Water, sewer hookup fees to increase

Friday, March 13, 2009

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The cost of new water and sewer hookups will increase next month, the Calvert County Board of County Commissioners decided Tuesday, March 10.

Projects whose building permit applications are filed after close of business Friday, April 6, will be subject to the new rates, which do not affect existing customers.

Presently, a water connection costs between $1,000 and $2,000 and a sewer connection between $1,600 and $3,500 per equivalent dwelling unit, an estimation of the volumes of water and waste disposal the building is anticipated to require.

But a consulting firm hired by the county, Municipal & Financial Services Group, suggested a switch to a new metric, which would set fees at a level intended to cover costs required to expand the systems to accommodate new construction.

Under the new system, which goes into effect April 9, new customers would be charged a one-time fee of $3,000 per each 200 gallons of water per day estimated to be used by the building, and $5,400 for the same estimated volume of sewage. The numbers were calculated to allow the fees to finance the $18 million total projected cost of water and sewer system expansions from the current fiscal year through FY 2018, which will end July 31 of that year.

The commissioners held two public hearings before Tuesday's vote, one during the afternoon and one at night. Only one man addressed the board, speaking at both hearings. Jason Scaggs, president of Scaggs Homes Inc., urged commissioners to reconsider the plan because the higher fees, he said, would be difficult for people to pay during a recession and might hamper development in the area.

"To raise the rates right now is really hard on builders and homeowners. We're building affordable houses in Chesapeake Beach right now," but higher rates would add significantly to the cost, he said. As an alternative, he proposed raising usage fees or metering usage.

He also asked the commissioners to change fee schedules so applicants would not have to pay permit fees immediately, but only after the permit is received. The current system can make it difficult for builders to get financing, he said.

"The issue with that is no bank is going to lend money if you don't have a permit," Scaggs said. "It would be really great for us if we could [pay later]."

The commissioners did not pursue those changes, but, based on his complaints, they decided to postpone the effective date of the change for one month, despite a staff recommendation that it take effect March 11, the day after the hearings. The delay will enable Scaggs, and others who apply before the April 6 deadline, to obtain permits at the current rates.

"Yes, I'm satisfied" by the decision, Scaggs said after the evening hearing.

In the end, the vote was unanimous despite an uncharacteristically vehement debate featuring raised voices, interruptions and occasional pounding on the table. Initially, Commissioner Barbara Stinnett (D) was upset that the changes might apply to 10 or 11 projects, already in the works, which she considered unfair because delays in project approvals might have been the result of county bureaucracy.

But other commissioners emphasized the need to get the systems on a sound financial footing, saying that the systems, which are supposed to be funded entirely through hookup and user fees, are running in the red. This, they said, was unfair to fee- and taxpayers who are then obligated to pay more for the systems than than the benefits they receive are worth.

Commissioner Jerry Clark (R) urged the board to do something, quickly, to improve the situation.

"If there is anybody who wants to make money in the community in business it's me, but we're sitting here trying to figure out a solution for three lots. The economic viability of the system is in trouble. We're not raising rates because we think, ‘oh well.' We're raising rates because we need to make improvements and renovations to the system," he said.

Commissioner Linda Kelley (R) also called for action. The changes have been pending for years, "and now we're sitting here for over an hour, diddling over 11 projects," she said.

"We have been losing money on this thing, and it's an enterprise fund [that is supposed to be self-sustaining]. I think we can all agree that taxpayers, people not on the system, should not have to pay for that," said commissioners' President Wilson Parran (D).

According to an e-mail from Utilities Bureau Chief Barry King, the commissioners voted in 2005 to adopt a seven-year phase-in of rate increases.