The utility that provides water and sewer services to Montgomery and Prince George’s counties could be forced to spend $2 billion to move pipes and other infrastructure to accommodate the planned widening of Interstate 270 and the Capital Beltway, agency officials told local lawmakers on Thursday.
That expense — which officials said represented a worst-case scenario — could add thousands of dollars to the utility bills paid by residents of the two counties.
The official who requested a briefing from the agency told Maryland Matters afterward he was “flabbergasted” to learn that officials with WSSC Water have been meeting with State Highway Administration engineers for years, given that the potential financial hit to consumers is only surfacing publicly now.
Lawmakers from both counties urged the General Assembly to immediately pass legislation protecting the residents of Prince George’s and Montgomery from pass-through costs that could last decades.
The enormity of the potential relocation of pipe was relayed to members of two county council committees — one from each jurisdiction — by WSSC Water’s CFO and its chief engineer. The hour-long briefing was requested by Montgomery Council Vice Chairman Tom Hucker (D), a vocal critic of the Hogan administration’s plan to widen I-495 and I-270.
WSSC Chief Engineer Mike Harmer said it wasn’t possible to determine the exact cost of relocating pipes and storm drains because the state has yet to finalize the design of its highway-widening plan. And since a concessionaire won’t be chosen until next year, it’s too soon to know which of several construction methods will be deployed.
Nevertheless, his team pegged the agency’s tab at between $1.3 billion and $2 billion, in part because the agency has large pipes near I-495. “The size of our piping around the Beltway area is basically the heart of the WSSC system,” Harmer said.
“Thousands” of other features — including storm water ponds, drains, bridge abutments and piers — would also need to be shifted to make way for the expanded highways.
“You’ve got to put ‘em somewhere,” he said. “It’s not unresolvable but it takes time and money.”
CFO Patricia Colihan said the agency would float 10 years’ worth of 30-year bonds to finance the relocation work, creating debt that WSSC Water customers would have to repay over the next 40 years.
She said she was “very concerned” about the possibility that $1 billion in additional borrowing over the first decade of the highway project could push the agency over its self-imposed debt limit.
“That’s like 25% of all the debt we issue every year,” she said. “That’s huge.”
Over the 40-year borrowing-and-payback, Colihan said, the average consumer would pay an additional $2,252. The increase “doesn’t even address the impact on operations and staff and other costs and contingencies and things that come up.”
Prince George’s Councilman Thomas E. Dernoga (D) suggested that the two councils issue a joint letter “today” indicating that the counties will not support the rate increases needed to repay the costs WSSC incurs to widen highways.
“You said that this was not going to cost the taxpayers anything,” Dernoga said, a reference to Gov. Lawrence J. Hogan Jr.’s promise that motorists who use the new Express Toll Lanes will pay the full cost of road improvements.
“If you’re going to go forward, you need to adhere to that,” Dernoga added.
The other option is to get state lawmakers to add an amendment to one of the public-private partnership bills now making its way through the General Assembly, Hucker said.
“We should get ahead of this and be on record that this is not our problem,” he said in an interview. “It’s not the ratepayers that should be at risk. … It should be the concessionaire that bears the cost of the project. They are voluntarily bidding on this project to make a fabulous amount of money and this should be built into the cost.”
In an email, Maryland Department of Transportation spokeswoman Erin Henson said that “all utility costs were included in the $9 billion to $11 billion estimate” that state officials have been using to describe the project.
“It is too early to determine what the cost would be to relocate any utilities as the Maryland Department of Transportation State Highway Administration is still actively involved in the National Environmental Policy Act process and has not recommended a preferred alternative,” she wrote.
“In addition, the recently released Request for Qualifications specifically incentivizes the developer to work with the community to reduce impacts to the community or utilities from this critical project that is focused on reducing congestion for residents that navigate the I-270 and I-495 corridors every day.”
SHA has been meeting with WSSC Water officials for two years to discuss how the road-widening project would impact the utility. Henson declined to provide a list of other utilities or private firms MDOT has had discussions with.
In a statement, the utility said it too wants ratepayers protected from any construction-related increases in their water bills.
“While WSSC Water takes no position on this project, we do not want the state to force our customers to cover the costs of moving our pipes and other buried assets,” said Chuck Brown, Director of WSSC Water Communications & Community Relations.