The Town’s consultant, Municipal & Financial Services Group, will appear before Council in January, to respond to Council’s questions on ways to lower utility rates.
At an October 17 Town Council meeting to review and discuss options, Purcellville Town Manager Rob Lohr talked about availability fees from more growth as a way to defray the rising cost of Town utility rates.
Council Member Nedim Ogelman reacted to Lohr’s statement, saying that using more tap fees or building more residential units to get out of the infrastructure trap does not make sense. Services and their costs become more complex as the community grows, said Ogelman.
Ogelman challenged the notion that growing the Town would drop utility rates, and the Town’s consultant agreed. Said Ogelman, “I am also hearing that you have to keep on adding more lines, and that to me feels like a contradiction. If you just keep on getting more people to move in, then there is not some magic line that says the unit costs will go down. So, this whole idea that if we have more tap fees or we build more units, that we are going to get ourselves out of this infrastructure trap – that doesn’t make sense to me.”
Eric Callochia with The Municipal & Financial Services Group, the Town’s consultant on utility rates then said, “You are absolutely correct.”
Continued Ogelman, “And something that is being said quite a bit, ‘Well if we just develop a bit more … that is something that will drop the rates …’ this is not that economy of scale situation where the unit cost will go down.”
Council Member Ryan Cool said, “I am hearing the whole argument which is what I have been hearing for years: That we can just keep building our way out of debt, which is complete nonsense. What level have you hit capacity where you have to completely build again?” Cool continued, “You have to look at things holistically; you just don’t build a hundred homes, and your day is solved. You just brought on $30 million debt, and you have a bigger problem than you had when you started.”
“I have been in the Town for 10 years,” said Mayor Kwasi Fraser, “and I feel like I am that frog in the water – and you keep increasing the heat. But now it’s getting to a boiling point, and our citizens are asking us, ‘When are you going to give us relief?’ He said, “If we keep telling the citizens that OK, we’ll keep on increasing the rate slowly, slowly, and one time you are going to boil.” Fraser said that the Town needs to start looking at alternate ways to “put revenue into the utility fund.”
Council Member Karen Jimmerson noted that incomes have not gone up for the last decade, and they are just starting to inch up. “If our utility rates grow faster than people’s incomes – we’ve got a disparity, because that is going to hurt people being able to shop at the stores, and do other things that cause us to get tax revenue.”
Mayfair will bring in $12 million over the five years of buildout, pointed out Council Member Kelli Grim. “Obviously, rates have to pay for what we already have. Plus, we are putting money in reserves for maintenance, repairs, etc. So, when Mayfair comes online at $12 million – we have $5 or $6 million of improvements to make…. The question is, What does it cost to put in new capacity?” Lohr then assured Council that the Town has the capacity for Mayfair.
The consultant said, “One of the things you have to keep an eye on, people seize on any reason they can to complain about this, and I do, too. But your water bill and your sewer bill, as a percentage of household income or household expenses, is miniscule. We don’t do a good job of educating people. Look at what a gallon of water costs at the store, or the price to have your septic pumped. How do you measure affordability?”
Cool said that residents want to “see a little out-of-the-box thinking.” He said that the Town has to come up with new and innovative options. “What are other people doing?’’ he asked. “How can we think outside the box?”
Mayor Fraser said he was thinking of using a portion of the meals tax to pay down the utility debt. “At the end of the day, once we start lowering this debt that we have, we can then pass some of that to consumers by lower rates.” The consultant responded, “You can do that if you want – the only challenge with that is that the meals tax is less reliable – less predictable – and you will have more fluctuations in your cash flow, which could affect credit ratings.”
However, our research shows the meals tax revenue has consistently increased by approximately 18 percent for the last six years. The Town has exceeded its meals tax revenue projection by $180,000 annually for the last two years.
“The goal is to simplify rates, define what is fair,” said Cool. He suggested looking into monthly billing, paying online, and reading the meters remotely. “There is a $10,000 software to do this, versus driving all over Town doing it, and buying a $50,000 vehicle.”
Grim concluded saying, “I want to see many options, not [just] the option that says the rate will go up three and six percent every year, no matter what you do.”
One Active Annexation ?Request for the Town
The Town of Purcellville has one active annexation request. The 131.29-acre Warner Brook property, which is in the County and is zoned JLMA 3 (Joint Land Management Area – one house per three acres), is located at 17100 Purcellville Road (Rt. 611), north of the Rt. 7 Bypass, east of Purcellville Road, and west of Carmichael Place.
The annexation request calls for the following:
Commercial on 11 acres – 70,000 sq.ft.
Residential on 65 acres – 160 units
Light Industrial on 24 acres – 313,000 sq.ft.
Indoor and Outdoor Recreation on 31 acres – 130,000 sq.ft. (with the Outdoor Recreation changing to MC – Mixed Use Commercial when the market demands).
This proposal would add an average of 7,665 daily trips. The property owners had a design charrette November 21, 2014, and invited County Supervisors, County planning commissioners, County development staff, Purcellville Council Members, Town planning staff, adjoining property owners, community youth league leaders, and development professionals. The charrette was facilitated by Bowman Consulting and DBI Architects.
There are other property owners interested in annexation with the expectation of high density development being proposed.