HAGERSTOWN — City officials are considering a major reexamination of Hagerstown’s water rate structure that would shift costs toward higher-volume users while lowering bills for most residents.
During a regular council meeting, Director of Utilities Nancy Hausrath, along with Conner Drucis from NewGen Strategies, introduced a proposed four-tier increasing rate model to replace the city’s current system, which charges residential and commercial users differently.
Under the proposed model, all customers would be placed in a single rate class, with water costs rising as usage increases, a structure officials say is fairer and promotes conservation.
Moving away from outdated pricing
Currently, Hagerstown uses a hybrid system where residential customers pay higher rates as their usage increases, while commercial users benefit from a declining rate structure that lowers costs at higher volumes.
City officials said that approach is increasingly outdated. “You’d be hard-pressed to find a water utility that operates on a declining rate scale model,” Councilman Kristin Aleshire said, noting the system may unfairly shift costs onto residential users.
The proposed change would eliminate that discrepancy by applying the same tiered structure to all users.
Who benefits…who pays more
The plan includes a projected five percent annual rate increase to keep pace with rising operational costs. However, impacts would vary.
Most residential customers are expected to see lower water bills, particularly those using between 4,500 and 45,000 gallons per quarter.
Low-usage households and seniors would also see slight decreases.
Commercial and high-volume users could see bill increases of 35 percent to 40 percent.
Officials emphasized that the changes apply only to the water portion of utility bills, not sewer, trash or other fees.
Impact on apartments and high-volume users
Large multi-unit properties, currently classified as non-residential, might face higher total bills under the new structure. Officials estimated that the increase could be about $4 to $5 per unit each month, depending on usage.
Council members recognized that the shift might cause concern but said it corrects long-standing imbalances. “At some point, that scale has to balance,” Councilman Aleshire stated.
Fairness and system costs
Officials noted that about 70 to 75 percent of water system costs are fixed, meaning they stay the same regardless of usage.
The new model aims to ensure that customers who put more demand on the system, especially during peak times, pay a larger share of those costs. “If you use more, you’re charged more,” Councilwoman Tiana Burnett said.
Wholesale customers unchanged…for now
Currently, the proposal does not affect the structure for wholesale customers in Smithsburg, Williamsport, and Funkstown, whose rates will still increase by 5 percent each year.
City staff said those contracts, which include a 16 percent discount, will be reviewed separately at a later date.
Next Steps
City staff is seeking the council’s direction on whether to move forward with the new rate structure.
If approved, officials hope to implement the changes by July 1, the start of the new fiscal year. If additional time is needed, implementation could shift to Oct. 1.
Staff also plan to present options for sewer rate adjustments at a future meeting.
