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Suburban D.C. water supplier is inundated by complaints Dissent prompts state to mull privatization of powerful company

An article in Monday's editions of The Sun incorrectly reported the result of the Washington Suburban Sanitary Commission's vote on a sludge-hauling contract.

By a 3-3 vote, the utility's commissioners rejected a staff recommendation to award the contract to the low bidder, Recyc Systems Inc., and were unable to break the deadlock in subsequent meetings.

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A Montgomery County circuit judge last month ordered the commission to award the contract to Recyc.

The Sun regrets the error.

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The Washington Suburban Sanitary Commission, the nation's seventh-largest water company, gushes the power of HO everywhere, from its cobalt-blue Laurel office tower capped with a giant water drop to its vast Triadelphia and Rocky Gorge reservoirs on the Montgomery-Howard county line.

Its authority, granted under state law, is unmatched by any other Maryland utility.

But the empire is leaking.

Challenged in the courts by angry customers and suppliers and in Annapolis by lawmakers fed up with complaints about its arrogance and political agenda, WSSC is a utility at a crossroads.

Supporters and critics agree that it is time to study whether a bi-county agency is the best way to provide water and sewer to more than 1.5 million customers in Prince George's and Montgomery counties.

A legislative subcommittee will vote tomorrow on a bill that eventually could turn the quasi-government body into a private company.

"We've gone too long with a bi-county agency that's primarily run by staff and with cursory oversight," said Del. James W. Hubbard, a Prince George's Democrat and sponsor of the bill to study privatization. "Most of the [utility's] commissioners don't know anything about technical aspects of the utility."

WSSC Chairman Kevin P. Maloney of Montgomery County is all for a study, while asserting the utility does the best it can while trying to serve many political masters.

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"You have two sets of delegates, two county councils, two county executives," he says. "They are not of a single mind. Some of the political entities get frustrated with WSSC and say we're not responsive. It's a two-way street."

But dissatisfied customers -- from a Hyattsville laundryman to the owner of a Takoma Park art store -- say dealing with WSSC is more like running into a dead end.

"They make up the rules as they go along," complains Jack Robinson, owner of Nutech Laundry and Textiles, who has spent thousands of dollars to take his rate case to federal and circuit court with no end in sight.

WSSC was established in 1918 by the Maryland legislature to serve 32,000 suburban customers living in the crescent of land just beyond Washington.

Despite becoming a $677 million business with more than 2,000 employees, it is still run by six part-time commissioners -- three from each county, appointed by the county executives -- who turn day-to-day supervision over to a general manager.

The agency is only marginally beholden to local authority, say Hubbard and Prince George's County Executive Wayne K. Curry.

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The two counties are powerless to alter the utility's policies and procedures. Four years ago, the county councils established spending guidelines for WSSC. But if the two bodies cannot reach a consensus on an annual budget, state law dictates that the WSSC staff's budget be adopted.

"What's happened over the years is an institution has developed that sees itself as its own sovereign," Curry told the Montgomery Journal. "Commissioners are supposed to instruct the staff, not the other way around."

The commissioners' 3-3 split along geographic lines allows the staff to run the agency and pit one county against the other, say critics such as Curry.

With its roots in state government, WSSC has more clout than other utilities.

The state Public Service Commission may review the rates charged by WSSC, but is not permitted to change them.

"We have absolutely no authority over WSSC," says PSC spokeswoman Chrys Wilson. "We keep no record of their rates."

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WSSC is required by state law to have an annual audit -- by its own auditor.

Customers who disagree with their bills or with a rate decision appeal to the WSSC; to continue the fight means paying for a circuit court appeal.

A national rate study of 114 water companies conducted in 1996 by Raftelis Environmental Consulting Group of Charlotte, N.C., found WSSC rates to be ninth-highest in the country.

Forced to pay for expansion of water and sewer infrastructure during the region's recent building boom, WSSC has half of its current operating budget tied up in principal and interest payments.

"Our debt service is high -- $1.85 billion. That's historical," Maloney says.

Montgomery County Executive Douglas M. Duncan says the bill to study privatization will help address all the issues that critics have raised.

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"The perception from the county councils and delegations is that there's no accountability, the efficiencies aren't what they should be," says Duncan. "There are concerns about bonds, level of debt, the rates charged."

Customers who have clashed with WSSC say dealing with the agency is maddening.

Jack Robinson of Nutech, involved in a bitter rate and metering dispute, complains that he can't even get the WSSC staff to define its terms.

Eight months ago, Robinson mailed three payment checks in the same envelope. The utility posted two on Friday, the day payment was due, the other on Monday. The difference cost Robinson $1,931 in late fees.

"We had 20 days to pay. We asked them to define a day -- calendar, business. We asked them to define paid -- by postmark or posting. These things aren't written down," says Robinson, who filed suit last month in Prince George's Circuit Court to recover the fees.

Robinson, a certified public accountant, wants to install separate meters for water and sewer.

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The large dryers at Nutech cause evaporation, so the laundry discharges about 11 percent less than it draws. In figuring consumption, however, WSSC meters water and assumes equal discharge.

Saying state law does not allow separate meters, WSSC refused Robinson's request last June. But during a Dec. 15 court hearing on Robinson's challenge, WSSC lawyer Robert H. Drummer acknowledged that five customers are allowed to meter sewer discharge separately.

"It's not that they have bad procedures, it's that they have no procedures," says Robinson's lawyer Deanna Zakes.

Robinson is also disputing the 16-step rate structure that he says runs contrary to Maryland law, which requires uniform rates.

His lawsuit in U.S. District Court was dismissed on jurisdictional grounds. The case has been refiled in Prince George's Circuit Court.

Dave Ingram had to go to court to secure the $11.4 million sludge hauling contract that even the WSSC staff thought he deserved.

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Ingram's Recyc Systems Inc., of Remington, Va., was the low bidder last summer. Overruling the staff, the commissioners picked the third-lowest bidder, who had made contributions to the failed County Council campaign of Commissioner Juanita Miller. Next, they reconsidered their vote, and finally deadlocked 3-3 along county lines.

Ingram sued, and last month, Montgomery Circuit Judge J. James McKenna ruled in his favor, declaring the WSSC's actions "arbitrary and capricious."

Takoma Park shop owners Toni Bruce and her son, Michael, would add "arrogant" to the judge's definition of WSSC.

Michael Bruce says he was forced to file for bankruptcy last year after a projected five-month WSSC sewer replacement in front of the custom framing and art shop closed Sligo Creek Parkway for more than a year.

"No one could get to our shop. We looked closed. Heavy equipment and pipes sat in our driveway. We were dead in the water," recalls Toni Bruce.

Although a WSSC audit of the business' books substantiated a $113,000 loss, the Bruces were offered $22,000, then $50,000, to settle, Michael Bruce said.

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Drummer, the WSSC lawyer, told them state law does not require the utility to reimburse customers inconvenienced during public works project.

Nonetheless, WSSC paid $1.5 million in damage claims in the last fiscal year.

Evicted from their shop, refused deliveries by suppliers and living off their credit cards, the Bruces finally accepted the offer.

"You can't beat them," says Toni Bruce, who has opened a new shop in Takoma Park. "It's a big blue tower instead of an ivory tower. But at least we gave them a run for their money."

Maloney, the WSSC chairman, acknowledges that "blips" will always occur when serving 335,000 accounts.

But Robinson says that's of little comfort to aggrieved customers.

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"It takes so much effort to penetrate their shell," he says with a sigh. "There's nothing that says they have to react to a challenge, so they don't. They just go limp. It's hard to carry a dead body."

Pub Date: 2/02/98


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