Havre de Grace’s City Council agreed Monday to sell water to the city of Aberdeen, marking the first time in Harford County’s history that two municipalities reached such an agreement.
Aberdeen leaders have preliminarily signed off on the deal. Its City Council is expected to affirm the transaction at its Monday meeting. A ceremonial signing between both city’s mayors is scheduled for Thursday in Havre de Grace.
Aberdeen city manager Randy Robertson said the agreement was the result of multiple years of negotiations and spurred in part by economic considerations like Harford County’s raising of water rates. At the rate Havre de Grace offers, Aberdeen could realize estimated savings of $150,000 to $200,000 a year to reinvest in its own infrastructure after paying for the pipeline the cities would build for the water.
Robertson estimated it would be two and a half to three years before Havre de Grace water runs through Aberdeen faucets as the cities design and construct the pipeline that would carry water between them.
The cities sought to use an existing, county-owned pipe that runs underneath U.S. Route 40, but the county denied them use of it.
The county has maintained that it chose to deny access because of financial and competitive reasons. “From a business standpoint, [County Executive Barry Glassman] has always used the argument: why would Burger King let McDonald’s use their equipment to fry burgers?” said Cindy Mumby, a spokesperson for Harford County Government, in January.
The county had no further comment on the subject on Thursday.
The county also said it refusedaccess because of fears of “comingling” water, Havre de Grace’s Director of Administration Patrick Sypolt said. But as late as 2017, the county purchased water from Havre de Grace as part of a deal made in the 1980s. It then sold that water to residents of county.
“That same water we have been sending though that pipe, the county has been purchasing for 30 years,” Sypolt said. “It was good enough for them to purchase it, uninterrupted, and sell it to the residents at a substantial markup, and then when we asked for a change, all of a sudden, it was not good enough.”
Sypolt said Havre de Grace’s water meets every standard set by the Maryland Department of the Environment. The city withdrew from its deal with the county in 2017, Sypolt said, because the city could not raise its rates per the agreement. As production costs increased, Havre de Grace found itself losing money on water sales to the county.
Robertson said both cities will pay for the pipeline’s construction to the edges of their municipal borders. Sypolt noted it will be the first time in Harford County’s history that two municipalities buy and sell water between themselves.
It may take some years to pay off the pipeline, Robertson said, but the move makes sound financial sense for both cities; Aberdeen gets cheaper water and possible funding for its infrastructure, and Havre de Grace gains a customer for its ample supply of water. As an added bonus, the lower rate Aberdeen pays for water could attract new residents and businesses.
“When buying houses or building businesses, rates here will be better comparatively than you might see in other places like going up into Delaware,” Robertson said. “It is just one more arrow in our quiver of tools that makes Aberdeen appealing.”
Havre de Grace plans invest the money it gets from the agreement into its own infrastructure, Sypolt said.
Aberdeen will still buy some water from the county and continue to produce its own, Robertson said.
Sypolt said both municipalities were comfortable with the deal, where Aberdeen would buy 500,000 gallons a day from Havre de Grace at $4 per 1,000 gallons. As the city buys more water, though, the price per 1,000 gallons decreases.
At Monday’s meeting, Havre de Grace councilman Jason Robertson took issue with the clause indicating that Havre de Grace could be called upon to provide up to 900,000 gallon a day, should Aberdeen request an increase.
Robertson noted that 400,000 gallons a day had been the figured discussed by two cities during negotiations and questioned whether this clause would mean Havre de Grace is locked into keeping such a large amount of water in reserve in case Aberdeen needs it.
“I just want to make sure that . . . we’re not locking ourselves into something, and we’re not going to incur additional costs for reserving that capacity,” he said.
Sypolt stressed that the city is “not locked in” to providing a reserve capacity for Aberdeen.
The issue did come up as officials “went back and forth” during negotiations, but the attorneys for Aberdeen and Havre de Grace currently agree that Havre de Grace does not have to keep a specific amount of water in reserve, according to Sypolt.
The city is not in a position, because of proposed new residential development, to make 400,000 gallons per day available for Aberdeen “at this time,” City Attorney April Ishak noted.
She said the figure is in the agreement, “but it’s not an automatic reserve.”
“It just gives us some wiggle room to look at, if they’re going to make a first-come first-served request on” additional water, said Ishak, noting 400,000 was the number to which Aberdeen officials agreed.
Robertson asked about the merit of having that number in the document.
“I think it speaks, in general, to the spirit of the agreement,” Sypolt replied. “For us, in establishing the rate structure, we gave them what I feel is a fair, but generous, bulk rate purchase agreement.”
Aberdeen will pay $4 per 1,000 gallons for the first 500,000 gallons per day, followed by $3.90 for the next 50,000 gallons, $3.80 for the 50,000 gallons after that and $3.70 per 1,000 gallons for all remaining water, according to the agreement.
“For us, we’re looking ahead, and we want them to be a customer of ours — and a robust customer of ours — for years to come,” Sypolt said. “They anticipate growing; they anticipate the need for additional water moving forward.”
Sypolt discussed some of the revisions to the agreement that came out of additional negotiations between Aberdeen and Havre de Grace following a “strategic pause.”
Such changes include greater clarification on capital improvements related to the water infrastructure between the two cities, as well as “a little more defined rate structure,” a pledge by Aberdeen to not sell water it purchases from Havre de Grace to a third party, plus a longer purchasing relationship between the two cities.
Havre de Grace officials initially envisioned an eight to 10-year agreement, giving the city enough time to recoup its investment in the new infrastructure, but Aberdeen officials wanted the term to go further, so the current agreement extends for 20 years, according to Sypolt.
“Again, it’s all about the spirit of what we’re trying to do here,” he said. “It’s a long-term relationship with one of our sister cities, and what’s good for them is also good for us.”
Councilwoman Casi Boyer sought clarification from Sypolt about a few figures regarding Havre de Grace’s capacity to produce water. Sypolt confirmed that the city currently uses 1.3 million gallons of water per day, and its permit allows it to process and provide to its customers up to 4 million gallons from the municipal water plant.
Havre de Grace would still have the capacity to provide 1.8 million gallons a day if it provides all 900,000 gallons to Aberdeen, Boyer noted.
“There’s plenty of room on the other side of [the agreement] for Havre de Grace’s growth,” Boyer said.
Robertson noted the city has about 500 outstanding permits for new construction, plus properties that could be annexed “in the near future.”
Sypolt said the city has “plenty of capacity to satisfy” the anticipated new growth.
“There is a finite amount [of water] at this juncture, but [Public Works Director] Tim Whittie has studied that intensely, and we’re very comfortable with these numbers and our ability to service all these people — Aberdeen, our current citizens and potential growth that’s coming our way,” he said.
Sypolt also noted, in response to a question from Mayor William T. Martin, that the city can apply for a permit to increase the amount it draws from the Susquehanna River to produce drinking water as processes become more efficient at the treatment plant.