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Concerned the city's water and sewer fund is running deeper in debt, members of Havre de Grace Water and Sewer Commission urged the Mayor and City Council Monday to form an expert commission to find ways to deal with the problem before parts of the system, like the water treatment plant, above, suffer a "catastrophic failure."
Concerned the city's water and sewer fund is running deeper in debt, members of Havre de Grace Water and Sewer Commission urged the Mayor and City Council Monday to form an expert commission to find ways to deal with the problem before parts of the system, like the water treatment plant, above, suffer a "catastrophic failure." (AEGIS FILE PHOTO / Baltimore Sun)

The City of Havre de Grace should form a "blue ribbon" commission of experts to find ways to shore up the city's debt-ridden water and sewer fund that once again couldn't ends meet during the last fiscal year, members of the city's Water and Sewer Commission told the Mayor and City Council Monday night.

The fund, known as Fund 9, ended fiscal year 2015 with operating revenue at $860,180 below budget expectations, and a fund balance loss carried over from the previous year led to the fund being about $2.3 million in the red at the start of fiscal year 2016, not including $95,413 in future pension obligations, commission secretary Garrett Lyttle read in an annual report before the council.

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"In light of the recent issues in both Flint, [Mich.] and Baltimore, an aggressive [dialogue] should take place with state officials to assist in debt restructuring and/or assistance, so the city of Havre de Grace may continue its proactive management approach of its water and wastewater systems, specifically as it relates to capital improvements," Lyttle, a former city councilman, read from the report.

The "aggressive dialogue" was one of many recommendations the commission made, as money coming in from capital cost recovery fees, collected from developers and builders when the connect to the system, continued to fall far short of city leaders' expectations.

City officials have been hoping for years that Fund 9 will be saved by fees collected from new development, but an ongoing lull in building has made the fund sink deeper into debt instead.

"Insufficient investment in Fund 9's critical infrastructure increases the risk of a catastrophic failure," the commission warned in its report, noting that "the end result will be a failure to deliver adequate water supply to our citizens and/or the unnecessary discharge of insufficiently treated wastewater into the environment."

The blue-ribbon commission should consider such things as alternative water customers outside the city, aggressive marketing of new businesses and annexing enclave areas along Route 40, Maryland Avenue, Shawnee Brooke, as well as homes along Chapel Road and in Susquehanna River Hills, the commission's report states.

The commission also suggested that the city continue implementing the debt service fee, undertake further research into why water consumption has drastically dropped and address the prospect that many water plant and wastewater plant employees could soon retire, among other actions.

The debt service fee was imposed at the start of the current fiscal year with residential customers paying what amounts to a $25 quarterly surcharge on their water and sewer bill.

Mayor Bill Martin jokingly replied: "My dad used to have a saying: 'Besides that, Mr. Lincoln, how did you like the play?'"

Both he and Council President Steve Gamatoria nevertheless said the council and city administration have "big changes" in the works and positive growth in capital improvements and infrastructure continues to happen.

"This report is for [Fiscal Year] 2015. We are in [Fiscal Year] 2016 and preparing for [Fiscal Year] 2017, and it's very important for the citizens to understand that most of the [results], as far as the negative, as far as the numbers go, have occurred and it's water under the bridge, so to speak, no pun intended," Gamatoria said.

Improvements in the last six months have been "leaps and bounds," he said.

It was Martin, with backing from the rest of the council, who pushed for the debt service fee shortly after taking office last May, noting at the time it would generate revenue equivalent to 25 new connections.

The new fee instituted by the city also generated about $500,000 toward the debt, "which is extremely helpful," Gamatoria said.

The city also has a new public works director, Tim Whittie, to help the administration with the "water and sewer mess." Whittie left Harford County government at the end of 2015, where he helped implement the first increase in the county system's base water and sewer rates in two decades.

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Martin did not rule out the possibility of another Havre de Grace rate hike in the future but said he wanted to reassure residents the administration is running its water and wastewater system as efficiently as possible.

"There's many different ways to skin a cat," the mayor said about hope of finding new ways to maximize the efficiency of the system.

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