Although it’s not yet set in stone, it appears that customers of the Leesburg’s water and sewer system should expect higher bills.
The Town Council is just months away from adopting a new schedule for its water and sewer rates that will take effect July 1. It’s customary for the council and town staff conduct a rate study every five years. Although town leaders are again eyeing rate increases, the hike is not expected to be as large of percentage as in 2014.
The Town Council received a briefing Monday night from its utility rate consultant, Public Resources Management Group Inc. PRMG President Robert Ori noted that although many of the projections for the town’s Utilities Fund in the 2014 study met or exceeded expectations, the town still has some catching up to do. Ori said between 1996 and 2006 there were no rate increases.
“By not adjusting the rates, we have to play some catch-ups to meet our expenditure requirements,” he said.
And those “catch-ups” include improvements and maintenance to the town’s utility infrastructure, an asset valued at $420 million, Utilities Director Amy Wyks noted, as well as the addition of personnel.
In terms of infrastructure, the town operates on a 100-year replacement cycle, which is well below industry standard, Wyks said. In the rate study, staff members and PRMG are proposing moving to a 40-year replacement cycle, which equates to about $10 million in capital per year. Proposed staffing additions to support the increase in the town’s population, meeting service levels, and avoiding staff burnout total 18 positions between fiscal years 2020 and 2024.
The proposed rate plan would allow the town to hire additional staff, Wyks said. As an enterprise fund, the Utilities Fund is self-supporting and does not impact town taxes.
On the rate plan, increases of 4.5 percent per year are eyed for the next five years, Ori said. That’s lower than the previous five-year period, where 7 percent increases on average occurred annually. The average in town residential user, using an average of 14,000 gallons per quarter, would see bills increase less than $10 quarterly or $40 annually in fiscal year 2020, Ori said. About a $10 increase per quarter for each year thereafter is anticipated, Ori said. The primary drivers of the rate increases are to pay for increased operating expenses and debt service obligations, he noted.
Council members Monday night shared their initial thoughts on the proposed rate plan and asked questions of the consultant and the town staff. Mayor Kelly Burk expressed her concerns about ensuring the town was able to wrap its arms around the impact of development in the Joint Land Management Area and its demands on the utility system. Council members recently voted to initiate a boundary line adjustment to bring about 517 acres of county land into the town to include a future Microsoft campus.
“If we’re not prepared for it, we’re going to be in bad shape,” she said.
The council only narrowly voted Tuesday night to initiate Town Code amendments for the new rates and set a public hearing date. Vice Mayor Suzanne Fox and council members Josh Thiel and Tom Dunn dissented on the 4-3 vote. A public hearing is anticipated for Jan. 22, when a vote could be taken to adopt the new rates.