WSSC Water presented its proposed fiscal year 2026 operating and capital budget to the Prince George’s County Transportation, Infrastructure, Energy and Environment Committee on April 10, 2025, outlining a proposed revenue enhancement of 9.8 percent and a combined operating and capital program of about $1.8 billion.

The proposal would increase volumetric water and sewer rates and fixed charges, raise the system development charge by 2.5 percent, and fund expanded affordability programs. “The commission has proposed a budget with a 9.8% revenue enhancement,” WSSC Chief Financial Officer Masar said during the briefing.

The nut of the budget is a larger operating program while the capital budget declines after project re-baselining. WSSC staff told the committee the combined operating-and-capital total is about $1.8 billion, roughly $21.7 million (1.2%) above FY25 when operating and capital are combined. On the capital side, staff described an 11.9% decrease driven by re‑baselining projects and removing historic completion-factor padding.

Why it matters: WSSC said the 9.8% proposal is intended to protect its bond rating and lower long‑term debt costs by sharply increasing PAYGO (pay‑as‑you‑go) funding for capital projects. The utility would raise PAYGO to about $93 million for FY26—an increase of roughly $42.4 million, or about 84% over the FY25 approved level—so more capital work is paid from operations rather than new borrowing.

Details and committee discussion

- Rates and customer impact: WSSC staff presented an example household impact. Using a three‑person household consuming an average of 48.3 gallons per person per day, staff estimated an increase of $26.41 per quarter (about $8.80 per month, or $105.64 per year). WSSC said affordability programs would be funded at $8.9 million in the proposed budget, an increase of $1.1 million from the prior year.

- Capital and project highlights: Staff said the FY26 capital program totals roughly $696.8 million, with bi‑county projects accounting for the largest share. New or newly carried projects include lead reduction, PFAS strategy work, master planning and smart meter infrastructure; some costs shifted between operating and capital accounts after the re‑estimate.

- PAYGO and debt strategy: WSSC told the committee the PAYGO increase is intended to improve debt metrics the rating agencies evaluate and reduce future debt service costs. Staff said the commission chose to use more operating funds instead of issuing new debt in order to maintain rating strength.

- Workforce and operations: The FY26 proposal adds 77 full‑time equivalent positions, including conversions of contract positions and regulatory‑related hires. Staff said roughly 29 of the new slots are budget‑neutral conversions of contract labor to employees and that regulatory‑related positions will be filled immediately.

- Project delays and contract performance: Nadia Oslom, Pipeline Construction Division Manager, said many construction schedules have been extended by non‑compensable delays (for example weather or other schedule impacts), and that compensation is limited to instances involving scope changes or additional work. WSSC interim General Counsel and Chief of Staff Nina Hixson added the utility has evaluated contracting, scope development and contractor enforcement and has made leadership and process changes to improve project delivery. “We have taken a step back to evaluate to determine how to make those improvements,” Hixson said.

- Blue Plains and interagency charges: WSSC staff told the committee that charges from DC Water/Blue Plains are a continuing source of uncertainty. Staff said WSSC set an $85 million FY26 budget for Blue Plains operations and maintenance but that DC Water’s approved budget came in higher — creating an additional $1.5 million pressure for WSSC. Staff also said a $6.5 million settlement invoice from FY24 must be absorbed in FY26.

- Ratings and funding context: Committee members asked about credit‑rating discussions and the mix of bonds, PAYGO and loans. WSSC said rating agencies flagged a risk if the utility under‑invests in capital; the utility presented a long‑term plan it said balances PAYGO, MDE loan proceeds and debt.

Committee instructions and next steps

County staff recommended that the committee adopt a 9% revenue enhancement consistent with the county’s spending‑affordability guidance; staff estimated cutting the rate from 9.8% to 9% would require about $7.6 million in operating reductions, which would reduce PAYGO and affect the CIP. WSSC staff said public hearings on the WSSC budget are scheduled, with the committee set to continue review as the regional affordability process proceeds.

Ending: The committee accepted the briefing and held follow‑up scheduling: WSSC will appear at upcoming public hearings and the council will schedule further work sessions on technical questions and the high‑bill issue.