Semi-annual water assessment fee adopted

(5/21) The Town Council approved extending the semi-annual water assessment fee of $100 - two payments of $50 - until the Council can decide between keeping the fee long term, raising the water rates, or a combination of both.

The fee was first applied to water bills in 2020 when the new water treatment plant was opened and it expired at the end of 2023 with nothing to replace it. 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. This year alone, the Town must pay back $286,886.

Originally the fee was $50, calculated by 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.

Commissioner Mike McNiesh proclaimed his dislike for the fee, stating that the original purpose of the fee was to bridge the gap until the Town could determine the operating costs of the water plant: "We’ve had a couple years to figure the costs out and I think it's time to raise the water rates. We don't want to, but people who use more water should be paying for what they use because it isn’t fair to those that use less water to pay for others to use more."

He was adamant that something be done before the next election, claiming "We need to take ownership of this and not pass it down to the next board."

Commissioner Betsey Brannen said she didn’t want to raise water rates but felt that both raising rates and having the fee needed to happen: "I don't like it, but I think we need to do both," she said.

Commissioner Tom Gilbert pointed out that the fee doesn't cover increased staff salaries or replacement parts. "I think we all understand we need to raise the rates," he said, "The assessment fee was just to repay the water plant loan. The water rates pay for operating expenses."

Town Manager Sean Williams agreed, explaining that the fee almost perfectly covers the state loan. It does not cover the money loaned from the general fund to the utility fund that helps cover water plant operating expenses in excess of the revenue raised by the base water rate.

In stressing the implications on not ensuring the water rates cover actual costs, Williams pointed to the recent public uproar in Emmitsburg when the Town was forced to implement a series of yearly 33% rate increases after failing to ensure that water rates cover the actual costs of water for years. Walkersville has not raised its rates since 2016, other than the special assessment fee.

One option that the Council is considering is revoking the assessment fee entirely and rolling it into general fees. It has also been suggested that changing billing from semi-annual to quarterly billing will lessen the financial impact on residents.

Williams suggested that the best option for the Council at this time would be to continue the fee for a little while longer to allow Town staff and the Council to develop a better long-term plan.

The fee was adopted unanimously and the Council is planning future workshops to create a long-term plan.