California, MD — The St. Mary’s County Metropolitan Commission (MetCom) is investigating ways to lessen the impact of proposed rate increases on commercial users. The commission members at a meeting on Thursday, Mar. 12 delayed a decision on their proposed budget for the next fiscal year until they had time to consider other options.
Staff had presented them a budget that implemented new rates recommended in a consultant’s study. Those rates are lower for 60 percent of residential customers who use 5,000 gallons a month or less, but substantially higher for some commercial users based on the size of their meter. The rate study showed that some commercial customers would pay as much as $1,500 a month more. Extended Stay America and Target were given as examples.
It has been suggested by staff that some of the businesses may be able to avoid higher rates by switching to a lower meter size if they don’t need it. But commission member Bryan “Puff” Barthelme pointed out at the meeting that there is a fee for installing a new meter.
It also was noted by Commission Executive Director Dan Ichniowski that businesses can pass on rate increases to their customers.
The new rate structure has a combination of a fixed “Readiness to Serve Charge” and a fee based on usage. Very low usage for residential customers could save them as much as 30 percent over their existing rates.
Commission member Bob Russell noted that lowering commercial rates would cause a revenue problem which would mean jacking up rates for other users.
Commission revenue is also being impacted by lower than normal connections to the system. The commission jacked up connection fees beginning on July 1, 2014 and that caused some connection requests prior to that time to avoid the new fees.
Commission member Mike Mummaugh suggested that commission staff take the data provided by the consultant and crunch different numbers showing higher residential and lower commercial rates so they had something to compare to make a decision.
The commission has scheduled a special meeting for Thursday, March 19 at 3 p.m. to discuss the massaged rates to try to come up with consensus on how to proceed. A public hearing on the operating and capital budget and the proposed rates is scheduled for April 1 for the budget that begins July 1.
The proposed budget includes $9.5 million for the sewer division, $5.2 million for the water division, and $5.7 million for general and administrative expenses.
The operating budget includes a one-percent cost-of-living allowance (COLA) for employees at a cost of $57,367 and one STEP increase, at a cost of $154,111.
The budget includes the hiring of one new position, a Utilities Mechanical/Engineering technician, refilling of a vacant Senior Inspector position and moving a legal assistant from 32 hours to 40 hours per week.
The budget also includes a $50,000 salary study of MetCom staff. That expense was questioned. Chief Financial Officer Beck Shick said she felt a study would show that commission salaries were not in line with other in the region. But commission members were told they only lost five employees in the past year,
Shick is estimating a five-percent increase in health insurance premiums. The budget also includes putting aside $397,000 in the OPEB (Other Post-Employment Benefits) fund for future retiree health costs.
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