Water rates unchanged in county administrator’s proposed budget

By: Michael Campbell | Twitter: @itsthesoup
Posted: March 21, 2019 | 12:30 p.m.

First time in three years county water, sewer customers won’t see increase

PRINCE GEORGE – Over the last few fiscal years, customers of the county’s water and sewer system have seen their rates increase as the utilities department tried to bring revenues closer in line with rising expenses, particularly in upkeep and upgrade costs, but, in this year’s proposed budget, customers will be receiving a break from those increases. 

As part of County Administrator Percy Ashcraft’s proposed budget, which he presented to the community late last month, no increases to either water or sewer rates for customers of the county water and wastewater system were proposed, a first since 2017.

The news of no increases for the utilities’ nearly 4,500 customers this coming fiscal year is welcome after the county spent the last two fiscal years working to realign rates with increasing costs.

In 2017, supervisors approved a ten percent increase in water rates and a 20 percent increase in wastewater fees as they continued to try to get revenues in line with operating expenses and capital expenditures. That increase saw customer bills of those who used an average of 5,000 gallons per month rise by roughly $11 per month while generating over $730,000 in revenue for the department.

At that time, officials with the department said even with the increase, the department would still be short $200,000 annually, forcing them to use cash reserves to make ends meet. According to data provided by the county during the Prince George Board of Supervisors’ at that time, even with the ten and 20-percent rate increases to water and sewer rates last year, “over $900,000 in use of cash reserves was planned for FY2018 to meet capital needs,” a practice they have been trying to reduce in recent years.

Last year, county leaders approved a five-percent increase in water rates and a seven-and-a-half percent increase in wastewater rates for the upcoming year in an effort to “continue to realign utility revenues to cover annual operating and capital expenses that [were] started in FY 2018,” helping generate just over $370,000 in revenue for the self-supported department.

When broken down, County Administrator Ashcraft and officials with the county’s utilities department said the average customer who uses 5,000 gallons per month would see their bill rise by $1.24 for water charges and $3.97 for sewer charges, creating a total monthly increase of $5.21. Given that the county bills on a bi-monthly basis, the average customer described in Ashcraft’s example would see their bi-monthly bill rise by just over $10.40, based on a consumption of 5,000 gallons per month during the billing cycle.

According to a report from GettingGreatRates.com’s Carl Brown, who was tasked with looking at the county’s rates at the time, the rationale for the recent increases center around debt service for system improvements and that the county’s “outside water provider and sewer treatment providers also have significant improvement needs, the cost of which” the county “will be required to shoulder a proportionate share of.”

As a number of projects continue to be undertaken and completed over the coming weeks and months, Ashcraft said it was an appropriate time to forgo a rate increase on county customers while stressing the decision to raise rates isn’t done on a whim.

“We don’t raise fees just to raise them,” he said. “The last couple of years was an effort to try and keep up with the inflationary rates of utilities, just like other utilities do like electric, cable, etc.”

Ashcraft continued, “The master study we did recommend that we get to a point that our rates allow us to not take away from the utility fund balance and that it is largely paying for itself every year.  So, we felt like this was a good year of relief.”

According to Ashcraft’s proposed budget, the utilities department is expected to use $99,904 in cash reserves in the upcoming fiscal year, a far cry from the over $900,000 in cash reserves expected to be used during the course of FY2018 to help meet capital needs at the time of the 2017 rate increase.

Another thing Ashcraft and the county’s public utilities are watching is a request from Virginia American Water for a rate increase to its customers, some of which are in Prince George County. According to county documents, if approved by the State Corporation Commission, county customers of VAW will have see their water rates rise by 10.5 percent, which will be used to fund a number of capital repair and replacement projects at the Hopewell plant and “provide VAW an increase in profit [ranging] from approximately nine to 10.8 percent.”

In addition to the water service rate increase, VAW has also proposed a “water infrastructure replacement service charge,” which would be an additional 7.5 percent charge added to a customer’s monthly bill.

According to the county’s conversations with VAW, the average Prince George customer, of which there are just 750, who uses 5,000 gallons of water per month would see an increase “of approximately $7.15 per month on their water bill,” with $4 of that being the increased water rates and $3.15 being the water infrastructure replacement service charge. 

Frank Haltom, the county’s utilities director did note VAW customers would see a “slight reduction in their bills” during the following two years as VAW customers across the state would see increases while they continue to move to a uniform rate, with an estimated savings of $2.77 per month expected during year two and three.

The county is actively working to make their concerns heard regarding the VAW’s filing with the SCC but, Ashcraft said they are keeping a close eye on it and what it could mean for VAW customers in the county.

“We are waiting to see what happens with that,” he remarked. “Any increase they get, the county has to absorb it so if it gets passed on next year, we wanted to make sure we knew exactly what we were passing on and not just picking an arbitrary number.”

After two years of rate realignments and a significant reduction in the use of capital reserves, Ashcraft said the department is in a great place. 

“The utility department is advancing and we are rehabilitating things that were needed and maybe weren’t addressed over the last few years,” he remarked. We also have those two big projects as well,” referring to infrastructure projects along Route 156 and U.S. Route 460 near the Food Lion Distribution Center, “so I am very happy with the leadership we have there with Frank Haltom and what our plans are for utilities.”

He added that the county’s long-term utilities and infrastructure picture continue to be driven by the conversations being had by county supervisors, like T.J. Webb, who has been a vocal proponent of addressing the county’s infrastructural needs and getting elements in place now that can help chart the county’s future.

“Mr. Webb has been a strong advocate and the other board members have supported the efforts to go forward with getting a permit to where we could build a water and wastewater plant and make us more independent and rely less on the regional water authority or neighboring jurisdictions, like Hopewell and Petersburg,” Ashcraft said. “That is a long process and we have been in quality discussions with the state to begin that permitting process.”

According to published reports, Chesterfield County is also looking at building their own water treatment plant along the Appomattox River along with several pump stations in an effort to bolster their water supply in the face of continued expansion. 

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