The Board of County Commissioners approved the fiscal year 2019 budget on Tuesday, May 29, but without increases to water and sewer rates, leaving a gap between funds the system requires to function and expected revenue.
On Tuesday, the proposed rate increase failed despite the commissioners voting 3-2 in favor of it — with Commissioners Doug Howard, R-District 5, and Richard Rothschild, R-District 4 dissenting — due to a 2016 decision that requires a super majority 4-1 vote to make any changes to the rates. The mandate echoes one that applies to tax rate increases.
“There’s a reason why we passed a supermajority vote on this issue,” Howard said. “I’d guess it was to avoid this very situation.”
The situation he referred to was a case where at least two commissioners question the decision to make changes to water and sewer rates.
Budget Department staff said a decision on the rates was not necessary to pass the budget Tuesday, but the enterprise fund — one that relies solely on its revenue to function — will not have what it requires to make mandatory repairs, maintenance and upgrades to the water and sewer system in the upcoming year without them.
Commissioners decided to table the issue because they could not come to an agreement, saying they’d resolve it at a future date.
Commissioner Dennis Frazier, R-District 3, said he did not support making last-minute changes to the budget based on new information that arose at the eleventh hour.
“I voted for the 5.6 [percent] increase,” said Frazier. “Making these changes, I don’t support it. … I support a rate increase that takes care of what we have to maintain. I don't want to happen to our water system what happened to Baltimore City.”
Baltimore is seeing increased water prices currently because the city had kept them low until unavoidable increases in operational costs left officials with no choice but to raise rates, according to Carroll County Public Works Director Jeff Castonguay.
“Baltimore is trying to play catch up,” he said earlier this month. “They didn’t change their model years ago. We are trying not to be a reactive system; we want to be proactive.”
District 2 Commissioner Richard Weaver agreed with Frazier’s point.
If we keep holding off “like Baltimore City we will pay for it later,” he said.
Weaver proposed reversing the original resolution so that the water and sewer rate increases could be passed with a simple majority. When he made the motion, Frazier seconded it — but later withdrew it after finding he was one of the three commissioners, along with Howard and Rothschild, to vote for the resolution in the first place.
After some discussion, Rothschild recommended going back to the budget to take $162,000 from the reserve for contingencies so sewer and water rates in the Freedom area would only increase 4.1 percent for the upcoming year and the system would still have the funds it requires.
For FY20, the rates could be increased by 1.5 percentage points more, he suggested, so that the 5.6 percent hike wouldn’t hit residents all at once.
When commissioners voted on moving the funds, it was approved 3-2 with Frazier and Weaver dissenting. The revised budget was then passed, 4-1 with Rothschild casting the dissenting vote.
However, when the board discussed implementing the 4.1 percent sewer and water rate increase after, commissioners voted for it 3-2, with Frazier and Weaver dissenting again — still missing the supermajority required to adopt the change.
“It requires a majority to pass the budget and a super majority to make any of these other changes,” Frazier said, hands in the air.
Weaver said he just did not support the subsidy from contingency funding.
“If it’s an enterprise fund it needs to be self-sufficient,” he said. “It needs to have the funds to be able to support itself.”
But Commissioner Stephen Wantz, R-District 1, said the compromise seemed fair and that after the board approved moving funds he didn’t understand why the board would not approve the rate increase that came with it.
“The only other thing I can see is, there is no increase in water rates because we didn’t vote for it,” he said. “We’ve got a budget and there’s going to be no increase to water rates, and they’re not going to be able to do anything down there.”
Further discussions about water and sewer rate increases take place at a future date. The detailed FY19 budget can be found at www.ccgovernment.carr.org/ccg/budget.