OCEAN CITY — The Mayor and Council heard a report this week on the five-year water and wastewater plan, which includes some significant changes to the town’s landscape and a slight reduction in fees paid by residents through 2020.
Ocean City Finance Director Martha Bennett and Public Works Chief Deputy Director Jim Parsons presented the five-year water and wastewater rate study to the Mayor and Council on Tuesday. The good news is the debt service for capital projects on the town’s water system has decreased, resulting in a reduction in rates for residential and commercial water customers over the next five years.
The bad news, an in-kind increase in the cost of the town’s wastewater system, due largely to several major upcoming capital projects, will result in an increase in fees for sewer service over the next five years. The net result will be slight increase in the overall fees for water and wastewater customers in the resort over the next five years, although Ocean City customers will still pay less than most of the neighbors in the county and around the region.
Currently, Ocean City residents pay a quarterly rate of $2.60 for each water fixture in their homes, but that number is expected to decrease and hold steady at $1.60 in each of the next five years. The water usage fee per 1,000 gallons currently comes in at $3.40 and that figure is expected to increase by increments to $4.29 by 2020.
On the sewer side, Ocean City residents currently pay $8.45 per fixture per quarter, but because of some significant capital projects planned over the next five years, that number is expected to increase exponentially to $9.60 by 2020. In short, the deductions in the water fee schedule will be offset by modest increases in the sewer fees. As a result, the combined fixture rate for water and sewer, which is currently $11.05, will actually go down for the next two years before increasing to $11.20 by 2020 when the debt service comes due for major sewer system upgrades.
The bottom line is the current average bill for a typical residence with 11 fixtures and 6,000 average gallons per month is $182.75. That number will gradually increase over the next five years to $198.80. However, even with the modest five-year increase, Ocean City ratepayers will stay pay less than most of the neighbors.
Included in the water and wastewater rate study is a statistical comparison with neighboring communities in Worcester and across the region. For example, while Ocean City ratepayers currently pay $182.75 for water and sewer service, Berlin ratepayers pay an average of $231.45, Newark, Md. ratepayers pay $324, Ocean Pines residents pay an average of $231 and Salisbury residents pay an average of $187.20. Also included in the comparison was Annapolis at $199.01 and Virginia Beach at $195.54.
The expected changes in the water and wastewater rates for Ocean City customers over the next five years will be influenced largely by proposed projects in the town’s Capital Improvement Plan (CIP) for the utilities over the next five years. For example, for the water system, roughly $14 million in improvements and upgrades are planned through 2020.
Improvements to the water system include a consolidated water plant at 66th Street. Currently, the town maintains two water plants at 44th Street and 66th Street, but the plan calls for consolidating the two plants into one large plant at 66th Street. Parsons explained the town could purchase a parcel of land at 66th Street currently owned by Sandpiper Energy, which would allow for the expansion of the 66th Street water plant and the elimination of the 44th Street plant.
“Sandpiper currently uses the site for natural gas storage tanks, but it will eventually bring natural gas into Ocean City,” he said. “The plan is to acquire the property in the future and expand our 66th Street water plant and eliminate the water plant at 44th Street. The 66th Street plant is almost dead center in the town.”
The cost of acquiring the property is estimated at $1.2 million, while the design and construction of the expanded 66th Street water plant is $5.5 million. Another significant change in the CIP for the water system is the consolidation of elevated water towers in the downtown area.
Ocean City currently maintains elevated water towers at 15th Street and Worcester Street. The plan calls for the eventual elimination of each of those towers, which are fixtures on the downtown landscape, and replacing them with a new single water tower at a town-owned property on 1st Street and St. Louis Ave. Parsons said operations would be improved by eliminating the two existing towers and replacing them with a single tower at 1st Street.
“We would lose that parking area at 1st Street, but it would be net gain of parking downtown because we would pick up parking in the areas of Worcester Street and 15th Street where the existing towers are,” he said.
Also included on the CIP for the water system are the replacement of water mains at the tune of around $1 million, the installation of a raw water main to 66th Street and the conversion to automatic meter reading for customers.
On the wastewater side, the CIP calls for expenditures over the next five years of over $28 million. The big ticket item is the replacement of sewer mains at $15 million. Also included is a fourth secondary clarifier and associated improvements at $6 million. Parsons explained the town currently operates three clarifiers in the sewer system, but a fourth is needed as an insurance policy on the three existing pieces of equipment.
“We had a pretty good scare three years ago when we lost one clarifier and lost a second one for a brief period of time,” he said. “We were on thin ice there for a while, and with the age of these other three, it’s time to add a fourth.”
Most of the improvements and expenditures for the water and wastewater systems are directed at maintaining and improving what the town already has. The only expenditure directly related to growth is a new chlorine contact chamber expansion for the wastewater system at $1.5 million. Impact fees charged to new developments in the resort help cover the cost of upgrades needed to expand the systems, which can help offset some of the cost. Otherwise the expenditures associated with just maintaining the existing water and sewer capacity is borne by the existing ratepayers.