Will hold special session June 5

By KATIE FITZPATRICK

Staff writerA special town council session will be held at 8 p.m. June 5 to discuss the Chesapeake Beach utility fund budget for fiscal year 2013 after Mayor Bruce Wahl vetoed the approved ordinance to adopt the budget.

At a public hearing held May 17 prior to the council’s regularly scheduled meeting, town treasurer Leslie Porter said the operational revenues for both the sewer and water revenues included a 10-percent user rate increase from fiscal ’12, with the sewer operations revenues projected at $515,000 and the water operations revenues projected at $323,000. There were no changes in the water and sewer capital connections fees, Porter said.

Porter said there was a “modest decrease” of about 5 1/2 percent in the sewer expenses, which are projected at $1.04 million, and a 7-percent increase of water expenses, which are projected at $457,200. The capital projects expenses, which are projected at $1,928,495, include three proposed projects for Enhanced Nutrient Reduction, the Ridgefield Station water tower and E Street sewer repairs, Porter said.

The overall proposed budget ends with a slight revenue in excess of expenditures of $104,050, Porter said.

The original ordinance, which was amended, included a 10-percent water and sewer rate increase and a five-tier water use rate system and a five-tier sewer use rate system.

For the water use rate system, the first tier is for a minimum bill, which includes 10,000 gallons of usage, of $21.31. After the initial 10,000 gallons are used, the next 20,000 gallons used would be billed at $1.77 per gallon in the second tier, the next 70,000 gallons used would be billed at $1.61 per gallon in the third tier, the next 100,000 gallons used would be billed at 90 cents per gallon in the fourth tier and the next 200,000 gallons used would be billed at 43 cents per gallon of usage in the fifth tier.

For the sewer use rate system, the first tier is for a minimum bill, which includes 10,000 gallons of usage, at $37.29. The next 20,000 gallons used would be billed at $3.10 per gallon in the second tier, the next 70,000 gallons would be billed at $2.31 per gallon in the third tier, the next 100,000 gallons used would be billed at $1.72 per gallon in the fourth tier and the next 200,000 gallons used would be billed at 60 cents per gallon in the fifth tier.

Councilman Pat Mahoney said he has always considered the five tier system to be “unfair.” After the public hearing, he made a motion to amend the ordinance and drop the fifth tier of both of the water and sewer rate structures.

Wahl said the fifth tier “only affects about 7 or 8 rate payers” and the biggest consumer is the wastewater treatment plant. If the fifth tier is dropped, Wahl said, “we’re going to be raising rates on ourselves.”

“The point about the tiered structure is it more closely approximates the fixed and variable cost structure that we prepared last year than a flat rate,” Wahl said, adding that if a flat rate is charged, “it would be completely out of line because the cost to service [residents] would be subsidized dramatically by the high water users.”

Wahl said the tiered structure has been in place since 1982 and modest increases to the sewer and water rates have been proposed each year to reduce the town’s dependence on capital connection fees.

“I think this is an incredibly ill-advised action,” Wahl said of removing the fifth tier before the council’s vote.

The amendment to the ordinance passed with a 4 to 2 vote.

Councilman Bob Carpenter made a second amendment to the ordinance to reduce the 10-percent water and sewer rate increase to a 5-percent increase.

Council member Ingrid Lamb said she is “adamantly opposed to using the capital connection fees as revenues.”

Wahl said if the town did not use the capital connection fees as revenues the water and sewer rates would triple. He said a 10-percent increase for the “typical household” would be about $2 a month, which is “something that is not too hard to take.” The town proposes “modest increases” each year so the rate structure can gradually grow, he said.

“The 10-percent increase is an effort that we have made over a period of years to get us to be less dependent on the capital connection fees because they’re going to go away,” Wahl said. “The town’s going to be built out and for us to triple the rates by a factor of three in one year we’d be run out of town on a rail.”

Carpenter said the state has already “tagged on some additional revenue for the flush tax” and he believes the town needs to “give our citizenry a break.” While the average household bill would only save about a dollar a month if the 5-percent increase is approved, “a couple dollars is a couple dollars.”

“Increasing 5 percent as opposed to 10 percent, I don’t have a problem justifying that to myself or anybody that asks,” Carpenter said.

The council unanimously approved the amendment to change the water and sewer rate increases from 10 percent to 5 percent.

The council then approved the overall motion to adopt the amended ordinance, which included a 5-percent water and sewer rate increase and a four-tier water use rate system and a four-tier sewer use rate system, to approve the utility fund budget for the town in a 4 to 2 vote, with council members Carpenter and Stewart Cumbo voting against adopting the budget.

“I think we’re shooting ourselves in the foot with this,” Wahl said. He said he would “study the issue and consult with the treasurer” and decide whether or not to veto the motion, which he ultimately decided to do.

A special town council meeting will be held at 8 p.m. June 5 at the Chesapeake Beach Town Hall.

kfitzpatrick@somdnews.com