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Committee reviews WSSC rate-ceiling scenarios; staff favors 10.2% while executive recommends 9.5%
Summary
Council staff presented three FY26 rate-ceiling scenarios for WSSC Water (10.2%, 9.5%, 8.5%). Staff recommended 10.2% to reduce CIP cuts and preserve financial metrics; the County Executive recommended 9.5%. WSSC leaders warned that lower ceilings would require significant PAYGo and CIP reductions and could affect lead-line replacement and facility work tied to federal mandates.
The Transportation & Environment Committee held a work session on WSSC Water spending control limits, which guide the utility's FY26 operating budget and proposed CIP through FY31.
Mr. Levchenko summarized the base case and three alternative scenarios. He said the base case assumed a 12.2% maximum rate increase for FY26 tied to fully funding the proposed CIP; each 1% of rates equals about $9.5 million in revenue. The three alternatives presented were a 10.2% ceiling (staff's preferred scenario), a 9.5% ceiling (the County Executive's recommendation), and an 8.5% ceiling. "Each percent on the rate provides about $9,500,000 in revenue," Levchenko said.
Levchenko and staff quantified likely trade-offs: the 10.2% scenario would reduce PAYGo/CIP exposure by roughly $23 million in FY26; the 9.5% scenario would require about $84 million in FY26 CIP reductions under the assumptions presented; the 8.5% scenario would require even larger cuts and likely higher rate increases in subsequent years.
WSSC budget staff said an 8.5% ceiling would likely force significant CIP and some operating reductions; water/sewer reconstruction projects were listed as examples of project types that could be affected. WSSC General Manager Larry Powell told the committee the new federal lead and copper rule (released last week) requires inventories and replacement of lead service lines within 10 years and that WSSC aims to begin that work in FY25 to avoid steep later-year costs.
Powell said WSSC rebalanced the CIP earlier, reducing program totals by about $100 million to shift funding to facility-related projects; deeper CIP cuts risk compliance and the ability to upgrade treatment facilities. Several councilmembers voiced concern that going too low on the FY26 ceiling could jeopardize financial metrics and bond ratings; others emphasized affordability for ratepayers. Chair Glass noted the county executive recommended 9.5% and staff recommended 10.2%, and the committee will continue discussions before the joint bi-county decision scheduled for mid-May.
