AGENCY DESCRIPTION
WSSC Water is a bi-County agency directed by a board of six commissioners, three each from Prince George's County and Montgomery County. The commissioners are appointed by the respective jurisdiction's County Executive and confirmed by its County Council.
WSSC Water is responsible for providing water and sanitary sewer service within the Washington Suburban Sanitary District, which includes most of Montgomery and Prince George's Counties and which, in Montgomery County, excludes the Town of Poolesville and portions of the City of Rockville.
PROGRAM DESCRIPTION AND OBJECTIVES
The principal objective of the Capital Improvements Program (CIP) is the programming of planning, design, land acquisition, and construction activities on a yearly basis for major water and sewerage facilities. These facilities may be necessary for system improvements and/or service to existing customers, to comply with Federal and/or State environmental mandates, and to support new development in accordance with the Counties' approved plans and policies for orderly growth and development.
The CIP submission includes all major projects, defined as extensions, projects, or programs involving water and sewer facilities. Major projects include: water mains 16 inches in diameter or larger, sewer mains 15 inches in diameter or larger, water or sewage pumping stations, force mains, storage facilities, and other major facilities.
The section following this narrative ordinarily shows only the WSSC Water project description forms (PDFs) for which the County Executive recommends changes to the commission's request. Those PDFs would be preceded by project briefs which provide a description of the change and the County Executive's rationale. The complete set of PDFs submitted by the commission can be found on the WSSC Water website at https://www.wsscwater.com.
In addition, a report noting the commission's request by project follows the same report outlining the County Executive's recommendation by project. For this year's proposed CIP budget, these additional documents will not follow this narrative given that the County Executive is not recommending changes to the budget proposed by WSSC Water.
PROGRAM CONTACTS
Contact Sunil Pandya of WSSC Water at 240-876-7101 or Seamus McNamara of the Office of Management and Budget at 240-777-2755 for more information regarding this agency's capital budget.
CAPITAL PROGRAM REVIEW
This narrative applies only to the Montgomery County and Bi-County water and sewerage projects. Projects that serve only Prince George's County are not included.
Agency Request
The total of $1.77 billion in six-year expenditures proposed by WSSC Water for FY27-32 is $54.9 million (3.0 percent) less than the FY26-31 approved total of $1.83 billion. The decrease in six-year costs is the result of cost changes in both the water and sewer projects.
The FY27-32 CIP request includes 26 ongoing projects, and 2 pending closeout projects. There are 15 Information Only projects.
The following table compares the proportion of funding for Montgomery, Prince George's, and Bi-County projects in the commission's proposed CIP:
Executive Recommendation
The County Executive recommends adoption of the FY27-32 CIP as proposed by WSSC Water.
HIGHLIGHTS
- Continue development of capital projects aimed to address long-term issues in water and sewer management.
- Continue projects whose purpose is to support the extensive water and sewer infrastructure and numerous support facilities, including addressing regulatory changes, regulatory mandates, health and safety issues and business risk exposure.
- Completion of the Piscataway Bio-Energy project, the largest and most technically advanced project ever constructed by WSSC Water, to use innovative technology to recover resources and produce green energy.
- Completion of the Shady Grove Neighborhood Center project.
- Expansion of the consolidated Laboratory Division building and replacement of equipment in the building to accommodate increased workload.
- Replace and upgrade assets at the WSSC Water Support Center.
- Continue to address the consent decrees related to the Potomac Water Filtration Plant to allow WSSC Water to meet new discharge limitations.
SPENDING CONTROL LIMITS
In order to reduce the magnitude of water and sewer rate increases, the Montgomery and Prince George's County Councils adopted a spending affordability process in April 1994. The process requires the Counties to set annual ceilings on WSSC Water's water and sewer rates and debt (both bonded indebtedness and debt service), and then to adopt corresponding limits on the size of the capital and operating budgets.
While the spending limits technically apply only to the first year of the six-year program, the purpose of the limits includes controlling debt, debt service, and rate increases over the longer term. The FY27 spending control limits adopted by the Montgomery County Council are shown below with their outyear projections. For FY27, while WSSC Water presented scenarios for both 6.0 and 7.0 percent base case rate increases and the County Executive recommended a 7.0 percent increase, the Montgomery County Council adopted a limit of 6.0 percent increase and the Prince George's County Council adopted a limit of a 5.0 percent rate increase.
The chart below lists the various spending control limits for FY27 and outyear projections for FY28-32.
WSSC WATER'S LEVEL OF BONDED INDEBTEDNESS
Debt Service
The County Executive and County Council monitor WSSC Water's bonded indebtedness and debt service level. Total outstanding water and sewer bond debt has risen 44.3 percent since FY20, and total water and sewer debt service is up 27.9 percent over the same period, as shown in the following table:
The debt service ratio is projected to be 33.1 percent in FY26. The table below lists projected debt ratios for FY26-31.
Debt Capacity
State law provides for the option of a tax levy against all assessable property in the Washington Suburban Sanitary District by Montgomery and Prince George's counties to pay for the principal and interest on WSSC Water bonds. This provision, which would be exercised only if requested by WSSC Water, does not constitute a pledge of the full faith and credit of the two Counties. The amount of debt that WSSC Water issues is therefore a factor in rating agency assessments of the creditworthiness of Montgomery County. In addition, increasing levels of debt service can lead to increases in the combined water and sewer rate.
"INFORMATION ONLY" PROJECTS
WSSC Water is obligated by State law to submit for CIP review and approval only major water and sewerage projects. However, the commission undertakes other kinds of capital projects which are shown separately in the CIP. These "Information Only" projects may be included for a number of reasons including: fiscal planning purposes; to improve the reader's understanding of the full scope of a specific set of projects; or in response to a request from one or both of the county governments. "Information Only" projects are subject to review and approval as part of the annual WSSC Water operating and capital budgets, which are acted on by the County Council in the spring.
The FY27-32 "Information Only" projects include the Water Treatment and Storage, Water Distribution, Wastewater Collection, General Facilities, Innovation and Investment Priorities, and Mixed-use projects.
The total FY27-32 budget for the "Information Only" projects is $2,570.0 million, a $61.4 million or 2.3 percent decrease from the $2,631.4 million approved for the FY26-31 CIP. This decrease is primarily the result of reductions to water distribution and innovation and investment priorities.
The accompanying metrics for miles of water main replacement and sewer main rehabilitation can be seen below in the following table.
PROGRAM FUNDING
The WSSC Water CIP is funded through a variety of sources described below.
WSSC Water Bonds
WSSC Water raises revenue for CIP projects by issuing water and sewer bonds. These bonds are amortized through periodic charges to the users of water and sewer services. Bond funding for the FY27-32 six-year CIP for Montgomery County and Bi-County projects, as recommended by the County Executive, is $1,557.3 million.
System Development Charge
The System Development Charge (SDC) is a charge to new development to pay for the part of the CIP which is needed to accommodate growth. WSSC Water collects SDC revenue from charges to builders based on the number and type of plumbing fixtures installed in new construction projects. The County Executive recommends that $98.0 million in SDC funds be used to fund growth projects from FY27-32.
State Aid
The total State aid budgeted for the FY27-32 six-year CIP and recommended by the County Executive is $44.2 million. WSSC Water asserts that all commission projects receiving State aid conform to the requirements of local plans, as required by the Maryland Economic Growth, Resource Protection, and Planning Act.
Federal Aid
There is no Federal aid budgeted for the FY27-32 six-year CIP.
Municipal Financing
The WSSC Water CIP contains projects in which neighboring jurisdictions such as the District of Columbia and the City of Rockville join the commission in financing the construction of sewerage facilities serving the metropolitan area. These jurisdictions contribute an agreed-upon share of the project cost. A total $66.3 million in project expenditures is recommended to be financed by these jurisdictions during FY27-32.
Contributions
When the actual costs of water and sewerage facilities required to serve new development are estimated to exceed expected revenues, the difference may be financed by developers in the form of contributions. Contributions toward CIP projects are estimated at $7.4 million from FY27-32.
STATUTORY AUTHORITY
The Montgomery County CIP review process for WSSC Water is governed by laws and regulations of the State of Maryland, the Charter of Montgomery County, and the Montgomery County Code. Relevant projects authorized for Montgomery County review include only Montgomery and Bi-County water and sewer projects.
The Montgomery County Executive reviews relevant WSSC Water CIP proposals and includes them, along with comments and recommendations, in the Executive's recommended capital improvements program budget. After a public hearing and subsequent committee work sessions, the Montgomery County Council approves by resolution WSSC Water's six-year capital program and annual operating and capital budgets, with modifications as desired.
Bi-County projects are projects located completely or partially within Montgomery County or Prince George's County that are designed to provide service in whole or in substantial part to the other County. A proposed Bi-County project may be disapproved only with the concurrence of the governing body of the county which is to receive the designated service. However, the County in which the project is to be physically located has the authority to direct modifications in project location and scheduling, provided that such modifications or changes do not prevent the service from being available when needed.
This authority to modify the project location may only be exercised during the year in which the project is first introduced. Thereafter, the authority to make modifications is limited to those changes that would not result in substantial net additional costs to WSSC Water, unless the County directing the modification reimburses WSSC Water for any additional net cost increases resulting from the modification.
WSSC Water is responsible for constructing approved capital projects on a schedule as close as possible to the schedule set forth in the adopted CIP. The commission is limited to undertaking only those projects which are scheduled in the first year of the program. However, it is not obligated to implement any project determined to be not financially feasible.
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