Oxford commissioners introduce utility fund ordinance amid debate over depreciation-driven rate increases; approve inspection contract and other routine items

Oxford commissioners introduced an ordinance to adopt the town’s utility fund budget for the fiscal year beginning July 1, 2026, and set a public hearing for June 9 after a night of questions from residents about the drivers of a proposed water and sewer rate increase.

Chair (speaker 1) opened the discussion by presenting Ordinance 2603 and announcing the June 9 hearing. Commissioner (speaker 6) moved to introduce the ordinance; Commissioner (speaker 2) seconded and the motion passed by voice vote.

Town Manager Holly (speaker 4) summarized the operational and capital context behind the budget: the town is replacing water meters using a USDA loan (new meters are live-read capable and staff expect installations to be complete by July 1), pursuing a test well (Somerset Well Drilling; pending USDA concurrence), planning a SCADA upgrade, and administering a NOAA earmark of roughly $1,000,000+ over three years for coastal resiliency that will fund a scientist and a grants writer.

Several residents pressed the commission on why utility rates have jumped. Robert Heiberg (speaker 9) and Jim Wilcox (speaker 10) asked for plain-language explanations of depreciation and why a largely seasonal town would see a sudden increase in reported operating shortfalls. Holly and the chair explained that government accounting requires annual depreciation of the new treatment plant — a step change tied to an $18 million facility — and that prior enterprise surpluses had in some years been diverted to general-fund uses. Holly said depreciation and the requirement to segregate enterprise funds (water/sewer) from the general fund are primary reasons the utility budget shows a larger non‑cash expense than residents may expect.

"The $18 million upgrade increased annual depreciation significantly," Holly said, noting that grants and capital funding that paid for plant construction do not eliminate the required depreciation charge. She added that staff will continue public engagement and account-by-account follow-up for customers who appear to have been underbilled.

Alongside the budget introduction, commissioners approved several routine items and contracts by voice vote. The commission voted to terminate the town’s third‑party inspection contract with MDIA and to authorize an agreement with 1st State Inspection Agency; Earl Dempsey (speaker 12), representing 1st State, said his firm provides building, plumbing, electrical and mechanical inspections to municipalities across Delmarva.

The commission also authorized the commission president to retain Victoria Shearer of Eccleston & Wolf for hourly legal services, renewed employee health coverage with CareFirst (effective June 1, 2026) with no change to coverage levels, and approved new life and disability coverage through Hartford (effective July 1, 2026) at a lower cost and a two‑year rate guarantee.

On public‑health measures, commissioners approved a mosquito prevention program that will purchase $1,000 worth of mosquito dunks for resident distribution and coordinate treatment/monitoring with the Department of Agriculture; the item will be funded through the general fund mosquito prevention line for FY26 and FY27.

What happens next: the commission set a public hearing on the utility fund ordinance for June 9; staff said they will continue outreach on depreciation and rate assumptions and will handle meter adjustments and credits at the account level where needed. The transcript supplied for this meeting did not include a formal roll‑call vote count by commissioner name; items were adopted by recorded voice 'Aye' responses in the meeting record.