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Inaccuracies in Mayor's flier on water and sewer rates
Before writing to your elected officials based on the Mayor's flier, please note the following she chose NOT to tell you:
1. The 30% increase is for sewer, not water, and over six years (not one year).
2. It was her decision, and a majority of Council in 2005, to raise out of town rates 100% AND expand the water/sewer treatment plant that put us in this mess.
3. That decision was struck down by the courts in April, and the judge ordered the town to institute a reduction for these customers by Sept. 1
4.. Water/sewer rates were NOT raised from 1992 to 2005, so the utility fund was nearly depleted. The mayor was on Council all that time, so she is partly to blame for keeping rates artificially low, which led to the massive increase voted in in late 2005.
5. Much of the $66 million borrowed to expand the water and sewer treatment plant -- and, build new offices for some of their personnel to the tune of $7.5 million – was NOT NEEDED. The expansion was intended to accommodate future growth that she and the Council OPPOSED.
6. Because of these decisions, in-town rates have risen since 2006 by an average 35% for sewer service and 21% for water.
7. The utilities department is an "enterprise fund." This means NO tax dollars support it. It is supposed to be sustained by water and sewer bills, plus "availability fees" (the charges businesses and developers pay to hook up to the system."
8. The department is running about a $1.3 million deficit each year, despite the increases the mayor and Council imposed in 2005.
In my business, if times are tough, I cut costs, and seek additional business. But the town manager has refused to do that, and many on council are siding with him.
We have cut five positions from the department since 2004, so we can cut more.
It is important for town residents to write Council supporting cost-cutting and finding NEW revenue BEFORE jacking up rates like this.
Unless you act, your water rates will increase by an average of 28% and sewer by 30% over the next six years.
You should NOT have to pay for past mistakes in the management of this utility department by weak politicians.
Please attend our Aug. 11 hearing at 7:30 p.m. at Town Hall (next to the Tally Ho) and write us at Council@leesburgva.gov
Urge cuts in expenses and finding new sources of revenue BEFORE raising rates.
Thank you
Ken Reid
Councilmanreid@FDAINFO.com |
How we got into this mess...
Source: Councilman Kevin Wright, who has studied this issue at great length.
Analysis: Some critical observations can be made about the past history of rate setting of the Utility Fund. The first is the significant gaps observed in completing rate studies and adjusting rates to account for inflation and changes in operating costs of the Utility Fund. The second critical observation is the departure from policy that occurred in 1994 & 1995 where the operational needs of the Utility Fund were instead funded from the availability fees collected. As reflected in the policy statement in 1986 and the stated policy of the Town to this day ; Availability fees ensure adequate recovery of all capital costs and debt service associated with the town's water and waste water facilities. During the high growth times availability fees did grow the overall fund balance of the Utility Fund, that stated intent for those fees was to cover future capital and debt service costs for plant expansions. However, since a portion of those availability fees were used to cover operating costs when it came time to expand the plant in 2005 the members of the Town Council at the time had two realities to handle the issuance of bonded debt to pay for plant expansions, and coming to terms with the failure to raise rates for the majority of the user base since 1992. This was compounded by the fact that the large balance of accrued availability fees would now be used for its planned purpose of funding capital costs and debt service associated with the town's water and waste water facilities. We will probably never know what situation our rates and utility fund would be in today if different decision were made in the past. However, we must be educated by our history and insure that we are more closely monitoring the Utility Fund and the fiscal management requirements of the fund going forward.
Some interesting numbers: I have calculated inflation (using the US government's CPI calculator) for rates adopted in the early years of the history and what those rates would be in today's dollars.
|
1978 In Town Rate |
1978 Rate |
CPI Rate in 2009 |
2009 Proposed Rate |
|
Water Fixed Charges |
1.50 |
4.96 |
7.20 |
|
Water Consumption Charges |
0.98 |
3.24 |
3.47 |
|
Sewer Fixed Charges |
1.50 |
4.96 |
7.20 |
|
Sewer Consumption Charges |
1.90 |
6.24 |
4.63 |
|
1992 In Town Rate
1995 Fixed Fee |
1992 Rate
1995 Fee |
CPI Rate in 2009 |
2009 Proposed Rate |
|
Water Fixed Charges |
4.00 |
5.66 |
7.20 |
|
Water Consumption Charges |
2.67 |
4.10 |
3.47 |
|
Sewer Fixed Charges |
4.00 |
5.66 |
7.20 |
|
Sewer Consumption Charges |
3.21 |
4.93 |
4.63 |
|
26,000 Gallon Bill
In Town User |
Original
Bill |
CPI Bill in 2009 |
2009 Proposed Rate
Bill |
|
1978 Rates |
77.88 |
257.64 |
225.00 |
|
1992 Rates |
157.38 |
241.95 |
225.00 |
|
1995 Rates |
160.88 |
227.69 |
225.00 |
Staff and Consultant proposals for water and sewer rate increases.
During the council work session on Monday July 27th Town Manager John Wells joined by other members of Town Staff and the consultants hired to complete the rate study presented their recommended changes in the Town's utility rates.
The town is reviewing and modifying rates in order to comply with a court order regarding the rates charged to out of town customers and to insure that the town is in compliance with the revenue requirements of the bonded debt incurred by the Utility Fund and insuring that the Utility Fund remains self sufficient. No taxpayer dollars are used to pay for operation of the Utility Fund, the fund operates solely from fees collected from water and sewer bills, as well as connection fees.
The proposed rates meet the revenue, bond, and legal requirements that required the latest rate study.
|
Water Fees |
Current
Rate |
Effective
9/1/09 |
Effective
7/1/10 |
Effective
7/1/11 |
Effective
7/1/12 |
Effective
7/1/13 |
Effective
7/1/14 |
|
Inside-Town |
|
Fixed Fee* |
$6.30 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
|
Consumption Fee |
$3.24 |
$3.47 |
$3.67 |
$3.86 |
$4.01 |
$4.13 |
$4.26 |
|
High Usage Rate |
$4.41 |
$5.03 |
$5.33 |
$5.59 |
$5.82 |
$5.99 |
$6.17 |
|
Reduced Rate for Qualifying Elderly |
$2.43 |
$2.60 |
$2.76 |
$2.89 |
$3.01 |
$3.10 |
$3.19 |
|
Outside-Town |
|
Fixed Fee* |
$6.30 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
|
Consumption Fee |
$6.49 |
$4.61 |
$4.89 |
$5.13 |
$5.34 |
$5.50 |
$5.66 |
|
High Usage Rate |
$8.83 |
$6.69 |
$7.09 |
$7.44 |
$7.74 |
$7.97 |
$8.21 |
|
Reduced Rate for Qualifying Elderly |
$6.49 |
$3.46 |
$3.67 |
$3.85 |
$4.01 |
$4.13 |
$4.25 |
|
|
|
|
|
|
|
|
|
|
Sewer Fees |
Current
Rate |
Effective
9/1/09 |
Effective
7/1/10 |
Effective
7/1/11 |
Effective
7/1/12 |
Effective
7/1/13 |
Effective
7/1/14 |
|
Inside-Town |
|
Fixed Fee* |
$6.30 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
|
Consumption Fee |
$4.33 |
$4.63 |
$4.91 |
$5.16 |
$5.41 |
$5.63 |
$5.80 |
|
Reduced Rate for Qualifying Elderly |
$3.25 |
$3.47 |
$3.68 |
$3.87 |
$4.06 |
$4.22 |
$4.35 |
|
Sewer Only – Fixed Fee |
$113.00 |
$90.60 |
$95.70 |
$100.22 |
$104.96 |
$108.96 |
$112.10 |
|
Outside-Town |
|
Fixed Fee* |
$6.30 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
$7.20 |
|
Consumption Fee |
$8.66 |
$7.09 |
$7.51 |
$7.89 |
$8.28 |
$8.62 |
$8.87 |
|
Reduced Rate for Qualifying Elderly |
$8.66 |
$5.32 |
$5.63 |
$5.92 |
$6.21 |
$6.47 |
$6.65 |
|
Sewer Only – Fixed Fee |
$225.00 |
$134.80 |
$142.56 |
$149.42 |
$156.62 |
$162.68 |
$167.44 |
*Fixed Fee reflected in this chart is for a 5/8 meter (81% of the system uses this meter size) see full rate document for full listing of fixed fee for other meter sizes.Download Proposed Rates
Average/Estimated Bills:
If you are like me the rate table doesn't mean a lot to you, the question is what is the impact on your bill. Below is a bill comparison for a residential customer using 26,000 gallons per quarter.
|
26,000 Quarterly Use Bill |
Current Rate |
New Rates Effective 9/1/09 |
|
Water Fixed Charges |
6.30 |
7.20 |
|
Sewer Fixed Charges |
6.30 |
7.20 |
|
|
|
|
|
Water Consumption Charges |
84.24 |
90.22 |
|
Sewer Consumption Charges |
112.58 |
120.38 |
|
Total Bill |
209.42 |
225.00 |
|
Increase |
|
$15.58 |
For users that have lower usage, more in line with an average bill of 15,000 gallons per quarter here is that bill comparison.
|
15,000 Quarterly Use Bill |
Current Rate |
New Rates Effective 9/1/09 |
|
Water Fixed Charges |
6.30 |
7.20 |
|
Sewer Fixed Charges |
6.30 |
7.20 |
|
|
|
|
|
Water Consumption Charges |
48.60 |
52.05 |
|
Sewer Consumption Charges |
64.95 |
69.45 |
|
Total Bill |
126.15 |
135.90 |
|
Increase |
|
$9.75 |
Town staff is developing a calculator so that users can plug in their bill and determine the difference.
Public Hearings on the proposed changes to Utility Rates are scheduled for Tuesday August 11th at 7:30 PM during the Town Council Meeting at the Town Council Chambers in Leesburg Town Hall located at 25 W Market Street in downtown Leesburg.
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