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Four Years of Constant Water Rate Increases Too Much To Swallow!

July 5, 2012 by Blue Ridge Leader filed under Editorial, Opinion No Comments
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By Daniel E. Shaughnessy

Item (6e) of the proposed agenda for the Purcellville Town Council June 12 meeting, once again, as was the case for the June/July meetings of 2009, 2010, and 2011, proposes another increase in water and sewer rates for town residents and businesses.

These rate increases are of considerable concern and they seem to reflect the Council’s continuing embrace of a water system that is unable to pay for itself and which, increasingly, has become reliant on large annual rate increases and the use of reserve funds.

These annual rate increases have been substantial: On June 9, of 2009, the council approved a near-doubling of then existing rates for 2009- 2010. On July 13, 2010, the Council approved an additional 25 percent increase in rates for 2010/2011. Last year, on June 14, 2011, the Council again approved an approximate 11 percent increase in water rates and an approximate 15 percent increase in sewer rates. Now, for the fourth time in as many years, the Council is proposing a further increase in water and sewer rates for 2012-2013!

This time, the water rates are going up again and the sewer increase is 20 percent. These rates compound on themselves and become a significant expense for households and businesses.

Why these constant rate increases?

The answer appears to be that the council’s ambitious plans for sufficient revenue from new users and increased connection fees to pay the cost of the expanded water supply system, and to service the debt incurred in building it, have not materialized.

Page 220 of the town’s proposed 2012 – 2013 budget, which presents the “Revenue Profile” for the 2013 Water Fund, shows a need to transfer in $823,007 from cash reserves in order to operate the system, or in other words, to cover a projected 25 percent deficit in needed funds, even with accumulated rate increases and some major new users. In addition, page 126 of the proposed 2013 budget shows that another $1,205,382 is needed in the coming fiscal year to service the debt incurred in building the system.

Sewer system funding (The Wastewater Fund) is in a similar, if not more critical condition. Even with past and current rate increases, page 221 of the proposed 2013 Town budget shows that nearly 40 percent of the funds ($1,723,637) needed for the wastewater fund must come from cash reserves. Further, page 132 of the proposed budget shows that debt servicing for the Wastewater Fund in 2013 is projected at $2,421,569 for just 2013 alone.

Ms. Lehr and gentlemen, there is something wrong here. The water and sewer system is obviously not paying for itself and how long can the council continue to raise water and sewer rates on town citizens and businesses and deplete reserve funds without adverse consequences?

Purcellville water and sewer rates are already among the highest in Loudoun County. These proposed increases will almost certainly make our town’s rates the highest in the county. Loudoun Water, which supplies much of the county, has rates that are a fraction of those for Purcellville. Mr. McConville, then as a private citizen, expressed concern at the July 13, 2010 Council meeting, that a 25 percent increase then was too high, and that was even before that increase was enacted, before the 2011 increase, and now, before the current proposed increase!

Extremely high water rates are a major burden on existing town residents, and ultimately hinder real estate sales and business development. I strongly suggest that you reconsider these proposed rate increases and delay any further consideration for system expansion, as well as what appears to be a proposed $9 million debt increase for the water fund. Otherwise, these high water and sewer costs might make Purcellville not such a great place to live and raise a family.

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