LEONARDTOWN, Md. — The Commissioners of St. Marys County on January 13, 2026, approved two loan applications from the St. Marys County Metropolitan Commission to the Maryland Department of Housing and Community Development totaling more than $37 million, funding a range of capital improvement projects including wastewater infrastructure required under a state consent decree.
The approvals followed presentations from Metropolitan Commission staff and extended discussion among commissioners, resulting in split votes on both requests. The larger application, for a principal amount not to exceed $35,993,393 over 30 years, covers various capital improvement budget projects, programs and equipment. The smaller application seeks up to $1,215,000 over 10 years for vehicle and equipment purchases. Both loans include costs of issuance and administrative fees.
Metropolitan Commission representatives explained that the projects listed in the applications were previously approved by both the Metropolitan Commission and the county commissioners and incorporated into prior debt calculations. Officials stated the loans will have no impact on current rates and charges for water and sewer customers. Funds will be drawn down as projects require them, not all at once, with the commission having drawn 63 percent of a prior 2024 loan of $11.7 million, leaving $4.4 million remaining as of December 2025.
Key projects in the 30-year application include the Piney Point force main replacement, Forest Run wastewater pump station, and Piney Point wastewater pump station upgrades. These are constrained by timelines in a Maryland Department of the Environment consent decree requiring completion by 2033. The Southampton revitalization project, a joint venture with the county Department of Public Works and Transportation, is also included.
Commission staff presented the applications as a preference over Maryland Department of the Environment loans due to greater funding flexibility, simpler processes, fewer restrictions and faster closings. A December 2025 meeting with DHCD representatives confirmed the bundling approach to secure favorable rates.
During discussion, Commissioner Mike Alderson Jr. expressed concerns about the size of the borrowing, particularly the timing of principal and interest payments on undrawn funds. He questioned why unrestricted reserves of approximately $29 million were not used for shorter-life assets like vehicles, noting the unrestricted balance appeared available after accounting for obligations. Alderson also raised the prospect of paying interest on money borrowed before projects are ready for construction, citing past examples where undrawn debt sat in accounts earning lower returns than the borrowing cost. He ultimately voted against both applications.
Other commissioners supported the requests. They noted the projects are already budgeted and expected, the draw schedule spreads costs, and the consent decree imposes firm deadlines on priority wastewater work. The board emphasized that deferring borrowing could delay critical infrastructure while the current loans remain largely obligated.
Metropolitan Commission officials clarified that reserves, while appearing substantial at $43.5 million in the 2025 audit (with an unmodified opinion), include restricted and committed funds for ongoing and upcoming projects such as the $6.7 million Piney Point force main portion not covered by a denied grant and $6.4 million for the St. Clements Shores wastewater treatment plant. They projected reserves could fall below policy targets by 2031 without growth, even after committing additional amounts through approved capital budgets.
The loans reflect the Metropolitan Commissions strategy to address aging infrastructure and meet regulatory requirements while maintaining rate stability for customers. The Piney Point and Forest Run projects represent significant portions of the request due to their mandated timelines.
The approvals occurred during a regularly scheduled commissioners meeting at the Chesapeake Building in Leonardtown. No meeting is scheduled for January 20 due to the Martin Luther King Jr. holiday. The next meeting is set for January 27 at 9 a.m.