(3/21) With the Town on the hook for repaying $286,886 this year for the State loan used to help fund the new water plant, Town Staff asked the Council what they wanted to do with the special water assessment fee since it expired at the end of 2023 with nothing to replace it.
The fee was first applied to water bills in 2020 when the new water treatment plant was opened. The revenue from the assessment was used to pay down the principle of the 30-year loan of $7.3 million that the Town received from the State for the plant’s construction.
The fee also allowed the Town to see what the new plant’s expenses would look like without incurring more debt. At that time, the $50 fee was based on dividing the yearly loan repayment amount by 3,000 (the approximate number of water customers at the time). In 2021, the fee was increased to $100 per account.
The benefit of the assessment fee was clearly seen when looking at the actual FY-23 revenue, which was $1,599,614 and expenses were $1,632,533, leaving a difference of negative $32,919. If the assessment fee was not used, the Town’s revenue would have been $1,295,714, the expenses $1,632,533 and the difference a whopping negative $336,819.
Town Manager Sean Williams said, "The concern is if nothing is done, the bills going out in May will not have the special assessment fee, allowing the bills to average around $75. If the decision to add it again is decided at a later date or to raise the water rates, the next bill will jump dramatically and that is what we are trying to avoid."
Williams referenced the recent public uproar in Emmitsburg when the Town was forced to implement a series of yearly 33% rate increases after failing to address the deficit created by the actual costs of water in that Town for years. Walkersville has not raised its rates since 2016 other than the special assessment fee.
Williams mentioned several options to be considered as possible solutions to this dilemma. They included continuing the assessment fee and increasing the water rates or lumping the assessment fee into a flat-water rate increase per billing cycle and then also having additional billing for the special assessment moving forward. "The reality is we have to factor in the expenses when we potentially increase the water billing to customers which I know no one wants to hear," he said.
Additionally, Commissioner Tom Gilbert pointed out that the fee doesn't cover increased staff salaries or replacement parts. "It’s shortsighted if we don’t do both the fee and raise water fees. Everything goes up, that's just a cost of living, we won't always have 2016 rates here and be able to manage repairs. It's not sustainable."
Williams agreed, explaining that either the assessment fee must stay or it must become a set fee and even then the Town would need to have a set rate increase every few years until it needs to be reassessed.
The Council debated reinstating the fee until the end of 2024 to allow them time to consider their options. The concern was that the same thing could happen in December and the fee would be extended again without any changes.
Commissioner Gary Baker questioned whether applying a "sunset" or cease date was necessary. "If we put the fee in place and just let it go until it’s decided to repeal it, then whoever is on the Board in the Fall won’t need to make any decisions under a time crunch." Williams said a long-term fee without an end date was an option, but that would not force a decision to be made about the future of the special fee or water rates, so the cycle would continue.
"It’s been three years, and we still have people coming in to pay their water bill, upset with the fee being there," said Williams. "We are doing our residents a disservice if we don’t deal with this now."
Weddle ended the discussion saying he would be presenting a draft ordinance at the next meeting for the Council to review and make changes.
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