Baltimore County’s utility billing system is outdated and fraught with inconsistencies that risk charging ratepayers inequitable water and sewer costs, according to an engineering consultant report that recommends wholesale changes to the county’s service charges.
In the draft report, which has not been made publicly available, consultants said the county should scrap its fee structure — unique when compared to a half-dozen other utilities — and reclassify certain properties, like churches and trailer parks, to align its billing system with industry standards.
The billing practices have led almost 200 Pikesville condominium owners to challenge how Baltimore County sets the price of their utilities, saying that they’ve been collectively overcharged by millions of dollars for sewer service due to decades-old rules that don’t calculate how much water condominium owners or homeowners’ associations actually consume.
County officials said the report, which was written last year, only identified “potential” inequities, but that the county is in the process of reviewing how water and sewer fees are charged. So far, no decisions about possible changes have been made.
The problem arises from how the county determines charges for water and sewer service. For condominium owners, the county issues water distribution and sewer bills that are not based on the actual water used by residents.
But engineering consultant Black & Veatch, commissioned by Baltimore County to review its utilities billing, said the county lacks “essential” data to check whether customers are paying their fair share — a benchmark needed to rebalance the billing system.
The county is an outlier among utility providers reviewed by Black & Veatch, most of whom abandoned “fixture billing” decades ago. Baltimore County spokeswoman Erica Palmisano wrote in an email that the county uses fixture billing “because meters do not exist on individual properties within certain customer classes.”
The existing rate structure and billing methodology are apparently “not based on any recent cost of service study” showing whether ratepayers properly reimburse the county — potentially impacting “alignment between customer class cost responsibility and the costs actually recovered from the various customer classes,” according to the report.
The consultant also faults the county for the way it classifies utilities customers to assess their fees; the county charges churches and religious institutions the same fee rates that residential customers pay, while mobile home parks and apartment buildings are categorized as commercial properties. Sewer and water service rates are established annually by executive order.
In a slew of recommendations, Black & Veatch said the county should first prioritize a cost-of-service and rate structure study “to determine customer class level cost of service, assess the magnitude of variance between class level existing revenues and potential cost of service, and design rates for equitable cost recovery balancing revenue stability,” according to the report.
Then, the report recommends the county revise its rates ordinances and policy manuals.
The case brought before the Baltimore County Board of Appeals by residents of the Annen Woods condominium complex could lead to an overhaul of the county’s metropolitan district billing methodology — potentially increasing costs to homeowners and other ratepayers — in order to maintain the revenue for the county fund that pays for water and sewer service and court-ordered upgrades to aging infrastructure.
Phyllis Bloom, president of a section of Annen Woods condominiums, spearheaded an effort by 195 of her neighbors to appeal water and sewer service charges tacked onto their most recent property tax bills.
The neighborhood coalition estimates Annen Woods residents were overcharged almost $600 each over the last four years.
“Morally, it’s not correct,” Bloom said. “We’re being taxed for something that we’re not using.”
Bloom and other condo owners say the county’s water and sewer fee rates cost them more for service than they should — possibly more than twice their actual water use, the coalition estimates.
The county’s methodology also means condominium owners could consume an exorbitant amount of water and avoid paying for it.
“If I walk out the door and leave the sink on in my kitchen, and walk away and come back 12 hours later, it’s not gonna make any difference” to her water distribution and sewer service charges, Bloom said.
Bloom, who has lived in Annen Woods for three years, said she began inquiring about the service charges after showing her son, a county homeowner, her 2021 property tax bill. Utility fees for the four members of her son’s family living in a three-bedroom, three-bath home were less than half the roughly $1,000 Bloom paid for her two-bedroom, two-bath condo.
“I just found it to be unconscionable,” Bloom said, noting seniors own numerous units among the four dozen condominiums in her section of Annen Woods. “People who are on a fixed income really can’t afford this kind of inequity,” she said.
Public Works rejected Annen Woods residents’ requests to revise the charges on their July property tax bills, prompting Bloom and her neighbors to jointly file an appeal with the quasi-judicial appeals board.
In the same month the residents began fighting their utilities fees, County Administrator Stacy Rodgers wrote in a July 23 email to Councilman David Marks, who had inquired about the matter, that Baltimore County has been working to address the sewer billing problem for a year.
“Ironically,” Rodgers continued in the email, “this appeal process is one of the steps that we have to take at this time in order to complete the evaluative work that we are engaged in regarding fixture billing and how to address it.”
“We mutually agree that it is problematic,” she added.
County officials would not explain why the department rejected the condominium owners’ appeals.
A county spokeswoman said the Black & Veatch report was not disclosed “as it is an internal deliberative document which does not provide finalized recommendations and instead recommends further studies and analysis which the county is currently performing.”
A $111,500 contract for Raftelis Financial Consultants is on the County Council’s Tuesday work session agenda. If approved, Raftelis would conduct a cost-of-service analysis of the Metropolitan District fund “to assist in determining whether current rate structures are appropriate,” according to fiscal notes.