Commissioners Accepts Bi-County Infrastructure Funding Working Group Report

Group works to ease rate burden on customers

| News Release

OFFICE OF COMMUNICATIONS AND COMMUNITY RELATIONS

FOR IMMEDIATE RELEASE

Laurel – June 21, 2012: WSSC Commissioners have accepted a report by the Bi-County Infrastructure Funding Working Group that sets a blueprint for funding the utility system’s infrastructure renewal needs over the next 30 years.

The Working Group’s task was to look at various options to cushion the financial burden on rate payers identifying sources of revenues to pay for the rehabilitation and replacement of the WSSC’s aging water and wastewater infrastructure. The plan recommends short-term, medium and long range options to fund infrastructure renewal.

The recommendations by the Working Group include:

  • Savings realized through funding debt over a longer period of time. Cash generated by the sale of assets such as timber, real estate and unneeded capacity at Blue Plains can be put toward funding infrastructure improvements.
  • A comprehensive evaluation of the existing rate/charge structure and separating the costs of infrastructure renewal into a separate fee or charge.
  • Restructuring customer bills to show the amount going toward infrastructure renewal.
  • Establishing a more robust and comprehensive Affordability Program.

 

The Working Group, which includes representatives of the WSSC Commissioners, the General Manager/CEO, representatives of the Prince George’s and Montgomery County legislative and executive branches, as well as WSSC management staff, delved into the operating budget process, the capital budget process and the Commission’s financial policies and practices. The Working Group hired Raftelis Financial Consultants and its sub-consultants to assist in the development of a work plan and to analyze options.

Major areas of the work plan included:

  • Financial Instruments and Funding
  • Finance Operational Review
  • Revenue Generation Structures and Practices
  • Customer Affordability Program


“This study provides the Commission with an excellent blueprint on how to fund our work to systematically, over a period of time, replace and maintain our aging infrastructure so we can avoid massive water main breaks that would negatively affect everyone,” said WSSC General Manager/CEO Jerry N. Johnson. “But we need to be clear about what this plan does and doesn’t do. It won’t reduce water rates. It will ease the burden on customers by lessening what could be steeper increases in rates.”

About one-fourth of WSSC’s 5,600 miles of water main are 50 years and older. In recent years, WSSC has ramped up its program to replace aging water mains. The goal for water main replacement in FY12 was 41 miles but WSSC will manage to replace about 59.5 miles. By FY 2015, WSSC expects to replace 55 miles of water main per year and for every year from that point on. It costs an average of $1.4 million dollars to replace a mile of water main .

A Customer Affordability Program for lower income customers will be a major component of future plans. As rates rise, the program will provide institutional relief from high water/sewer rates for those who meet certain crtieria.

The resolution also directs Johnson to create an implementation plan with a progress report due in October.

Bi-County Infrastructure Funding Work Group Report [pdf; 2MB]

For 100 years, WSSC has proudly served the citizens of Prince George’s and Montgomery counties – providing drinking water that has always met strict Safe Drinking Water Act standards and protecting the environment through vital water resource recovery services. Our vision is to be THE world-class water utility, where excellent products and services are always on tap.

 

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