A study proposing water and sewer rate increases of as much as 67 percent over the next several years was presented to the Annapolis city council last night, drawing sharp questions from some aldermen, who wondered whether there were alternatives.

Robert D. Ambrose, an engineering consultant and project manager for Black and Veatch Corp., presented the study, which says Annapolis needs to raise rates to pay for repairing the water and sewer systems without dipping into reserve funds or borrowing. The city Public Works Department had to use reserve funds to cover a $600,000 deficit last year.

The city code states that the water and sewer systems have to be financially self-sufficient.

"The objective of the study is to design utility rates that recover the cost of rendering water and sewer service in a safe and reliable manner in the long run," Ambrose said. "The city is looking at $24 million in capital improvements to the water and sewer systems."

The study suggests three options under which rates would increase by a total of 62.5 percent to 67 percent:

Water and sewer bills would increase by 44.8 percent the first year, 5 percent the next year, 5.3 percent the third year and 4.4 percent the final year. That would bring in enough revenue to cover the department's operating costs by the end of the first year.

An increase of about 21.7 percent the first year, 15.1 percent the next year, 12.6 percent the third year and 3 percent the final year. That would make the department self-sufficient by 2002.

A 16.3 percent increase the first year, then 26.4 percent, 4.1 percent and 8.6 percent. Under this plan, the department would not be self-sufficient until 2003.

City homeowners, who use 5,000 to 35,000 gallons of water annually -- which includes most households -- are charged $1.20 per 1,000 gallons of water and $1.68 per 1,000 gallons for sewer service. Their bills range from $14.80 to $100 a year.

Ambrose introduced the first option to the city council, saying it was "ideal" because it would make water and sewer operations self-sufficient by the first year.

"It's ideal if you're the treasurer of the city, I guess," Alderman Herb McMillan said, "But not if you're the taxpayer."

McMillan, a Ward 5 Republican, asked whether repair money could be taken from the city's general reserve fund instead of obtaining it by raising rates.

Mayor Dean L. Johnson said the general fund is made up of revenues obtained from city property taxes.

"If we go into property taxes or the general fund, then we are covering the [repairs] with revenue from only 60 percent of the users because only 60 percent of the citizens contribute to the general fund," Johnson said.

The other 40 percent of Annapolis property owners are state, county and nonprofit agencies, which don't pay taxes but use water and sewer services.

Before Ambrose's presentation, Joe Baker, a Public Works Department official, outlined the city's deteriorating water and sewer systems, painting a portrait of a historic city with an old infrastructure cracking at the seams.

Handing out a map showing that most of Annapolis' water system is more than 40 years old, Baker told the city council that some water pipes in use date to the late 1800s and some sewer pipes are in danger of collapsing.

Pub Date: 3/23/99