Purcellville Town Manager Robert Lohr has proposed a $20 million fiscal year 2017 budget that would require a 2-cent increase in the town’s real estate tax rate. Rates for water and sewer service also would increase under the proposal.
Lohr presented his budget recommendations March 15 and the Town Council will begin its review March 29.
The $20 million operating expenses break down to $10.8 million for the General Fund; $4.5 million for the Wastewater Fund; $4.4 million for the Water Fund; and $541,000 for the Parks and Recreation Fund.
In his presentation, Lohr proposed increasing the real estate tax rate from 22 cents per $100 of assessed value to 24 cents. The council last year raised the tax rate 1 cent, following about six years in which the tax rate held steady at 21 cents.
Other tax rates would remain unchanged—3.5 percent for the Parks and Recreation Special Tax District Fund; $1.05 percent for personal property, 5 cents for meals tax, and 65 cents per pack for the cigarette tax.
Lohr proposed staffing enhancements for every department, including 3.6 full-time equivalent positions in the General Fund for police, public works, maintenance and town administration. Lohr also proposed the purchase of two new police cruisers, electronic speed signs and a site feasibility study for a new police headquarters.
Lohr has proposed a 3 percent merit pay increase for town employees, as well as additional funds for pay-for-performance bonuses.
Lohr is recommending a water rate increase of 3 percent and a 5 percent increase in sewer rates to keep pace with operational expenses and debt service payments.
The town’s total debt is $60 million, with more than $40 million tied to the utility system.
A developer payment of up to $13 million to be received as part of an agreement related to the Mayfair subdivision will help offset some of the debt and rebuild reserves, but the town is faced with a difficult problem.
Typically, the town has gained revenues through availability fees and user fees. But, Purcellville is almost built out and the council is divided on whether to annex land proposed for development outside the town’s border.
“If we can’t sell capacity and continue to grow, and continue to face unfunded state mandates, towns smaller than Leesburg may not be able to support their own utility systems,” Lohr said following the meeting.
Complicating the situation is that nationally, as well as in Purcellville, there has been a move toward water conservation, leading to lower consumption. The town, meanwhile, is faced with a need to rebuild its 30-year-old water tank and to make water line improvements.
“Every time we renew our wastewater permit, there are stringent mandates,” and the opportunities to sell capacity and availability are shrinking,” Lohr said.
Town residents could be looking at significant rate increases of between 30 percent and 50 percent in the future, Lohr said.
The Basham Simms Wastewater Plant, for which previous town leaders were criticized heavily for building larger than needed, was recommended to be expanded to a 1.5 million gallon per day capacity under state-mandated standards, Lohr said. Currently, the plant is treating about 600,000 gallons per day.