Mayor Sets 4-Year Plan To Solve Water & Sewer Fund

Mayor presented a four-year plan Monday to pull the city out of a $487,000 debt in its water and sewer fund.

The plan calls for five percent increases on water and sewer bills for each of the next four years.

"You can either pay the fiddler now or you can pay it later," Dougherty said. "I’m going to tell you now, we’re not going to be able to pay it later."

The proposal would have to be adopted by City Council during this spring's budget session.

Dougherty, members of , city staff and the water and sewer commission met for about an hour Monday night at . It was a rather informal meeting, with just two residents in attendance aside from those on the commission.

The water and sewer commission recommended that City Council approve Dougherty's proposal, said Councilman Fred Cullum, the chair of the water and sewer commission. 

"By 2016, we’ll be caught up, and actually be ahead," Cullum said. "The projection is with this proposal, at 2016, we’ll have a $642,800 fund balance, which is a little more than the $500,000 fund balance the commission has been recommending as an emergency fund."

The water and sewer fund—or, Fund 9—debt was created by the state mandated enhanced nutrient removal (ENR) program, which required more than $40 million in improvements to the .

Unfortunately for the city, the current panacea for the debt is tied to housing starts. Connection fees for new homes would help offset the debt. But the economy and poor housing market has made that a volatile proposition.

"Projection is what got us to where we’re at now," Dougherty said. "We can’t project. We can hope the economy turns around and our capital cost recovery dollars increase."

Havre de Grace is preparing to approach the Maryland Department of the Environment for assistance, but Dougherty and Cullum both noted Monday it was important to have some plans in place to show the city has long term plans to overcome the debt.

Havre de Grace’s water and sewer rates are based upon the Consumer Price Index (CPI) for the Baltimore-Washington region. , by ordinance, must reflect the CPI increase for the region.

For instance, if the CPI increase were 2.5 percent, Havre de Grace City Council would raise the rates 2.5 percent. If the CPI increase were 4 percent, Council would raise the rates 1 percent.

"We have to really make it clear to them that we have to abide by the ordinances we pass as a legislative policy," water and sewer commission member Garrett Lyttle said. "If the CPI goes up by 3.5 percent, the water rates go up by 3.5 percent."

Dougherty called it "a crooked path." raised the thought that the city could just set the increase at 5 percent, regardless of where the CPI is set, in order to simplify the process and make it clearer for residents.

Martin said he would gather thoughts from members on council before finalizing legislation to be brought before council for a vote.

Part of the mayor's proposal involves the implementation of SCADA—a Supervisory Control and Data Acquisition system—which will provide oversight of system operations at the city's . It will also involve approximately $4.5 million in upgrades to the plant's infrastructure.

"I have said at every quarterly report, my biggest concern is Fund 9," Dougherty said. "I take full responsibility for this report. I’m giving council something we feel will work."