In a presentation posted online ahead of a meeting this evening, consultants for the Baltimore Water Regional Governance Task Force confirmed what city residents have long known is true:  Baltimore City households pay more for water and sewer service than county residents pay for equivalent service. 

Advocates in the Baltimore Right to Water Coalition are sounding the alarm that this finding raises red flags that if the county takes more control over the system through a regional authority, city residents will face unfair rate hikes. They point to Detroit to show how a lease to a regional authority can deepen racial and economic inequity. 

Baltimore City residents are paying 12 percent more each year, an extra $176, compared to county residents, due to higher wastewater costs. At the same time, the county has fought the capital reimbursements that it owes the city. Last year, the county won a settlement to pay a mere $3 million of the $22 million it owes the city.

“We are concerned that the county wants to control Baltimore City’s biggest and most valuable asset – its essential water and sewer system. This would rob Baltimore of something that rightly belongs to the people of the city, will lead to rate hikes, and frankly it serves to feed a racist narrative that majority Black cities should not be allowed to control their own assets,” said Food & Water organizer Jomar Lloyd. 

Advocates say that a regional authority would lead to higher rates for the city by shifting the burden of future county developments to the city. Over the last three decades, the city has lost more than 20% of its population, while the county has grown by more than 20%. As the county continues to develop, water and wastewater infrastructure will need to be expanded, and in 2019 the council passed a resolution “urging the creation of a regional management authority to specifically address the future infrastructure needs of the County’s public water and sewer system.”

“County officials like to point out that because the county has grown, and the city has lost population, the county should have greater control over the city’s water system,” said Antoinette Ryan-Johnson, president of the City Union of Baltimore. “But they do not draw attention to the idea that the county has grown at the expense of the city. The question to consider is how to make sure these injustices are not compounded by taking control of the city’s most valuable asset– its water and wastewater utility– out of the hands of city residents and giving it to the county. It is now more important than ever to demand racial equity with our water system. This includes the predominantly Black labor force that services the water and wastewater system as well as the overwhelmingly Black ratepayers in Baltimore city. We again call for the Regional Task Force to engage in a racial equity study to analyze the potentially unjust impacts changing the water governance structure would have for historically marginalized populations.”

In Detroit, the lease of the regional water assets to the Great Lakes Water Authority failed to allocate costs equitably, and the city must pay 83 percent of improvement costs to the regional sewer system, even though only 30 percent of the sewer lines are within the city. 

Advocates warn that a water regional authority will be expensive to set up and could lead to rate hikes. Transition costs would include making the city whole for loss of its largest asset, keeping pension responsibilities to water workers, renegotiating or reassigning existing contracts and bulk agreements, obtaining bondholder consents to transfer bonds, and much more. This has cost tens of millions of dollars in other cases, and could cost potentially billions, to be recovered through rate increases. 

“Baltimoreans have always bore the brunt of funding the water system of the region, the Task Force’s Consultants again shows what residents have always known” said Courtland Merkel, Consumer and Housing Staff Attorney with Maryland Volunteer Lawyers Service.  “As the Task Force looks toward different governance models it’s vital that they consider the impact of taking away control of the system that primarily Black Baltimore residents created, funded, and maintained over the years.”

The Baltimore Right to Water Coalition is asking the Task Force to consider what would be an equitable compensation for the City for the loss of control of its largest asset, the $5-billion water and sewer system, if it were leased to a new regional entity, and to ensure that such compensation is not paid for by City residents through higher rates. 

Detroit received a nominal “$50 million” annual lease payment from the Great Lakes Water Authority, but those costs are allocated across the entire customer base, so Detroit ratepayers themselves pay $13.8 million of it. The net $26.2 million is a credit on the revenues that the city is required to collect on behalf of the authority. According to a report from the University of California at Berkeley, Detroit should have been paid $5.4 billion over the indebtedness period. That equity was not reflected in the transaction. 

Advocates demand that the Task Force reject a regional authority model until comprehensive racial and economic equity assessments ensure that such a change in governance will not deepen inequities or lead to rate hikes.