“Council Backs WSSC Request for 7% Rate Increase” was the headline at taxpayer sponsored MyMCMedia.org.
Instead of an 8% rate hike on water, which WSSC initially asked for, the Montgomery County Council decided to be kind of frugal, in a MoCo sense, and “unanimously voted to support Washington Suburban Sanitary Commission Water’s (WSSC) request to increase rates by 7%.” Keep in mind — 5 years ago this very company (WSSC) said it only projected 6% rates hikes would be requested for the fiscal years running up through FY 2024.
Why is a rate hike needed at all right now? Nobody seems to really dive into the details. Certainly not MyMCMedia.org. Yes, inflation is impacting all businesses and the construction industry is hard hit with cost over-runs. Understood. Costs will rise.
But besides that fact, instead, it appears to just be taken at face value by our County Council that:
“According to a report from WSSC, heat, light and power have increase by $8.56 million, and salaries also have increased.”
Also, debt service costs (interest on debt) are up another few million dollars – actually close to $5 million more in new interest costs (a preview of what is to come for local governments and local government “units” addicted to low interest rate debt). On page four of this February, 2023 memorandum to a MoCo Council staff report submitted to the “Transportation and Environment Committee” it states: However, Fitch retained a negative outlook [for WSSC] based on leverage that may exceed or remain near 10.0x for the next couple of years.
WSSC constantly needs more money, even when inflation isn’t raging nationally at 7-8% (officially) and when construction costs and contracts aren’t spiking in the near-future. Why? Does anybody stop to ask “why” in the County Council offices?
Here is a headline from [formerly] Bethesda Magazine on May 1, 2020 – three years ago. Inflation wasn’t 7-8% back then. It was still “officially” 2% or less according to the federal government’s BLS.
Here is another one I found in 5 seconds of searching. This one is from five years ago at [formerly] BethesdaBeat.org (now MoCo360 Media) courtesy of Andrew Metcalf:
Mr. Metcalf actually does some solid reporting here in stating:
The utility is proposing annual 6 percent rate increases for fiscal 2020 through fiscal 2024, even though water usage is flat or declining, council staff reported. The increases are proposed to continue funding capital improvements.
Also (again, this was five years ago):
Council member Nancy Floreen previously challenged the agency at an April 23 council committee meeting. She said the fact that the agency is a creation of state law enables it to “escape a lot of scrutiny.”
What has changed about this situation, except the WSSC General Manager? According to this report from June 2021, on page 14 it states about 283 employees of WSSC are making six figures, between $100,000 and $125,000 a year. No doubt compensation is needed to retain talent – but is this level really needed? Has it been scrutinized by the Montgomery County Council?
One quick note about the new WSSC GM as well, who does have a lot of experience in prior municipalities including work for Jackson, Mississippi local government. This is from JacksonFreePress.com in May of 2016 (Tim Summers Jr. reporting):
“One of the highest-paid city employees with a $150,000 salary, Powell inherited multiple commitments during her tenure including a $90-million Siemens contract rife with difficulties in implementation, an Environmental Protection Agency-mandated consent decree, and a long list of contracts attached to the 1-percent sales tax commission.
Accusations about helping steer certain city contracts to the mayor’s campaign contributors, pushed by his political rivals, placed Powell’s department under scrutiny of both the public and the Jackson City Council—and caused her consternation that she expressed in a recent interview with the Jackson Free Press.”
Jackson, Mississippi continues to have a tap water crisis to this day. Kishia Powell denied any such steering occurred by her (in the article cited above).
Back to the main point: WSSC needs a thorough spotlight prior to any rate hike on water, period. It is a shame the MoCo Council simply refuses to be that bulwark and shrugs when asked to defend the rate-payers, also known as the taxpayers, of this county.
More to come.
Related posts:
Is WSSC Serving the People of MoCo or Companies & Lobby Shops With Donor Ties to Local Democrat Politicians?
WSSC Office of Inspector General Reporting on In-House Procurement Office Performance Reveals Much to “Be Improved”
A Property Tax Hike, But By WSSC? Fitch Ratings Revision for WSSC Shows What Could Be in Store for MoCo Residents