Baltimore Co. owes city $11 million


An arbitration panel's ruling that Baltimore County owes the city $10.2 million in a lengthy water rate dispute has been upheld in Baltimore County Circuit Court, but the amount actually owed has risen because of the inclusion of interest.

With 6 percent interest added on, the county's bill has grown to $11 million, according to a statement issued yesterday by Mayor Kurt L. Schmoke.

County Attorney H. Emslie Parks said he has not discussed the Jan. 14 decision with Baltimore County Executive Roger B. Hayden so it still is unclear if the county will appeal further.

Mr. Parks acknowledged, however, that interest charges are building.

If the county decides to pay the money, it could not be used to ease the city's operating budget woes, since it must go into the self-supporting fund that pays for city water and sewer services. Despite that, city officials have said the money could help postpone any future water rate increases.

Similarly, the money, if paid by the county without further appeal, also would not hurt the county's stressed operating budget, since it would come from a separate water and sewer fund.

The arbitration panel decision came on Aug. 22, which marked a decisive point in a 13-year argument between city and county officials over the water rates paid to the city, which maintains the metropolitan area water system.

The city operates and owns three reservoirs in the county, and also provides piped water to some parts of Howard and Anne Arundel counties. Howard and Anne Arundel were not involved in this dispute.

The city in 1978 hired a consultant who said the rates charged the county were too low, compared with city costs of operating the system. The case dragged on in discussion for years, despite a section in the 1924 agreement governing the relationship, which calls for arbitration of such disputes.

Finally, in 1987, then-Mayor Clarence H. "Du" Burns filed suit against the county to force the arbitration to begin, and the Maryland Court of Appeals finally ruled in the city's favor, saying arbitration should proceed.

The arbitration panel made the award of money effective to July 1, 1983, and interest of 6 percent per year was applied, starting Oct. 22.

The Jan. 14 Circuit Court decision was made by Judge John F. Fader 2nd. The county has until mid-February to appeal that ruling to the Court of Special Appeals.

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