Latest increase another step to remedy financial crisis in enterprise funds

By Brian Shane

Staff Writer

(April 2, 2026) Worcester County’s water and sewer accounts are still operating collectively in the red, despite proposed fee increases for the next fiscal year and a $1.1 million subsidy from the county.

Base fees would increase by 5% for 10 of the county’s 11 sanitary sewer enterprise funds, according to a fiscal year 2027 budget proposal from enterprise fund controller Quinn Dittrich. Rates for the West Ocean City district would not change.

“Last year was a big hit to a lot of people,” Dittrich told OC Today-Dispatch. “So, this year, while it is still an unsustainable increase, most of these areas that are still operating in a deficit. It’s steppingstone into the right direction of getting these funds to be where they need to be.”

Enterprise funds generate their own revenue from user rates and operate independently of the county’s general fund. This year’s enterprise budget, however, proposes $1,116,908 in subsidies from the county’s general fund for select districts that requested support, according to Dittrich. Those include The Landings, Riddle Farm, and River Run.

Other budgeted subsidies are tied to capital requests, like large purchase orders for chemicals. Whether those subsidies would be treated as a loan is up to the commissioners, Dittrich also said.

The average percentage increase for The Landings district is driven primarily by a 57.5% increase in the Lewis Road water fee, from $60 per quarter to $94.50.

Dittrich said the county is planning next to bid out a rate study, where a third-party adviser not only would evaluate their rate needs but offer suggestions on building capital reserves.

Overall, the FY27 enterprise fund budget calls for a 7% increase, or $1.3 million in projected revenue. Expenses are budgeted to increase by 3%, or $617,000.

“You’re outweighing your expenses, but you’re still operating at deficits. So, the expenses are still there. We kept it as lean as possible that while being efficient as possible,” Dittrich said.

The proposed water-sewer budget arrives in the shadow of a multimillion-dollar financial crisis that forced the county to fundamentally restructure its enterprise fund oversight and billing.

Two years ago, the county commissioners learned of a systemic financial crisis in its water-sewer enterprise funds, where 7 of 11 sewerage accounts were operating in a deep deficit, one that had ballooned for years.

The bad news came to light after a new budget officer was appointed and learned of the negligence: a former enterprise fund controller had been covering losses by taking cashflow from profitable areas to cover failing ones. Dittrich was hired as a replacement enterprise fund controller.

One major expense that added millions to the deficit involved the cost of trucking sludge from the out-of-commission Riddle Farm plant, where the filtration system had failed, to the Ocean Pines facility. That expense was never reflected in user rates.

To address the immediate shortfall, the county opted to stabilize the enterprise account by transferring $9.1 million from the general fund, most of which was structured as a loan to be repaid by ratepayers over ten years.

An unpopular pitch for a universal rate hike was scrapped in favor of making each district self-sustaining, but that led to dramatic rate hikes where many customers saw quarterly bills double or even triple last year. Instead, each service area saw a rate hike commensurate with its individual needs and usage.

Standards for household usage, known as equivalent dwelling units, or EDUs, also were lowered to 250 gallons per day for residential and commercial customers. That eliminated fixture-based billing for residents and removed discounted rate tiers for commercial customers.

Dittrich said, moving forward, another complaint to be addressed was giving customers adequate notice of changes being made. He said upcoming April bills for the county’s roughly 18,000 customers will include an insert with public meeting dates and a website address with more information.