Baltimore County is paying $3 million out of pocket to Baltimore City to resolve a long-running tiff over unpaid water bills — a fraction of the $22 million Baltimore’s Department of Public Works billed the county in 2018 to recover years of undercharged water service.

Per the resolution letter, dated July 8, the county will also pay the city $2.1 million to reimburse the public works department for water delivery unpaid by county ratepayers in the last two financial years.

The settlement totaled $9 million, which the city said made up the shortfall of undercharges from budget years 2014 and 2018. But much of it was relinquished by the city, which owed the county for other expenses.

About $3.9 million was shaved off Baltimore’s payment to reimburse the county for money it provided during the COVID pandemic to counter staff shortages in the city’s public works department and to cover “settlement payments” Baltimore owed the county for water service in the budget years that ended in 2019 and 2022.

Settlement payments are billed at the end of each year; the city either pays back the county if suburban ratepayers have overpaid, or sends a bill if they paid too little.

Baltimore County, which shares a drinking water and sewer system operated by the city’s public works department, owed the city millions for water service between 2014 and 2018 due to undercharged county residents and business owners.

Baltimore County disputed the accuracy of the bill and refused to cough up the money. Officials under the late former Baltimore County Executive Kevin Kamenetz’s administration said they doubted the amount billed, given the city’s well-known struggles with inaccurate water billing.

Baltimore billed the county roughly $4.8 million in the budget year that ended in June 2014 to recover water costs from undercharged customers.

In 2015, the city levied a $15.5 million water bill, then billed the county another $2.4 million the following year, according to a city consultant report from 2018. That money went unpaid, according to the report.

In the resolution letter, Jason Mitchell, director of the Baltimore City Department of Public Works, thanked Baltimore County Executive Johnny Olszewski Jr.’s administration for its “commitment to reach a reasonable resolution” on the money owed for water delivery between 2014 and 2018.

Baltimore Mayor Brandon Scott “and I are committed to retaining and strengthening the strong relationship that exists between Baltimore City and Baltimore County,” Mitchell wrote.

“The city and the county have been working really well together to solve many of the outstanding issues” that began under prior government administrations, Mitchell said in an interview.

The resolution over the water billing “is just one of many,” he said.

The Office of the County Administrator did not return a request for comment Monday afternoon.

County officials previously said they had struggled to verify whether county residents, who pay different rates than city customers, have been billed accurately for water; the county is now reviewing how it charges water and sewer fees.

The resolution was reached weeks before an undisclosed internal report by a third-party consultant hired by Baltimore County found numerous inconsistencies in the county’s utility billing system that pose high risks of inequitable costs to residents and businesses, especially condominium owners. Some of those condo owners are challenging the county’s sewer billing methodology in front of the Baltimore County Board of Appeals, saying they’ve been overcharged by millions of dollars over the years.

County officials said the report, obtained by The Banner, only identified “potential” inequities. The Baltimore County Council is considering a $111,500 contract for Raftelis Financial Consultants to conduct a cost-of-service analysis of the county utility billing system at its Tuesday work session.

taylor.deville@thebaltimorebanner.com