Customers of Leesburg’s water and sewer system can expect some higher bills by later this year.
The Town Council voted Tuesday night on several Town Code amendments and an updated fee schedule that will see rates rise by an average of 4.5 percent per year for the next five years, beginning with the next fiscal year that starts July 1.
For the average residential customer who uses 14,000 gallons per quarter, that translates to a $40 annual increase in fiscal year 2020. By the fifth year of the plan, in fiscal year 2024, those same customers can expect to spend on average $54.42 more per quarter.
Over several meetings, the council had heard repeatedly from both the consultant overseeing the rate study, as well as town staff, that the town continues to make up for keeping utility rates artificially low for years. Beginning in the early 2000s, Leesburg found itself in legal hot water with the 100 percent surcharge it imposed on its out-of-town customers. The Loudoun Circuit Court ruled in 2009 the rates were unreasonable, but that decision was later overturned by the state Supreme Court. Since then, five-year rate studies and the resulting rate increases have become commonplace to pay for capital expenses for the utility system—an asset valued at more than $400 million—as well as increased operating expenses as both the town’s customer base, and thus the need for more employee manpower, grows.
The increased revenue from the new rates will also allow the town to move to a 40-year replacement cycle, which equates to about $10 million in capital expenditures per year. Proposed staffing additions to support the increase in the town’s population, meeting service levels, and avoiding staff burnout total new 18 positions between fiscal years 2020 and 2024.
As an enterprise fund, the Utilities Fund is self-supporting and does not impact town taxes, so revenue generated from water and sewer fees must be sufficient to cover the cost of maintaining the systems and debt service obligations as well as Utilities Department personnel.
The 4.5 percent per year increase is less than the over 7 percent per year increase for past five years. Councilman Ron Campbell suggested that the council set as its goal that the next needed increase be even less than the one put into place this week.
“Every five years I think we can set forth an expectation that [any increase] is going to be lower than 4.5 percent, if we’re being responsible and reinvesting back in the system,” he said.
“It’s somewhat painful but do need to point out the original increase [in the past five years] was 7.8 percent. We have brought that down,” Mayor Kelly Burk said. “Water service is probably one of the most important things we provide. It really is important we maintain it the way it needs to be maintained.”
Council members Suzanne Fox and Tom Dunn voted against the new fee schedule, but did support the other Town Code changes. Councilman Josh Thiel was absent for Tuesday’s meeting.
The council deferred discussion to a later work session on several sections of the Town Code related to changes to its fats, oil and grease program.