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WSSC Water presents FY27 plan with 6% base rate; committee favors 6% but leaves door open for 7%
Summary
WSSC Water told the Montgomery County Transportation & Environment Committee it has two FY27 rate scenarios — a 6% base case and a 7% case that would add roughly $10.5 million — and outlined $759.3 million in capital spending and $27 million in identified operating savings. Committee members voiced support for the 6% option while asking staff to coordinate with Prince George’s County and return with firmer numbers.
WSSC Water officials presented their FY27 budget framework and two rate scenarios to Montgomery County’s Transportation and Environment Committee on Oct. 6, saying the utility aims to balance service reliability with household affordability.
Keisha Powell, WSSC Water general manager and CEO, told the committee the utility has proposed “a balanced budget based on the costs we know at this time,” and that leadership had directed departments to target discretionary savings; staff returned $27,000,000 in reductions (an 8% savings relative to the prior budget). Powell described four strategic pillars guiding spending — workforce, technology and innovation, infrastructure, and customer service — and highlighted recent efforts to rebaseline the capital program to improve reliability.
Alan Wong, WSSC’s chief engineer, said the FY27 capital program totals $759,300,000, comprising in-flight projects, new FY27 launches and an other-initiatives bucket that includes lead reduction, PFAS work and Blue Plains master planning. Wong said the utility reprioritized water-main and wastewater investments after major incidents this summer, noting a $9,500,000 FY27 allocation for large-diameter water-main replacement and $8,700,000 for sewer system repairs.
Nett Timothy Musarra, identified as chief financial officer, described two preliminary rate options: a 6% base-case and a 7% scenario. Staff said the 7% case would generate roughly an additional $10,500,000 in revenue (the transcript attribution describes the extra 1% as about $10,500,000), and that WSSC’s recommendation for that increment is to split it roughly between additional PAYGO (to lower future debt service) and a cash reserve for unforeseen costs, delinquencies or tariff impacts. Musarra emphasized that the figures are working projections and that a formal budget request will be presented later in the process.
Musarra also identified major drivers of higher operating costs, including an increase in debt service (noted at $388,400,000 in the presentation), higher charges for regional sewage disposal, and rising health-care costs for employees; he said health-care costs rose by an estimated 18–22% this year after a roughly 15% increase last year. Powell added that WSSC has limited external subsidies and that most customer revenue goes back into operations and capital.
Several committee members said they appreciated the cost containment work and expressed concern about household economic strain. The Chair and multiple members said they were more comfortable with the 6% scenario at this stage, while remaining open to revisiting the 7% case as numbers firm up and as the two counties coordinate.
Next steps: staff will continue coordination with Prince George’s County with an internal goal to land on a single set of guidance by the end of October and WSSC plans to publish a preliminary proposed budget in January for public hearing and comment.
