MINUTES

PUBLIC HEARING

UNIFORM RATE BENEFIT ASSESSMENT CHARGE

APRIL 26, 2005

The meeting commenced at 7:05 p.m. In attendance were MetCom Commissioner Tim Wood, staff members King, Shreve, Frederick, Bryan; and attendees noted on the attached list.

Mr. King welcomed the public and introduced the officials present. He stated that the purpose of tonight’s meeting is to discuss the new proposed method of financing the following capital improvements:

·  Water lines, sewer lines, water elevated storage tanks, and wastewater treatment plants;

·        Replacing and upgrading facilities as required by the State;

·     Expansion necessary to keep pace with population growth within the County; and

·       The ability to office service to those areas that need it.

Following a brief summary of MetCom’s Mission Statement and the law under which it operates, Mr. King stressed that the Commission is financially self sufficient; with the required funds originating solely from its customers.

The Service Charge generates revenue to fund personnel, chemicals, equipment, electricity, gasoline for vehicles and maintenance of the water and sewer systems. The method of calculating this charge to a single uniform rate was implemented in 1993. Applying the same principle to the Benefit Assessment Charge (BAC), which is responsible for repaying the debt service on water/sewer lines and other facilities, became the subject of lengthy debate over a prolonged period of time. With the assistance of an expert on financial management systems for public utilities, it was finally approved by the MetCom Board.

At this point, Mr. King invited Mr. Shreve to give a Power Point presentation, a copy of which is attached to the Minutes. A copy is also available for viewing on MetCom’s website at www.metcom.org. Mr. Shreve stressed that the numbers have been updated since the initial Public Hearing held in February. They are staff’s best estimate at this point and are subject to change.  

Questions/Answers

Q.        From Mr. Goddard Leonardtown/Hollywood Road: (a) When MetCom installed the public line in the area 13 years ago, only a specified number of houses were eligible to be connected. Although the line has not been upgraded since that time, why have additional people been permitted to hook up to it? Doesn’t this present an “overload” risk considering that it’s only been designed for a certain capacity? (b) Is it wise that the effluent goes into Leonardtown, when that treatment plant’s problems are widely recognized?  

A.         The system you refer to is the Tin Top Hill Sewer System: (a) The system was not designed just to serve existing houses. There was additional capacity provided for lots in that area, and allocations were made at the time. What’s happening now is that some of these lots are being built on. No new allocations are being granted. (b) Leonardtown’s proposed expansion will allow growth within this area and, hopefully, provide for a small amount of additional capacity to the County. The exact number is being determined at this point.

Q.        Also from Mr. Goddard: I have noticed a lot of building projects occurring within the County. Does the contractor pay for the installation of these sewer lines, or does the homeowner have to pay for it when the lot is purchased?

A.         When the developer builds a subdivision, several things can happen:

·        If the sewer line already abuts his property, he will pay benefit assessment charges for his share of the cost of the original installation by MetCom;

·         Sewer and water lines built within his community are at 100% of his cost;

·        If the sewer/water lines are located at a distance and have to be conveyed to his development; that will also be at 100% of his cost.

·        If the development is located in an area outside of Lexington Park that does not have service through its water system and may not be servable by the treatment plant, e.g. Forrest Farms, the entire cost of building the water and sewer system will be his responsibility

·        However, there are occasions when a developer has to pay for 100% of the cost to build a treatment plant, and sewer and water systems in a development located in a very remote area which does not have access to public water and sewer. In this instance, Metcom will pay the extra cost to expand the line if it determines that it might eventually have to serve other customers in that area in the future.

Q.        From Mr. Jack Evans, Oak Hill Lane, Wildewood: What is the unit cost of the water meter I have? Is it added to the debt service charge?

A.         $14.85 is the average water meter service charge. The Commission does not propose to make a change in the amount this year. However, it can either increase or decrease depending on MetCom’s Operating Budget.  

Q.        Does the debt service charge replace the Benefit Assessment Charge, and will it continue indefinitely?

A.         Yes. The current benefit assessment charges are tied to the life of the bond issues. The proposed uniform benefit assessment charge will continue in perpetuity, for the simple reason that there will always be a need for replacements and upgrades.

Q.        Is the debt service charge going to fluctuate? Will this change in future years?

A.         Yes, it will change and either increase/decrease as the Commission’s Capital Improvements budget is influenced by new State requirements, as new facilities are identified for replacement, etc.

Q.        If repairing, upgrading, etc. provides part of the service, why have a separate line item on the bill?

A.         The Commission may eventually reach the point where it will only have a single charge. However, the change would be too extreme at this point in time and would make it impossible for customers to determine if rate increases are the result of operating cost changes or the result of changes in debt service costs. The Commission feels that it would be better to achieve this result incrementally. This will allow both staff and customers sufficient time to experience the advantages and disadvantages of the changes now being proposed.

Q.        What happens to those people who only have either water or sewer? How are they charged?

A.         If you only have sewer, you would just need to pay the sewer uniform benefit assessment charge. There are also people, particularly in the northern part of the county, who only have water.

Q.        Are there any handouts available?

A.         No but, as mentioned earlier, the presentation will be available for viewing on the Commission’s website at www.metcom.org. However, if you would like a copy, leave your name with staff and it will be mailed to you.

In conclusion, Mr. King thanked attendees for coming to the meeting and invited their written comments within the next ten days.

The Hearing ended at 8:15 p.m.