SMITHSBURG, Md. — Smithsburg officials are considering turning the town’s water system over to Hagerstown in a move that could lower water bills and provide millions of dollars in improvements, but questions remain about the town’s outstanding debt and other financial obligations.
The proposal prompted a lively discussion at Tuesday’s Mayor and Council meeting, with Mayor Donald Souders emphasizing the potential benefits of exploring the arrangement and Council member David Dan raising concerns about its financial implications.
“I missed a couple meetings, and you guys tried to give our water system away,” Dan quipped.
Council member Jon Snyder pointed to figures presented by Hagerstown showing that its highest water-rate tier was lower than Smithsburg’s lowest tier.
Smithsburg currently receives a 16 percent discount on Hagerstown’s out-of-town water rate and charges customers outside town limits 50 percent more than residents. Under the proposed arrangement, Hagerstown would charge the same rates inside and outside town limits.
Although some customers could see lower bills, the town would still face employee costs and other expenses currently covered by water revenue. Dan warned that losing that revenue could force Smithsburg to raise property taxes.
The town also has approximately $1 million in outstanding water-system loans, including one that may qualify for forgiveness in 2029. The council member urged Hagerstown to assume that debt and commit in writing to $10 million in system improvements.
Snyder agreed that such guarantees were important.
“I don’t think anybody up here disagrees with what you’re saying,” he said.
Souders stressed that the town had made no decision and was still gathering information about a potential agreement.
“Right now, nothing’s happening. We’re just talking about this,” the mayor said.
“For us to not move forward with gathering information because something bad might happen is foolhardy,” Souders added. “We can’t plan for anything until we actually get the information in front of us to make a decision.”
Other possibilities, including hiring Maryland Environmental Service to manage the system, also came up during the discussion. Council members noted that a separate operator could add costs to a system that already purchases its water from Hagerstown.
The mayor acknowledged the financial concerns, calling them reasonable. The council took no vote on transferring the water system.
Council pays back town funds
The council approved payments totaling about $768,000 to reimburse the town’s general fund for money previously spent on water and sewer operations.
The council agreed to repay approximately $540,000 from the sewer fund and $228,000 from the water fund toward its $320,000 obligation.
The remaining water balance will be reconsidered in the spring, leaving money available for emergencies such as winter water-main breaks.
Town investments need attention
A recent audit found that some of Smithsburg’s investments exceeded limits set by Maryland law.
The audit found that 48.75 percent of the investments in a regulated category exceeded the town’s permitted allocation of 25 percent. Council members agreed to ask First United to bring the portfolio into compliance.
Officials hope to hear from the institution in December. They also discussed the Maryland Local Government Investment Pool, which other towns use to manage public money, as a possible alternative.
Changes considered for trash collection
Smithsburg will seek bids for a new trash collection contract, with possible changes to yard-waste pickup, recycling containers and Christmas tree collection.
Council members discussed whether a different approach to yard waste could lower costs, including the possibility of establishing a central drop-off location similar to one in Boonsboro.
The town plans to review the proposed contract again Nov. 17 and seek bids in December. Officials expect to consider the proposals in January, allowing time for a change in contractors next spring if necessary.
Mayor swears in new police officer
In other business, the council welcomed Willie E. Buntley as Smithsburg’s newest police officer during a swearing-in ceremony at the beginning of Tuesday’s meeting.
After being sworn in by Mayor Souders, Buntley posed for a photograph with town officials and members of the Smithsburg Police Department.
