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Annapolis consultants warn water and sewer revenues won’t cover costs without multi-year rate increases
Summary
City consultants told the Finance Standing Committee that Annapolis’ water and sewer enterprise funds will deplete reserves within a decade unless the city implements recurring rate increases, driven largely by a 33% jump in county wastewater treatment charges.
Public works and outside consultants told the Annapolis Finance Standing Committee on April 29 that the city’s water and sewer enterprise funds will not cover projected costs under current rates, and recommended immediate, multi-year rate increases to avoid depleting reserves.
Dave Heider, a principal with Stantec, presented a 10-year financial forecast for the water and sewer funds and said the most significant new cost is an increase in charges for treatment at the county-operated wastewater plant. “They’ve gone from about $3,800,000 up to $5,000,000 in fiscal year 26. That’s about a 33% increase,” Heider said.
The consultants used the fiscal year 2026 budget as a starting point and projected operating expenses, cash-funded capital and debt service for each fund over a 10-year horizon. Heider said the combined water and sewer expenses in the starting year are roughly $21.8 million against combined revenues of about $17.7 million.
Why it matters
Heider and budget staff said that, without rate adjustments, the water fund’s cash…
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