Whose Water Bill Is It, Anyway?

Baltimore Sun reporters Ian Duncan and Pamela Wood are digging into an issue that has plagued Baltimore City and Baltimore County for years: who owes what for the ages-old water delivery system that serves the region.

The County is refusing to pay the City’s bill of $23 million – money allegedly owed by the County for the difference between the actual cost to the City to provide water to County residents, and the cost the County bills its residents for that water. The County underbills it residents for the water, and then pays the difference to the City – and currently contests the amount the City is charging.

This issue has been going on for years. From the Sun’s coverage:

In the financial year that ended in summer 2014, the city issued the county a bill of about $4.8 million to make up for customers’ underpayment. Another for just under $15.5 million followed in 2015, and a bill for $2.4 million was issued in 2016. The figure for 2017 was still being calculated at the time the consultants finished writing their report.

The county hasn’t paid any of those bills, the [City’s] consultants reported.

Duncan followed the article with a tweet referencing Moody’s recent rating downgrade of the water system:

Sure enough, last December, Moody’s Investors Services downgraded the City’s senior lien water revenue bonds to Aa3 from Aa2, and its subordinate revenue bonds to A1 from Aa3. This affects nearly $1 billion in rated debt, according to the release. It cites the following reasons:

narrowing coverage levels due to recent revenue losses that breached the total debt service coverage rate covenant in fiscal 2016 and 2017, decreased liquidity to cover revenue shortfalls, and an elevated debt position that will increase given additional capital funding plans.

Moody’s cites as a potential reason to downgrade the ratings further:

Lack of reconciliation with Baltimore County on year-end true up payments[.]

Last session, MACo supported Senate Bill 709/House Bill 923, which helps homeowners avoid going to tax sale over unpaid water bills by giving counties the tools to address the problem long before those bills become overdue. The bill passed both house and was signed by the Governor.

The previous session and over the interim, MACo worked hard to stave off legislation which would have prevented counties from collecting overdue water bills – a move which, without a doubt, would have further undermined billing systems’ bond ratings.

Learn about the flood of water billing legislation and related issues at this year’s MACo Summer Conference, “Water, Water Everywhere,” at the session, Like a Bridge Over Troubled Water: Know Your Water Law.

The MACo Summer Conference will be held August 15-18, 2018 at the Rowland Powell Convention Center in Ocean City, Maryland. Learn more about MACo’s Summer Conference:

 

 

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