Last month, the Purcellville Town Council voted to re-up its Police Department lease at an undersized space with security concerns. It again postponed advancing construction of a permanent police headquarters first recommended years ago. And it rejected the request of the town manager and financial advisor to open a low-interest line of credit to get utility projects moving.
It was the latest in a years-long pattern of the town’s elected leadership discounting—or distrusting—the advice of its professional staff and hired consultants in favor of charting their own course.
From July 2019 to September 2020, the Town of Purcellville spent more than $160,000 for consultants to study and make recommendations on matters ranging from ways to achieve structural balance within the town utility funds to how to meet the needs of the Police Department. Prior to the start of FY 2020, the town spent $70,000 to pay another consultant to review and recommend improvements to the town’s governmental structure, and $392,000 to pay a law firm to investigate the investigation into since-discredited allegations of mismanagement against the police chief, which resulted in a series of recommendations to improve that agency’s operations.
By not heeding the advice of those paid professionals, the town could be stuck paying more than its leaders originally bargained for—given inflation, rising interest rates the pressing need to bolster utility funds, and moreover, the price the town paid its consultants for their suggestions in the first place.
Council Yet to Decide on New Utility Rates
From FY 2019 to FY 2020, the town’s water and sewer funds shrunk by 39% and 16%, respectively. The town also faces an obligation to pay off about $30 million in sewer debt and finance $13 million in utility fund projects before FY 2030, according to an October 2019 Water Capital Improvement Program Risk Analysis.
In December 2018, The Novak Consulting Group recommended 48 actions the town take to improve its government functions, following a five-month organizational assessment for which the town paid $69,800. One of those recommendations was for the town to perform a utility rate study and simplify its rate structure.
Less than a year later, Stantec, the town’s utility rate consultant, advised the town that it would need to raise water and sewer rates—with sharp or moderate hikes this year and annual increases of between 4% and 9.25% through the decade—to alleviate its utility-related financial burdens.
The council didn’t act on those recommendations.
Without formal direction, Town Manager David Mekarski initially proposed modest 5% rate hikes, but ultimately dropped them from the final FY 2021 budget in an effort to help customers through the pandemic.
“It was very difficult to put together a budget not having the definitive direction from the council on the rates,” Mekarski said during his March 18 budget presentation. Mekarski, and two teams of consultants, had previously recommended the council abandon the town’s 17-tier water rate structure and adopt a four-tier utility rate structure, which, Mekarski said, would have made the budget process easier.
The council later that night, after Mekarski had presented his proposed budget, voted to adopt the simplified rate structure.
At the March 10 Town Council meeting, Mayor Kwasi Fraser asked who should be blamed for the council’s failure to provide the town staff with a decision on a utility rate structure.
“Did we miss something?” he asked. “… No one reminded me of the need to place it on the agenda, management nor council members.”
Councilman Tip Stinnette said he had been trying to get a discussion of the utility rate structure placed on the Town Council meeting agenda for a few meetings by that point.
Councilman Joel Grewe said he didn’t feel the blame should be placed on individual council members, but that “it’s a recurrent fault this council has.”
“We try to go faster than we are capable of running, regularly,” he said.
The Town Council’s most recent in-depth discussion on ways to regain structural balance within the town’s utility funds was during a Sept. 28 meeting with Stantec. The only council members present for that discussion were Vice Mayor Mary Jane Williams and Councilmen Christopher Bertaut and Stanley Milan—all newly elected members who started their terms in July with no previous experience in town government.
Stantec Principal David Hyder informed the three council members that if the council does not raise water rates, the water fund balance will drop below target levels beginning in FY 2025 and will begin operating at a deficit by FY 2027. If the council does not raise sewer rates, the sewer fund balance will drop below target levels beginning in FY 2023 and will begin operating at a deficit by FY 2026.
“The clock is ticking to some degree,” Hyder said during the Sept. 28 meeting. “There’s some significant challenges that the town is facing.”
Council members continue to voice support for a strategy Mayor Kwasi Fraser has championed since taking office six years ago: That the town can create new revenue streams from its utility properties to offset the need for rate hikes.
So far, none of those initiatives have demonstrated a significant impact on town finances. Fraser has not responded to emails or calls responding to questions about Town Council priorities.
During the Oct. 21 Town Council meeting, Stinnette said the council and staff should push ahead projects to generate revenue for the town, such as applying for more grants, bringing in a firm to sell nutrient credits or install a solar field on the Aberdeen property, finding a firm to construct a new cell tower so the town can lease spots to cellular carriers, selling reclaimed water, and pursuing options to bring online a new, large utility user to provide the town with added revenue in the forms of one-time utility tap fees and ongoing water and sewer payments.
Those projects have been discussed frequently over the past few years.
But Bob Lazaro, who served as mayor from 2006 to 2014 and as a Town Council member from 2004 to 2006, said the utility operations are “just a function of math” and that the Town Council has been “stealing out of the piggy bank” by draining reserves.
Lazaro said that from his point of view, the Town Council has stalled on many professional recommendations because some members are willing to make hard, unpopular decisions.
“If you want to be a popular person, don’t run for local office because you have to make decisions that are not just for the present, but for the long run,” he said.
In all of FY 2020 and the first four months of FY 2021, the town has paid Stantec $74,521 for its consulting services, according to the town’s monthly check registers.
Council Delays Decision on Police Headquarters Relocation
The need to build a new Police Department headquarters has been cited as a priority for at least the last five years, at which point the town originally intended for officers to move out of its existing space and into a more permanent headquarters.
On July 30, 2018, the law firm of Wilson Elser Moskowitz Edelman & Dicker, along with retired police chief Timothy Longo, Sr., released a 25-page report of their months-long investigation into a prior investigation prompted by now-discredited allegations of mismanagement against Police Chief Cynthia McAlister. That report outlined 13 recommendations to “enhance the professionalism and effectiveness of the [Police] Department as a whole,” which included a recommendation for the department to relocate to a more secure and functional headquarters.
“The current facility is within a commercial strip mall which lacks the necessary prerequisites for a safe, secure, and functional police facility,” the report reads. “We recommend a location that is more central to the Town, provides high visibility to community and visitors, allows for the safety and well-being of critical staff, has the infrastructure to secure equipment, resources, property, and evidence, and has the secure technology infrastructure commensurate with best practices.”
McAlister has said the 4,300-square-foot office police have leased in the Lowers Risk Group building off Hirst Road is cramped and not as secure as it should be.
Over the past two years, the Town Council has discussed location, timeline and financing options to build a new headquarters, as well as location options for different temporary headquarters locations.
But on Oct. 27, the council voted unanimously to authorize the town staff to negotiate a new, five-year lease with Lowers. The town staff will spend up to $1.5 million to both execute the lease and perform security-related improvements there. Less than a week before that vote, the council resolved to table talks of a permanent headquarters until Davenport & Co., the town’s financial advisor, returns with debt restructuring options on Dec. 8.
According to estimates by Moseley Architects, the town could be stuck paying $4.5 million more if it waits until 2030 to build a new police headquarters.
McAlister said she was disappointed in the Town Council’s vote to negotiate another five-year lease in the existing space, although she said she knows that council members understand the department’s need to move into a new headquarters.
McAlister said she was told during her hiring interview more than five years ago that one of the first projects she would help facilitate was the construction of a new headquarters.
“Unfortunately, I saw that kind of dwindle,” she said of the project. “It seemed to me that a new facility for law enforcement was a top priority.”
She said she is hoping her department will move into a new building in five years and that in the meantime, she’ll continue to work with Moseley on safety improvements to the Lowers space.
“I really hope that I can depend on the council to have a firm commitment that we will be progressing to a new building,” she said. “Our budget is small, but we will … get the most space out of this building.”
Councilman Ted Greenly said the police headquarters project is the biggest project town leaders are working through and that he’s worried that project could get pushed more than five years out.
“We seem to agree that its needed but we’re not really in agreement as to when,” he said.
In all of FY 2020 and the first four months of FY 2021, the town paid Davenport $78,189 and Moseley $7,367 for their services, according to the town’s monthly check registers.
Council Rejects Money-Borrowing Recommendation
The council voted unanimously on Oct. 21 against authorizing the town staff to take out a $3 million line of credit with a 1.81-percent interest rate to help finance 16 water projects totaling $15.5 million. Mekarski for weeks had been pressing the council to authorize his team to borrow that money, given the market’s historically low interest rates and the town’s potential future need to pull money from its utility fund reserve accounts.
Stinnette said the council voted against taking out the line of credit because it would be unwise to borrow money during a pandemic. He said it would be smarter for the town to get into the bond market once the world pulls through the crisis a bit more.
According to Mekarski’s Oct. 21 staff report, the top four critical water supply and distribution and water main replacement projects total $6.3 million and need attention before June 2024.
Without borrowing money to help pay for the projects, the town could be forced to pull $8.5 million from the $12.4 million that rests across the water and sewer fund cash reserve accounts, leaving only $3.9 million in those reserves.
The Novak Recommendations: Where They Stand
Although the Town Council has yet to take action on a majority of those recommendations, Stinnette pointed out that town leaders have already reviewed about half of Novak’s recommendations to some degree of detail and that the town staff continues to do so. Eventually, the town staff will bring proposed actions to the Town Council for votes—perhaps at a slower pace than what residents might want to see.
Stinnette attributed that delay to the limitations the towns staff is facing amid a pandemic and the various projects now on the table, like the nutrient credit ides on the Aberdeen property. The election of three new council members in June also has set the council back a few months as it works to bring those three up to speed, Stinnette said.
Still, Stinnette said town leaders need to make some “conscious, prioritization decisions” and that those decisions should be discussed in greater detail during the FY 2022 budget talks.
“You can’t stop doing the business of the town to do the Novak report or the police report—it’s going to take a period of time,” he said.
Greenly also said the Town Council and staff has talked through many of the recommendations. He noted that they’re still moving forward, but the Town Council has not done a good enough job in informing taxpayers how much money it will cost the town to implement them.
“I think everybody is in agreement,” he said about the drive among council members to implement the recommendations. “It’s going to come down to dollars and cents.”
The Wilson Elser Recommendations: Where They Stand
McAlister said her department has accomplished nine of the Wilson Elser law firm’s 13 recommendations, or is in the process of doing so.
Some have even been set into motion by an October 2018 Town Council vote to approve the spending of $235,300. That money was set aside to hire a deputy chief and accreditation manager, pay consultants from the Virginia Association of the Chiefs of Police to review the department’s General Orders Manual and implement policy changes, purchase a subscription to Lexipol to update the Department’s policy manual, purchase heavy-duty lockers for officers and purchase ammunition.
The town also has also hired a police operations commander, implemented a recurring 12-month training program for officers, audited the headquarters building and continues to perform frequent audits of critical tasks.