Town Finances: A Hot Issue in Purcellville Election

It’s budget preparation time in Purcellville.

Department heads are working to turn their fiscal year 2017 budget requests and current financial information in to Budget Specialist Debbie Capitan. The Town Council has scheduled a pre-budget meeting today, Jan. 19, to get the discussions going early. A public hearing on the personal property tax and real estate tax rates is slated for March 8. A series of budget work sessions will be held later in March and April.

Town Manager Robert W. Lohr Jr. will present his budget to the council March 15, at which time the town’s financial advisor, the Davenport Group, and its utility rate consultant, MFSG Davenport Group and MFSG, will present the town’s long-term financial plan and projections.

It’s also an election year, and finances are likely to figure prominently in the campaign.

Mayor Kwasi Fraser, who was elected in May 2014, announced he will run for a second two-year term. Vice Mayor John Nave, Councilwoman Joan Lehr and Councilman Patrick McConville, whose terms expire June 30, have not yet announced their decision as to whether they will run again.

Wastewater Plant Debt

A key election issue for Fraser in 2014 was the town’s outstanding debt, and it is a topic that he has continued to stress over the past year and a half.

A look at the town’s financial situation shows that two-thirds of its $60 million debt relates to the town’s investment in water and sewer service, particularly upgrades needed to comply with state-mandated treatment standards and the expansion of the Basham Simms Wastewater Plant. That plant was built in 2002, with a treatment capacity of 550 gallons per day.

By 2004, “we couldn’t meet the state’s nutrient reductions required through the Chesapeake Bay Act,” Lohr said in a recent interview.

For a time, the town’s sewer treatment plant operated under a consent order from the Department of Environmental Quality, because it had too much outside water infiltration. The plant also was too small and many town water mains needed replacement.

In the fall of 2005, when the late Bill Druhan Jr. was mayor, the Town Council voted to upgrade the sewer plant’s treatment to meet the new nutrient reduction standards and to increase capacity to 1.5 million gallons per day. The $30 million project was funded through a loan from the Virginia Resources Authority and a $5 million grant from the state.

The size of the plant was an election issue in 2014, with critics maintaining the treatment capacity was far too large and decrying high utility rates. But Lohr said engineers must design the treatment system for peak, not average, use. He recalled that at the time of “Snowmagedon” in February 2005 when the community was hit with back-to-back major snowstorms, “we were treating more than 1.5 million [gallons per day]. Currently, the town has state-issued permits for a treatment demand of one million gallons per day. The town’s population is 8,600.

Water Debt

On the water side, the town had insufficient supplies, often requiring stringent water-use restrictions during droughts. But efforts by previous councils to acquire new water sources addressed the shortage.

“We were always short of water,” Lohr Jr. recalled. But, adding new wells and expanding others rectified that situation. There have been no water restrictions since 2008.

“The town has solved its utility problem,” said Lohr, who cited water as a scarce commodity. “People will scramble to find it in the future, but they won’t find it.”

He noted that if the Hirst Well, that went down last summer and is still offline, had been put out of service in 2004 the town would have had significant problems. “We’d be on mandatory restrictions,” Lohr said. The exact cause of the well’s failure is still unknown, but Lohr noted Director of Public Services Alex Vanegas was scheduled to present options for reactivating the well to the Town Council Tuesday night. The well produces 8 percent of the town’s water supply—some 40,000 gpd. The town also gets between 300,000 and 400,000 gallons a day from the Hirst Reservoir.

Debt Repayment

Paying off the debt has been a key objective for the mayor and some on council, but, under the terms of many of the town’s bonds, prepayment possibilities are limited and may involve penalties. The debt repayment is budgeted each year. More than 50 percent of the General Fund debt should be paid off over the next five years, according to Lohr.

Purcellville achieved a notable feat in October 2013 for a town of its size, earning triple-A ratings from the three national credit rating agencies. No new debt has been issued since then, and 2021 is the earliest any refinancing could be done, Lohr said. A key milestone comes in early FY21 when balloon notes of $1.4 million for water and $1.6 million for parks and recreation, respectively, come due.

“We could either pay them off then or refinance—that will be council’s decision,” Lohr said.

The $12-$13 million that is to be paid to the town in availabilities and meter fees over five years through the legal settlement with the county concerning development of Autumn Hill—now known as Mayfair—could be used to pay the balloon note, or it could be spread out and used in some other manner. The first of five annual staggered installments was received last March, with the second due next month.

The town ended FY15 in a strong financial position, with more than $4 million in its reserve fund. It also benefitted from a rate reduction on the loan used to finance the Basham Simms expansion, that lowered the interest rate from 2.77 percent to 2.52 percent.


Taxes routinely are good fodder for election debates. The 2014 campaign featured criticism of the town’s “runaway taxes.”

The town had held its real estate tax rate fairly consistent since 2010, according to Director of Finance Elizabeth Krens. The tax rate was 23 cents per $100 of assessed value in 2010 and 2011, raised to 22.5 cents per $100 in 2012 and 2013, then lowered to 21 cents in 2014 before rising a penny last year.

But one tax concern that was raised during the last election, and has remained unpopular in certain quarters, was the 3.5 cent Parks and Recreation tax that applies mostly to support of Fireman’s Field and the Purcellville Train Station.

Some council members also oppose the town’s meals tax, which, at 5 percent, is the highest among Loudoun towns, but others note there is no lack of diners in the town’s restaurants, diners and cafés. They defend the tax not only as a good revenue source, but as a way of spreading the cost of town services with those who use town facilities and roads but live outside town limits.

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