this county are getting an actual savings.”