After bragging three years ago about imposing the lowest increase in water and sewer rates since 1998, the Scott administration will raise rates by the highest margin in a decade.

Starting on February 1, 2025, sewer rates will jump 15% and water rates 3% (for an overall average of 10%) for the 200,000 residential and business customers in Baltimore City. (Utility rates for Baltimore County residents are calculated and administered differently.)

The February increase will be followed by 9% hikes for both fiscal 2026 (starting on July 1, 2025) and fiscal 2027.

The higher prices were not publicly announced until this evening by Khalil Zaied, director of the Department of Public Works.

Earlier in the day, the new rate schedule was disclosed in the Board of Estimates’ agenda for scheduled approval at its January 22 meeting.

Mayor Brandon Scott controls three of the board’s five seats, making the rate hike apparently inevitable.

But the meeting will also mark Zeke Cohen’s new role as City Council president, who will chair the spending board and could question the size and short notice of the increases.

30% Hike by 2026

According to DPW, the proposed rates would immediately hike the “typical” household bill (which combines water, sewage, stormwater and infrastructure charges) from $130 a month to $143 a month.

After June 2025, the typical bill will jump to $155 a month and then reach $168 a month on July 1, 2026 – a 30% hike from the current rate.

DPW attributes the increased charges to unexpected inflationary pressures.

The cost of chemicals used for water treatment has jumped by 22%, according to the agency, and a recent bid for rebuilding aged digesters at the Back River Wastewater Treatment Plant came in 14% above the engineering estimate.

Bond Downgrades

Equally worrisome, the rating for Baltimore’s sewer bonds has been downgraded and both water and sewer debt have been given “negative outlooks” by Moody’s Investors Service.

The bond downgrades have increased borrowing costs. Moody’s has admonished Baltimore City to stabilize its debt coverage ratios and increase revenues to stay within acceptable margins and maintain compliance with regulatory bodies.

DPW also remains under a federal consent decree to eliminate sewer overflows during heavy rain events.

Originally promised to be largely completed by 2022, the rehabilitation of the sewer system has been drawn out to 2030. DPW says it is implementing a $1.9 billion, six-year capital program to address critical infrastructure needs across the system.

Adding to the city’s headaches are recurrent equipment failures at the Back River and Patapsco treatment plants.

The Back River plant was temporarily taken over by state authorities in 2022 to stop illegal sewage discharges into Baltimore County’s Back River and the Chesapeake Bay.