- The Enterprise
- The Recorder
The St. Mary’s County Metropolitan Commission, which supplies central water and sewer service to almost 17,000 customers, could be changing its rate structure within the next year.
Some households that don’t use a lot of water could see bills decrease, while some businesses could see large increases.
Residential customers have been paying flat rates for water and sewer. The standard water rate allows customers to use up to 6,000 gallons a month. The new rate structure could be based on actual water used.
“Their increases are going to be substantial,” Dan Ichniowski, MetCom director, said of the impact on businesses. Bills could increase by $2,000 to $3,000 a month for some businesses that use a lot of water, he said.
Burton and Associates produced a $19,504 rate-and-fee study that was presented Thursday to some of the MetCom board members. The consultant also recommended building MetCom’s financial reserves up to deal with emergencies or variances between the operating and construction budgets.
MetCom is projected to have $7.9 million in reserves by the end of this fiscal year, but should have $10.3 million, according to the study. Andrew Burnham, senior vice president of Burton and Associates, said MetCom rates could be increased by 3.3 percent each year for four years to build up those reserves.
The cost of MetCom doing business increases on average by 3.7 percent a year, Burnham said, but MetCom’s customer growth is assumed to grow by only 1 percent a year, with about 150 new water and 180 new sewer customers a year.
The current residential monthly bill for water and sewer service is now $82.52, up 50 percent from $55.08 a month in 2007 when the rate structure was last changed. Under the new and revised rate system, MetCom could do away with its minimum monthly billed usage amount, Burnham said, and instead “bill actual consumption based upon recommended usage rates,” which “avoid low-volume users paying for something they don’t use.” Burnham said, “If they use 1,000 gallons, they get charged for 1,000 gallons.”
A typical home uses around 5,000 gallons a month, he said.
For those using less, bills “will go down,” Rebecca Shick, chief financial officer for MetCom, said this week. The actual amounts will be determined for the new fiscal 2016 budget next year, but “customers that use 5,000 gallons or less per month will see a reduction in the service portion of their bill,” she said.
Ninety-four percent of MetCom’s customers are residential, but the amount of water they use varies widely, Burnham said.
In reviewing multi-family homes, Burton and Associates found that the Greens at Hilton Run used 5,670,000 gallons of water in a month for 333 home connections, equating to 17,027 gallons of water used per connection. By contrast, the Lexington Park Senior Apartments used 144,000 gallons in a month, or 1,286 gallons per connection.
Watering plants is typically why some residences use more water than others, Burnham said.
The study also showed the water consumption of some businesses and institutions. The Harry Lundeberg School of Seamanship in Piney Point used 2,580,000 gallons of water in a month. Great Mills High School used 580,000 gallons. The Extended Stay America hotel in Lexington Park used 120,000 gallons and the Target store in California used 110,000 gallons.
Business rates will be determined using factors from the American Water Works Association. “There are still some decisions that will need to be made that will affect commercial customer rates, but currently our commercial customers are getting a break on their water and sewer bill according to industry standard billing practices and most of them will see an increase if the new rate structure is implemented,” Shick said in an email.
Only four of the seven MetCom board members were present Thursday for the briefing. “If you think this is wonderful we can go with it,” Shick said Thursday. “We do have some time to have discussions about these rates.”
There are several informational meetings to come, she said, before any rate changes are made by July 1, 2015. “It is going to be a major change, so we want to get that information out there as best we can,” she said.