(7/6) Following last month’s meeting and discussion regarding what exactly was being charged to the water fund that necessitated the decision to raise water rates 36% a year for the next five years, Commissioner Amy Pollitt continued to question the necessity and legitimacy of the charges to the town water fund.

Commissioner Amy Pollitt said her issue was that Emmitsburg just raised water rates significantly and only last month found out that approximately 15 of 17 town employees charge a portion of their salary to the water fund, as opposed to her prior belief that only those who work in the actual water plant charged to the water fund. Pollitt said she was concerned the charges by administrative staff to the water fund would dip into "money that would help bring us back up into the black."

Pollitt was not against giving a cost of living raise to town staff, but said that on the heels of raising the water rates "a potential seven percent increase in salaries, the cost of which will be funded in part by the water fund" was a little hard for several residents to swallow. "I would like to see checks and balances put in place to ensure the percentage of staff time being charged to the water fund is accurate and not an estimation.

"I would also like to see if there is a way to shift where the money is coming from so the Town was not draining the water fund," she said. "Where is the line between what is charged to the water fund and what is charged to the general fund?" she asked.

In response to Pollitt’s questions, the town’s auditor, Michele Mills, who had been brought in to answer questions about how costs are accounted for in the water fund, startled both the staff and the Town Council by admitting that is was possible to transfer funds from the general fund to the water fund. "It’s not really preferred, but it’s not disallowed," said Mills.

"I was under the understanding that the loan from the general fund to, say, the water fund, it had to be project specific, or is that not the case?" Willets asked the auditors. Mills told Willets that subsidized funds do not have to be specific to a project or paid back.

Pollitt questioned why that information had not been brought to the attention of the council before and Ritz and Willets said while the question has come up, they had been told it was not an option.

According to the town staff, the Town’s accountant and the state environmental department told them that the Town’s water fund must be self-sufficient or they would not be eligible for grant funding, and the water fund must be self-sufficient. And it was based upon this understanding that the recent water rate increases were pushed through.

Pollitt questioned the necessity of raising water rates when the Town was sitting on approximately $9 million in a rainy-day fund.

Commissioner Frank Davis agreed that the council should explore options to alleviate water fund struggles from residents. Davis pointed out that the current town budget has $80,000 in the general fund that has not been allocated to any project yet, and given the news that money can be shifted between town fund, suggested it be transferred over to water fund, which would equal half of the expected revenue the recent rate increase will bring in, implying that the Council may reconsider the rate increases.

Council President Tim O’Donnell said he was against transferring money between the two funds, insisting that the water fund be self sufficient and backing the recent round of rate increases.

Pollitt said she will continue water rate discussion at the Town’s August meeting to ensure transparency for the public as to where all water fund monies are going.