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Inside City Hall: Totally confused about why your water bill keeps rising?

A Q&A about city water bills, set for a vote on Wednesday

Faucet drip

Savor each drop, Baltimore – it’s going to cost you more.

Photo by: mysanantonio.com

The city’s plan to sharply hike water and sewage rates over the next three fiscal years has been subject to widespread confusion and misinterpretation, right down to how much the increase will actually amount to.

To clear the air, here are some of the whys and wherefores of the rate increases, which are scheduled for a vote this Wednesday at the Board of Estimates and whose expected rise will be reflected in your water bill come October.

What actually is the latest rate increase?

For the first time in memory, the city wants to increase rates over a three-year period rather than for a single year. The proposed increases: 15% for fiscal 2014 (starting today, July 1), 11% for fiscal 2015 (starting July 1, 2014), and 11% for fiscal 2016 (starting July 1, 2015).

The proposed 15% hike would be the highest single-year increase ever, with the exception of fiscal 2003, when it went up 16%.

Under this arrangement, rates will jump 41.7% over the two years between June 30, 2013 and July 1, 2015. (Flubbing the math, some city officials and media have simply added up the 15-11-11% increases and come up with a 37% rise, which understates the actual rate hike.)

How does this translate to my quarterly water bill?

The water bureau has put out an example of a so-called “typical city consumer” using 170 gallons of water per day. That usage amounts to the needs of two adults. Their quarterly water and sewer bill would rise from $157 currently to $181 later this year, $201 next year and $223 in 2015.

For a family of four, these figures need to be doubled, which would make water costs about $2,000 a year by 2015. [Department of Public Works spokesman Jeffrey Raymond objected to this calculation and said it is not correct.]

Are the new rates justified?

Legally, yes. The city has the right to increase water rates as much as it likes under a 1978 charter amendment requiring water and wastewater utilities to be maintained as self-sustaining operations.

This means that the city cannot legally defer payments to some future date or allocate funds from other sources to pay for the cost of utilities. Revenues must be sufficient to retire the water bonds offered to investors, with the directors of finance and public works responsible for recommending to the Board of Estimates the rates and charges to do so.

What are the drivers of water and sewer costs?

Water bills have been increasing every year since 2008. These increases were justified as the price of meeting a 2002 consent decree between the city and the Environmental Protection Agency (EPA) and Maryland Department of Environment to stop sewage overflows into the harbor in violation of the Clean Water Act.

While the consent decree costs are still enormous (now estimated at $1 billion over the next six years) – there are even larger costs independent of the decree. These include the city’s plans to build a new water treatment plant (the Fullerton plant), replace open-air city reservoirs with underground storage tanks, install high-tech water meters and rebuild 40 miles of pipeline per year.

The city needs to increase rates to prevent such events as last November's water main break that send a torrent of water down Charles Street at North Avenue. (Photo by Mark Reutter)

The city says increased rates will allow for preventative maintenance to avoid such events as last November’s water main break that send a river of water down Charles Street at North Avenue. (Photo by Mark Reutter)

These upgrades will cost more than $2 billion over the next six years, says water bureau chief Rudolph Chow. “The 15% [rate increase] will not get me there,” Chow said in a recent interview.

But the 42% increase set over the next three years will help get the city’s financial house in order to pay for what Chow characterizes as “stabilizing the city’s infrastructure.”

According to Chow, “We have been deferring, not reinvesting, for years. The question is, do we pay now when we have control over [the system] or do we wait until the whole thing collapses.”

Not so fast, says the city auditor.

Last week, the Board of Estimates gave city auditors seven extra days to review the underlying projections of revenues, expenditures and cash balances that support the proposed rate increases.

City Comptroller Joan Pratt said auditors did not receive all of the necessary financial material from finance and public works to review the materials until a few days earlier. Pratt asked the board to delay voting on the proposed rate package until audits completes a thorough investigation of the material. The board, controlled by Mayor Stephanie Rawlings-Blake, voted down Pratt’s motion.

As it now stands, the audit department is expected to deliver its report to the panel on July 3, followed by the board’s vote on the rate increase.

Do city residents pay more than county residents?

Yes. Even though county residents receive city water and flush through city sewer mains, Baltimore County can set its own utility rates. Instead of charging all residents for increased costs, the county has a fund that accumulates fees from other sources, such as water and sewer hookups from new development. As a result, rates for existing customers are kept down. The county last raised its residential water rates in 2010 – and has no intention of raising them this year.

Otherwise, water rates in Anne Arundel County are virtually identical to the current city rates, while the rates for “wholesale water” in Howard County and “raw water” in Carroll County are much lower than city rates.

Can I get a discount on my water bills?

The city has two programs to assist low-income residents. Residents facing a turn-off notice owing to an outstanding water bill balance can receive a credit of $125 as long as they pledge to make consistent payments on their unpaid and current bills. Senior citizens are eligible for a 30% discount if their annual income is below $25,000 and they are property owners responsible for paying the water bill.

Problem is, very few customers know about, or use, the assistance programs.

According to water bureau spokesman Jeffrey Raymond, 2,000 out of 411,000 customers participate in the low-income assistance program and another 2,000 are enrolled in the senior discount plan. That makes a participation rate of less than 1% of users.

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  • Gerald Neily

    Once again amid all the hype and spin, The Brew is a breath of fresh air. The increased water rates are merely part of the city’s “fee-mania” to marginally disguise the huge differential between the city and suburbs’ property tax rates. The problem is that the property tax could actually be an efficient tax structure if levied on LAND, which unlike buildings and other investments and activities, cannot flee to the suburbs. Raising water and other fees just replaces a federal and state tax-deductible tax with a non-deductible tax. So the city loses again, as usual.

    • Barnadine_the_Pirate

      If we had some perfect utopian combination of Pigovian and Land Value taxes . . . we would still have water and sewage charges.

    • ham_snadwich

      How often do buildings flee to the suburbs?

  • River Mud

    Wait, $800 per year? Just last week, DPW’s spokesman said the average user would pay, under the FULL 42% raise “One dollar per day.” I know that when you work for the City, you get to go on Las Vegas vacations and all kinds of other fun stuff on the taxpayers’ bill, but here in OUR city household, there is a big difference between $365/year and $800/year. Classic City accounting job!

    • asteroid_B612

      I think they were just playing with words and numbers. The DPW spokesman said average user, not average household. One person is around $365 per year, a two-person household is around $800 per year, a family of 4 is around $1600 per year, and so on.

      Pretty ingenious propaganda — he wasn’t lying, but he was being dishonest.

      • ham_snadwich

        Well, they don’t expand on what his objections were (despite the underlining) , so it’s impossible to tell.

      • Baltimore765

        all this confusing information drove me to read the actual minutes for the board of estimates hearing per the City website. They were citing a customer using 21ccf a quarter. i remain confused with the brews article though.

  • Adam Meister

    Fire the some of the over 1400 employees at the bureau of water and wastewater or at least cut some of their salaries which totaled $62,896,403 in 2007. http://noconawaysin2014.wordpress.com/2013/07/01/cut-the-salaries-at-the-baltimore-bureau-of-water-wastewater-instead-of-raising-our-water-bills/

    • River Mud

      Salaries? What about their benefits packages, pension plans, City vehicles (too often seen parked under bridges all afternoon with napping employees), etc.? The cost of each of these employees is easily 4x their salary.

    • ham_snadwich

      City employees are paid *significantly* below private sector salaries and below the salaries of the surrounding jurisdictions. Like 25-30% less. No one is getting rich working for the City of Baltimore.

      • River Mud

        However, if you add the take-home vehicles (DPW, Parks, Police, other departments as well), plus the well-funded pension, plus the medical benefits, plus the 2-3x vacation and sick leave received, the total package (ignoring hours on the clock), the package per employee is roughly 10-15% lower. If you consider that most City employees max out at 32-36 hours per week, and most private sector employees in engineering and facilities work 45-60 hours per week, then I’d say the total package per worker is approximately equal. It could be argued that an engineer with $70,000 in student loans, working for a firm (no paid OT) for 60 hours per week for $70K with 10 years experience and receiving minimal benefits is “not getting rich” either.

        • ham_snadwich

          Uninformed nonsense. Most DPW workers don’t get take home vehicles and I know of very few that work less than a 40 hour week. They do get overtime, but their total compensation is still significantly below the consultants that do the same job for more money.

          Also nonsense that engineers get paid minimal benefits. $70k is about 20% lower than the norm for an engineer with 10 years of experience.

          • River Mud

            As someone who’s spent the better part of 20 years working on City DPW contracts, you can call me as uninformed as you want, if it makes you feel better. I’ve been the recipient of comments like, “I’m Retired In Place so I don’t do fridays.” And “Summer’s our black hole. It’s June 1st, so just schedule the next meeting for September.” Guess how many private sector engineers take 2, 3, and 4 week vacations in the summer? Not many.

            Next, a 10 year civil engineer (especially in wastewater) without a PE is not making $85K. Maybe in 1999. Not in 2013. And if we’re talking PE’s, how many of DPW’s engineers have PE’s and stamp their own plans (none)? Since that’s the case, shouldn’t there be a pay differential between City and private, since the private guys and gals lay their liability down on the dotted line?

            Backing up a bit, I was speaking of City employees generally (responding to comment above mine)…but since you brought it up, why do ANY City vehicles need to be take home vehicles by DPW employees, except emergency inspectors who might be on call on a specific night? Baltimore City is not NYC. You can travel across it in 45 minutes, DPW has offices throughout the City where City vehicles can and should be conveniently and safely stored, and there is no need for take home vehicles.

        • ham_snadwich

          I know several DPW engineers that have PEs, none of them make anywhere near private sector salaries. Very few stamp their own plans because the City mostly doesn’t do design work. The water department still does some in house design, but the City doesn’t have the staff or the resources to do the large scale sewershed studies, which are one of the drivers of the rate increase.
          Also, most of the liability is retained by the employer, so the salary bump for getting a PE is mostly a credential issue. The fact remains that as long as the City’s wages are so significantly below the private sector, they will never be able to attract qualified employees.

          I agree about the take home vehicles. There’s no reason for them as long as employees are reimbursed for mileage (which they mostly are).

  • Tom Gregory

    How many unfortunate people lost their homes illegally because of bogus, miscalculated water bills and inept city employees.

    • River Mud

      In almost 15 years of city residency, we’d never seen a water bill over $110. Then one day last year, we got one for almost $600, “due immediately.” No explanation. No letter. No phone call. As we were trying to get information out of DPW, who tried to claim that we “had a leaky toilet,” we finally found out why (meter readers getting high in a City truck and entering fake water data FOR EIGHT YEARS instead of simply walking down the street to check). Once confronted with the truth, DPW said, “Well, just pay what you used to pay while we work it out.” We did, and a month later we got a turn-off notice for water service due to our “unpaid” (unexplained) bill. Top notch service and accountability – remember – the City Comptroller still thinks that these same employees – not consultants – should be in charge of retrofitting the storm drains and sewers. That should go well.

  • River Mud

    Point taken (DPW), and I wouldn’t care if Bmore was singled out – they are in violation of federal standards. I’d also be curious to know, 15 years after the consent decrees started being issued across the country, how many other cities have not resolved the issue? To be fair, I know San Diego had trouble getting their act together with their combined sewer overflows (that emptied out directly into the Pacific Ocean) but I think they’ve finished their consent decree at this point.

    • ham_snadwich

      Who has resolved their issues? Almost no one. The rehab work we’re talking about requires literally billions of dollars in specialized labor and equipment. The capacity just doesn’t exist to address them in a short period of time.

      • Matthew Riesner

        Snadwich, why don’t you voluntarially sign your entire paycheck over the the city, so we don’t have to, since it is clear that you defend every tax and fee increase that the mayor has proposed.

        • ham_snadwich

          So freeloaders like you can get something for nothing? No thanks. Infrastructure costs money, and Baltimore’s water and sewer rates are way below the national average. I’m sorry you got used to cheap water, but the system needs improvement and it has to be paid for in a sustainable way. For all your griping, Baltimore is still a fairly cheap city to live in. Housing is cheap, even if property taxes are high. Jobs are relatively plentiful and we get DC area wages due to our proximity.

          I don’t particularly like the bottle tax, but it’s mostly a non-issue for me. The stormwater remediation is mandated by the EPA, and is going to pay for much needed improvements, likewise the water rate increases. Also important is that non-profits will pay for services they consume.

          What does bother me is dummies who think elected officials should “just find the money” to pay for massive public works projects. What you really need to do is move out into an unincorporated part of the county in a southern state. Your taxes will be low, but services will be non-existant.

          • Gerald Neily

            Snadwich, if you’re going to be an IfUDLIL (“If You Don’t Like It, Leave”), at least mention the option of moving to the suburbs, which is the most popular refuge among the hundreds of thousands fleeing our city. Places like Shrewsbury, PA seem to suit many of them well enough.

          • ham_snadwich

            Because I don’t really care where he goes? I’m sick and tired of every shlub that makes above the minimum wage who thinks that government fatcats are buying Lexuses with their tax dollars. The fact is that if you have a mortgage, a kid, daycare and student loans you pay very little, if anything, in taxes.

          • Matthew Riesner

            BS on DC wages…maybe for government jobs. JHU is the largest employer in the city and their wages are well below the state average for the educational level/job duties. When someone with a masters degree can makes $60k/year from JHU (and that is pushing it) and they have a $900/month mortgage & homeowners insurance, $350/month in property taxes, $1100 in childcare, $500 in groceries, $300/month in utilities, $300/month in commuting expenses (because if you take the bus, it might end up costing you a $1/minute to pick up your kid late from daycare), $200/month in health care costs, $500/month federal/ state/ local income taxes, $400/month in student loan payments, $120/month in college saving, $200/month in retirement savings …and god forbid if you want your kids to have an education that is good as your own, that is going to be at a minimum an extra $900/month… you tell me where all this extra money to pay for storm water remediation, increasing water bills, trash pickup fees, increases in taxes in fuel, income, bottles, bags, etc. are going to come from. The very poor get some of these through programs but the middle class (anyone with a viable income) does not. This admininistration has had an all out assult on the middle class in this city trying to lower their accross the board standard of living.

          • ham_snadwich

            So basically you’re saying a single person making about the median household income can afford a house, a car, healthcare, child care, pay off debts, save for college and retirement and send their child to a private school, but not have that much left over? I’m not really sure how you’re being assaulted here.

          • Matthew Riesner

            The math doesn’t add up to be able to cover all of the bases and making 60k a year is a bit of a stretch in Baltimore at its largest employer (I have a masters degree, work for JHU, and make substantialy less than that)… futhermore there is no money left for private schooling or other things like clothing themselves, putting fuel in their car, having another child, having a night out every once in a while, or bettering themselves. They are already paying more than $10k a year in taxes (maybe more when you add in taxes for sales, social security, bottles, gas, etc.) already and they are barely getting by.
            I don’t remember when saving for retirement, college, paying debts, healthcare, sending your kids where more than half of the students are able to read at or above their grade level, or a having a vehicle (if their life requires one) would be living in luxury. They don’t have the luxury of being able to force their boss to give them more pay for their expanding budget and the city shouldn’t do so either to it’s middle class to the extent it has done so lately.

  • Baltimore765

    The Brew had a previous article about how the DPW management has saved us $500M through renegotiation. Are you complaining about this? Seems about right.

  • Baltimore765

    It would please the public if the Author of this article would educate himself regarding the difference between Retail and Wholesale Water Rates. The two are not equal and the implication that County Residents pay less is wildly inaccurate. Irresponsible journalism at its finest. Well done Brew.

  • brran1

    Would having a regional utility district a la the Washington Suburban Sanitary Commission help to alleviate Baltimore City residents with being saddled with the sole responsibility of maintaining the failing system help?
    Granted, it is the city’s fault for NOT maintaining the infrastructure…

  • cwals99

    Did people notice that when the city moved to have homeowners pay their own trash pickup that the public trash pickup is now private. We have private trash companies picking up trash and now we have separate billing for trash.

    Do you know that public transportation is being privatized by the French company VEOLA. Each time an upgrade in transportation occurs the public pays for the vehicles and VEOLA runs the show….not MTA. Did you know that VEOLA is also a global water service provider? Seems as though high rates are not only about almost no corporate money coming into our government coffers…..they are building the infrastructure to hand over to a corporation like VEOLA.

    Each time we lose our public services we lose not only all ability to have a say in development and oversight, we are losing our voices as citizens. This is so important that people need to wake up from these individual pieces of information and connect the dots. We know that when a corporation owes anything public prices go up to market-value and more and quality goes down and workers are impoverished. THIS IS NOT THE RIGHT DIRECTION! GET ACTIVE AND RUN AND VOTE FOR LABOR AND JUSTICE NEXT ELECTIONS TO GET RID OF THESE CORPORATE POLS!

  • Nescio

    Our city officials are ignoring the concerns of their constituents

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