Anne Arundel DPW proposes 6% water and sewer rate increase, seeks 10% jump in connection charges

Anne Arundel County’s Department of Public Works asked the County Council on May 22 to approve a 6% increase in water and sewer usage rates and signaled a separate proposal that would raise capital facility connection charges by about 10% to shore up the utility fund and meet regulatory and capacity needs.

Department of Public Works Director Karen Henry told the council the rate and fee proposals are intended to replace expiring state grant revenue, cover higher operating and construction costs, and rebuild debt service reserves required by county policy and the charter. “We were reliant on Clean Water Commerce Act grants. We’ve received $8,000,000 that’s expiring,” Henry said, adding the user-rate increase is meant to restore required operating reserves and prepare for future capital needs.

Why it matters: the county’s water and sewer utilities operate as enterprise funds that must be self-sustaining under the County Charter. Henry said aging infrastructure, higher labor and material costs, stricter permits and the scheduled end of several state grants mean the county must raise revenue to avoid drawing down reserves or borrowing under less favorable terms.

What the DPW proposed and why - Usage rate: Henry presented a requested 6% increase in the water and sewer user rate; she said the environmental protection fee (EPF), a separate charge that funds rehabilitation and debt service, would not be raised this year. “So we’re proposing a 6% increase in our water and sewer usage rate,” Henry said. The department estimates that increase will help meet the code-required operating reserve target (two months’ operating expenses) and improve near-term liquidity. - Connection charges (CFCCs): Henry said the department plans to seek a 10% increase in CFCCs under Bill 45-25. CFCCs fund capacity and expansion (debt service for growth projects). She told the council the proposed CFCC rise responds to higher project costs driven by prevailing wages, material inflation, longer equipment lead times and more stringent permit conditions. - Methodology: Henry explained that current customers pay operating costs and EPF (maintenance/rehab), while new customers pay CFCCs for expansion and growth, and she stressed the utility fund must remain self-sustaining under the County Charter. She said developers and prospective customers pay CFCCs so existing users do not absorb growth costs.

Capacity and longer-term planning Henry and staff presented capacity constraints that underpin the fee proposals. They highlighted Linthicum/BWI and Crofton areas as locations where plant, pumping-station and pipe upgrades are already in design or under way. The DPW said the Crofton Meadows plant is nearing 14 million gallons per day of use and is in design to expand to 20 million gallons a day, with longer-term planning for still greater capacity.

PayGo and debt-service considerations Henry said the department is pursuing a “PayGo course correction” to pay some projects in cash rather than bond-finance them, and that moving some eligible projects to PayGo in FY26 (about $11 million) would ease future debt-service pressure. She said inadequate PayGo historically has pushed more work into debt service, raising long-term costs.

Council members pressed about timing and alternatives Council members asked whether the council should delay a larger CFCC increase until the department completes studies now under way, including a flow-factor study that will revisit how EDUs and CFCC amounts are calculated. Henry said the flow-factor preliminary report is expected in October with a final phase report in late 2025 and a full report in 2026. Several council members urged a comprehensive rate-study before adopting larger multi-year CFCC increases.

Next steps No formal vote on rate or CFCC changes occurred during the May 22 presentation. The county’s flow-factor and rate-structure studies are scheduled later in 2025 and into 2026; DPW staff told the council they will return with refined proposals for council action and said some CFCC adjustments will be introduced as Bill 45-25 for council consideration.