1. What criteria does WSSC use in its decision-making process given the need for new pipes, old pipe repair and replacement, processing facilities, IT investments, etc. especially as WSSC is reaching its debt limit and thus must carefully set priorities for capital spending while maintaining quality and service levels?
2. We understand the approved capital budget for WSSC includes a $250 million project to build a new anaerobic sewage treatment plant at Piscataway for bio energy. While WSSC policy does not require that a return on investment justification be provided for projects, do the economics of this project justify this large expenditure of $250 million? Or could the sewage be more economically transported to Blue Plains for processing. The documented business case dt. 6/21/12 does not address this option. Alternatively, are there other projects with a higher return on investment that have not been approved?
In fall of 2014 (FY 16 budget): $327 million, $278 million, and $219 million for a total of $824million
In fall of 2016 (FY 18 budget): $505 million, $510 million, and $429 million for a total of $1.44 billion
In fall of 2017 (FY 19 budget): $558 million, $562 million, and $545 million for a total of $1.67 billion
New debt projections for the next three years have doubled. Could you address this?4. Debt shows big drops in FY 22 and 23 for new water and sewer debt issues. Is this realistic? Are the projections based on current known costs with no contingencies for unknowns. Does this assume that there will be no change to the water loss rate which was 17.9% in 2016 and for sewer line infiltration of 40%?
5. With the new rate structure, will the highest tier (the rate paid for practically all of the water used by the largest accounts – hotels, NIH, UMd students), meet the Public Service Service Commission’s (PSC) criteria for non-discrimination? Also would let’s say anything over $17.00 per kgal be unjustifiably high and thus not meet the PSC criteria?
6. We also note a rate increase jump to 6% from 2020 to 2023. Since presumably this will be determined by the size of the CIP, the operating budget, weather events, interest rate for debt issued and change in the number of customers, it is also obvious that the first two are well within the control of the WSSC. Will the PSC weigh in as to whether such an increase is reasonable? How often has the PSC done so in the past?
7. The negative expenditure adjustments that begin in 2020 appear to be an artifice to make the debt service coverage ratio work. Is there a more rational explanation for this?
8. The expenditure increases in the fiscal plan assume no new hires (except for attrition). Are the collective bargaining agreements negotiated by the union affordable? By how much will these increase the budget? Also are the health and retirement benefits of WSSC employees similar to those of Montgomery County Government employees?
Next meeting: TBA