Maryland's highest court cleared the way yesterday for the city to recover $10.3 million from Baltimore County for water service it provided from 1983 to 1990.
The Maryland Court of Appeals, in a unanimous decision, upheld an arbitration panel's ruling and ended a long dispute over how the cost of Baltimore's water service should have been calculated.
Arbitrators reached their decision in August 1991, saying the city should have been able to use a new method of tallying rates beginning in July 1983.
The county appealed, saying that the charges were retroactive and that the panel did not have authority to make its decision under the Metropolitan District Act of 1924. The act requires the city to supply water lines to Baltimore County communities.
The court noted, however, that the county had resisted arbitration since October 1982 and agreed that the city had not been paid enough for its water.
"The arbitrators properly remedied that injustice by their award to the city from the county," the court ruled in an opinion written by Judge Robert L. Karwacki.
Judge Karwacki said the arbitrators had authority to apply the charge because they have "broad discretion in fashioning a remedy for the injustice which is found to have occurred."
Baltimore provides 97 billion gallons of water annually to 1.5 million customers in the city, Baltimore County and portions of Anne Arundel, Carroll, Harford and Howard counties.
The city began providing water service to Baltimore County early this century, and the county has demanded an increasing percentage of the supply. Between 1950 and 1988, the county's daily demand increased from 17.7 million gallons to 101.3 million while the city's dropped from 161.7 million gallons to 138.9 million.
In 1978, Baltimore officials found that an earlier method of tabulating water rates for Baltimore County was unfair to the city. Their report said the city should be able to recover from its suburban customers part of the capital spent to provide water service.