Water and sewer plant costs increase

(9/15) Following the retirement of the consultant the Town has been utilizing to maintain the water and sewer plant and conduct mandatory water testing at the end of August, the Town signed a contract with Prostart to maintain the facilities.

"We were lucky in many ways," said Burgess Barnes, "Mark [the consultant] was charging us only $75,000/year, and as he only lived a few miles away, we could count on him to address emergency issues pretty much 24 hours a day at no additional costs."

But with his retirement, the Town was faced with the reality that few companies are licensed by the State to perform the necessary maintenance and testing that is required. "The lowest bid we could get was $163,000/year, more than double that which we were paying."

"Unfortunately," Barnes said, "we did not know he was going to retire when we drew up this year’s budget, so we didn’t budget for the increased costs of the new contract. However, fortunately the Town will be receiving $83,000 in water and sewer hook-up fees for Arnold’s Place, the new townhouses being built on Second Ave., so we are good for this year, but next year we are going to have to figure out how to cover the increased cost, which may include an additional rate increase in water and sewer fees to town residents."

Commissioner Cutshall noted that the $88,000 increase in the cost of maintaining the facilities, when divided between 450 users, would result in water and sewer bills going up, on average, by approximately $200/year.

Barnes acknowledged that a water and sewer rate increase may be necessary but placed the blame on past town councils for not raising rates to keep up with costs. "Until this year’s 25% rate increase, the Town had not raised water and sewer rates in 20 years. Instead, they simply borrowed from the Town’s General Fund to cover yearly shortfalls, and we carried the ‘internal loans between the Funds’ on our books for years with no intention of repaying them."

"The water and sewer systems need to be operated as a business, which means the users need to cover the costs of the systems," he said.

The Town’s auditor told the Council at its November 2023 meeting that while in a "perfect world" the water and sewer systems should pay for themselves, there is no requirement to do so, and that many small towns like Woodsboro often charge staff and office expenses related to working on water and sewer activities to accounts associated with general town affairs. She cautioned the Town that it would be wise to nail down actual costs, which the Town did in May by voting to clear the loans and reset the books on the Water and Sewer Fund.

"I don’t want to end up like Emmitsburg where lack of action has resulted in the Town having to increase water rates by 33% every year for five years. We have to do better," Barnes said.

The new water and sewer plant operators have also submitted an initial list of improvements and maintenance that they feel need to be completed to bring the plants up to satisfactory operating conditions; while some of the actions can be done under the new contract, "some of the items will result in additional unbudgeted costs, such as equipment repairs and replacements. They will give us a prioritized list once they finish all their inspections."

Commissioner Jessie Case queried the Town staff as to why equipment repairs and replacements were not covered under the new contract.

"Repairs and replacements costs were never in Mark’s contract," Town staff said. "We always had to pay for them as they came in. It’s the same with this contract. If a pump fails, we have to pay for a new one."

"One way or another," Barnes said, "in next year’s budget discussion, we need to make sure we nail down the cost of running the water and sewer plants."