WSSC says it needs 11 percent rate increase
By: Alan Suderman
Examiner Staff Writer
October 20, 2009
Suburban Maryland residents and businesses are likely to face another steep increase in their water rates next year, as the Washington Suburban Sanitary Commission says it needs up to an 11 percent increase to keep the water utility afloat.
But Montgomery County's elected officials said a double-digit increase is unlikely because of a poor economic climate. Instead, County Executive Ike Leggett has proposed, and a County Council panel approved Monday, a ceiling of 9.9 percent.
An 11 percent increase would mean that the average residential ratepayer would see an increase of $74 a year. A 9.9 percent increase would mean about a $68 a year increase.
"I don't see that flying," Councilwoman Nancy Floreen, D-at large, said of a double-digit percentage rate increase.
Rate increase historyThe Montgomery County and Prince George's County councils set a limit each fall on how much the WSSC can increase its rates when it submits a budget.
Fiscal year Approved Actual 2006 2.5 percent 2.5 percent 2007 3.0 percent 3.0 percent 2008 5.3 percent 6.5 percent 2009 9.7 percent 8.0 percent 2010 9.5 percent 9.0 percent
Typically, the actual rate increase isn't too far off the ceiling set by the councils. Last fiscal year, the Montgomery County Council set a maximum rate increase of 9.5 percent and ultimately approved a 9 percent increase.
New WSSC General Manager Jerry Johnson said an 11 percent rate increase is for the agency to maintain a "stand still" budget. The utility is projecting that water use and corresponding revenues will be flat during fiscal 2011, which starts July 1.
In coming up with the 11 percent rate increase, the utility assumed that its employees would have 2 percent wage increase and 29 new positions would be created. The agency also has fewer reserve funds than it has had in previous years.
Montgomery County Council staff also suggested that an increase in service charges, known as the account maintenance fee, may be an alternative way to raise money for the utility.
The utility's rates jumped beginning in fiscal 2008, when rates increased 6.5 percent. The average residential ratepayer's bill has climbed roughly $120 since then. Before fiscal 2008, rates had not increased more than 3 percent in the last 12 years, with six straight years of no rate increases from fiscal 1999 to 2004.
The agency has been under intense scrutiny since late last year after a large water main burst in Bethesda, trapping motorists in an icy torrent. Leggett said he wants the WSSC to ensure that pipe inspections and reconstruction plans for aging pipes are preserved in any rate proposal.
