Purcellville Council Rejects Proposal to Sell Utility System; to Review Concept

Following an hour-long closed session discussion Tuesday night, the Purcellville Town Council opted to forgo selling the town’s water and sewer system—for now.

The Town Council voted 6-0-1, with Vice Mayor Mary Jane Williams absent, to direct staff to reject Aqua Virginia’s unsolicited proposal to purchase the town’s water and sewer systems. According to the motion, the town staff will continue to “conduct further due diligence on the merits of the concept.” Mayor Kwasi Fraser later clarified that the town is not outright rejecting Aqua’s proposal, but essentially putting it on hold until the town staff is better able to review it.

“We are not rejecting by saying ‘no’ definitively. We are rejecting because right now we do not have the internal expertise … to vet the merits of the proposal,” he said. “We are obligated to our taxpayers to look at all proposals that may benefit the economic vitality of Purcellville. That is the key.”

Aqua Virginia is a subsidiary of Aqua America—a publicly traded water and wastewater utility that serves more than 3 million people nationwide. It serves 75,000 people through 24,160 water connections and 6,903 wastewater connections across 36 counties in the commonwealth, according to its website.

Fraser said the company’s unsolicited proposal only recently made its way onto Town Manager David Mekarski’s desk.

The idea to privatize the town’s utility systems could help to return the town’s water and sewer funds to fiscal stability, since, Fraser said, companies like Aqua claim they can reduce management costs. If a company like Aqua did purchase the town’s utility systems, the locality would not have a voice when it comes to rate increases. The company would be regulated by the State Corporation Commission.

In Fiscal Year 2020, the town’s water fund shrunk by 39 percent and its sewer fund shrunk by 16 percent. Stantec, the town’s utility rate consultant, advised the town it would need to increase utility rates in Fiscal Year 2021. The Town Council last month voted to approve an FY21 budget accounting solely for the first quarter that excluded any rate increases.

The town could generate more revenue from its Basham Simms Wastewater Facility, which operates at only about 40 percent of the daily capacity it can handle.

Fraser said Mekarski would provide the town with more information and a timeline on the town staff’s review of the concept to sell the utility systems at the second Town Council meeting in August.

Fraser said the town needs to take two factors into account when reviewing proposals like Aqua’s—ensuring that the company that takes over doesn’t significantly increase rates, similar to how the Dulles Greenway is proposing to increase tolls by 30 percent over a five-year period; and ensuring utility staffers’ retirement funds aren’t adversely affected, since, he said, many utility management companies that take over municipal operations retain existing town staffers but offer them 401(k)s rather than pensions.

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One thought on “Purcellville Council Rejects Proposal to Sell Utility System; to Review Concept

  • 2020-07-16 at 11:04 am

    Do your due diligence and think about it, and then reject it. Don’t allow P-ville to get “Greenwayed.”

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