November 23, 2017

MetCom Clarifies Rates

MetCom waterline
Posted for St. Mary’s County Metropolitan Commission

Recent remarks and reports concerning a Rate Study prepared for the Metropolitan Commission are incorrect. MetCom clarifies rates and the findings of the Rate Study are offered here.

The Rate Study currently under consideration applies only to MetCom’s operating costs, not the “…utility construction cost…” as suggested by an unofficial source.

The proposed new rate structure will not change the billing structure for System Improvement Charges paid by all customers, or Capital Contribution Charges paid by new customers. System Improvement Charges are paid by all MetCom customers to fund the construction of infrastructure upgrade and replacement projects.

The Capital Contribution charge is paid by new customers, primarily developers, to fund those projects which serve new customers.

The Study recommends that the Capital Reserve level be $3.5 million, and that the Operating Reserve level be $6.8 million. At the end of Fiscal Year 2015, MetCom’s reserves will be at these levels and additional allocations into the reserves are not necessary. The Rate Study does not propose raising general fund reserves by $7.9 million or raising operating reserves by $6.8 million.

The assumptions used for the forecasting model are just that – planning assumptions. Each year’s rates will be based on that year’s budget, not the planning assumptions used for the model five years out.

Additionally, the salary increases assumed in the Study were not meant to be representative of future commitments. The 4.5 percent increase would cover both the costs of existing employees and new employees. It does not represent a 4.5 percent COLA for existing employees. The MetCom Commissioners have always followed the salary modifications made by the St. Mary’s County Commissioners for County employees. A comparison of County employee increases against MetCom employee increases shows that County staff has enjoyed greater increases than MetCom employees over the last seven years.

It is correct that the ready-to-serve charges to commercial customers will increase substantially. Ready-to-serve charges have not increased since 1977. The proposed ready-to-serve charge will be based upon the volumetric capacity of the water meter serving each commercial customer reflecting the expenses of facilities required to serve that commercial need. For most of MetCom’s residential customers, monthly bills will be reduced. Residential customers will also pay a fixed ready-to-serve charge, but will then only pay for the actual water they use, rather than the flat rate for water consumption currently billed.

The Study is not meant to be a justification for a rate increase, but rather to provide a fair and equitable distribution of costs to customers; to promote resource conservation; and to meet necessary operating costs.  To review the Study, please visit our new website at www.metcom.org. Under the heading Fiscal, use the drop down tab to access Notices, Rate Study Presentation.

Additional public presentations and public hearings will be held prior to any final decision. All interested customers should watch for notices of these meetings or contact Metropolitan Commission administrative offices for more information.

Leave A Comment