The Town of Leesburg hired a rate consultant, PRMG (Public Resources Management Group, Inc.) in the spring of 2018 to study the financial needs to meet the operational, maintenance and Capital Improvement Projects of the utility system over the next five years. Their findings and recommendations are for a 4.5% increase over the next five years.
Below you will find supporting documentation and presentations.
State of Town's Water and Sanitary Sewer System (September 10, 2018)
Funding the System (November 26, 2018)
Below are some of the most frequently asked questions regarding the rate study and proposed rate increase. If you have additional questions or need more information, please call 703-771-2750 or email firstname.lastname@example.org.
The Town of Leesburg periodically reviews the utility rates to assess suitability with operations. As operational expenses and required capital improvements increase, the costs cannot be covered without corresponding utility rate increases.
This year the process began in May 2018 with the Town Council authorizing staff to hire a firm that specializes in water and sewer rate studies to assist staff in the process of conducting a comprehensive rate study.
The study was a coordinated effort between the Town's Department of Utilities and Financial Services in providing financial, operations and capital improvement project information to PRMG.
In July 2018, PRMG presented preliminary results of the comprehensive utility study to Town Council.
In September 2018, State of the Utility was presented to Town Council.
In November 2018, PRMG presented their recommendation and final utility study report. You can find that report here: PRMG Rate Study
On November 27, 2018, Council approved initiation of Town Code amendments and directed staff to advertise for a Public Hearing to advise all customers of the Town's intent to increase rates. The Public Hearing is scheduled for January 22, 2019. The proposed rate increases, if adopted, would go into effect on July 1, 2019.
The Town's rate consultant, PRMG, has recommended a 4.5% increase for water and sewer rates for the next five years.
A simple way to calculate the 4.5% increase for your household would be to multiply your current water and sewer bill by 4.5%.
For example, if your current quarterly bill is $145.00 multiplied by .045 (4.5%) = $6.53, which is the increase to your quarterly bill. Your 2020 quarterly water and sewer bill will be $151.53.
Yes, currently the Town has an ongoing Capital Improvement Plan. Many utility assets are now reaching the end of its useful life. The Town is preparing a strategy for reinvesting in utility system reliability. Capital Improvement and 3R (Repair, Replacement & Rehabilitation) projects are a major part of that strategy to better serve our customers.
Water and sewer related revenues and expenditures are accounted for separately from other tax-supported funds. The utility fund is considered an enterprise fund, and the goal is that the revenues support related expenses without help from the other tax-related funds. In other words, your utility system is self-supporting through revenues related to providing utility services.
Customer Service staff is available to assist you from 8:30 a.m. to 5:00 p.m. Monday through Friday. Call 703-771-2750 or email email@example.com.
- Water and sewer treatment and delivery is the most capital-intensive of all utility services. Annual increases in water and sewer rates typically are greater than inflation or the Consumer Price Index (CPI) across the United States. Over the past decade, according to the Labor Department, increases have averaged 5.5% a year, more than the rate of overall inflation due to higher rates of construction related inflation needed to maintain and expand critical infrastructure and for chemicals used in the water and wastewater treatment processes.
There are two primary components that drive the proposed rate increase. Operations/maintenance and capital improvements.
Operations and maintenance activities of the town's utility are continually reviewed and modified to gain efficiencies wherever possible in an effort to avoid much higher rate increases. These cost control efforts include: automating certain operational tasks, replacement of equipment with energy efficient units, re-evaluating staffing needs as existing staff retire, etc.
Capital Improvements- Infrastructure, technology, and major equipment are the physical foundation for providing services. Capital facilities and infrastructure are important legacies that serve current and future generations. The procurement, design, construction, maintenance, and operation of capital assets are critical activity of governments and therefore require careful planning. Capital improvement planning is a dynamic process, and infrastructure needs change over time based on regulatory requirements, burdens placed on the system, and ever changing environmental conditions. The Town of Leesburg updates its 5-Year Capital Plan annually. The 5-Year Capital Plan serves as a means to evaluate the infrastructure's physical condition, pinpoint existing and anticipated needs, determine upkeep/modernization costs, and identify funding sources.
In order to maintain the Town’s high quality service, delivery, and responsiveness of water and sewer, the Town is proposing a 4.5% rate increase to address a funding gap. New development from houses and businesses alone is not projected to fill the funding gap. By Fiscal Year 2024, even with taking into account revenue from new development there is still a $5.7 million funding gap. The proposed annual 4.5% rate increase will address the funding gap.
For 10 years from 1995 to 2005, there were no rate increases. We should follow the rate consultant's recommendation in order to maintain operations and complete capital improvement projects. A smaller rate increase would require eliminating much needed capital improvement projects from the 5-Year plan. These capital improvement expenditures are estimated at $110 million over the next ten years. More information on the capital improvement projects can be found in the Funding the System presentation to Town Council dated November 26, 2018.