While Purcellville businesses could soon pay more equitable fees for the water they use, it’s looking like residents should expect to pay more for water, after years of stagnant rates.
Town Manager David Mekarski presented his proposed $18.6 million Fiscal Year 2022 operating budget to the Town Council during a virtual meeting Wednesday night. That proposed budget features a stabilized real estate tax and Fireman’s Field Tax District rate, along with a 3% increase in water rates and a 5% hike in sewer rates. Those proposed utility rate increases come after years of urging from town consultants and advisors who have cited a need for the town to shore up its shrinking utility funds.
Mekarski said the proposed rate hikes are consistent with recommendations made by Stantec, the town’s utility rate consultant, and Davenport & Co., the town’s financial advisor.
They also go hand-in-hand with a move away from the town’s traditional 17-tier rate system by switching to a four-tier system designed to reduce water fees for commercial businesses that use large amounts of water.
The water fund, which Mekarski has proposed to be 11% down from FY 2021, features a $270,000 drop in availability fee revenue. The sewer fund, which he has proposed at 12% less than FY 2021, features a $227,000 drop in availability fee revenue.
Mekarski cautioned the Town Council to keep an eye on those shrinking revenues in the years to come, as fewer developments are built and hooked up to the town’s utility system.
In the General Fund, Mekarski proposed to keep the real estate tax rate steady at 22 cents per $100 of assessed value. He noted that because residential property assessments grew by 5.7% over last year, the average residential tax bill should go up by about $55. He also pointed out that commercial assessments are down by 5.9%.
Mekarski also proposed to maintain 85 full-time equivalent positions within the town staff, and to increase operating expenditures by 3% to provide staffers with salary increases.
Councilman Stanley Milan said the town should be “a little sensitive with that” because “a lot of our citizens have lost jobs.”
“We have to show that the merit for increasing the staff’s or management’s salary when the citizens are not feeling the benefit of their salaries increasing,” he said.
Mekarski pointed out that half of the town staff continues to work from home while the other half are deemed frontline workers. Mekarski thanked all staff members for their work to keep the town operational through the pandemic.
“I want to say thank you, thank you from the bottom of my heart for your dedication, your commitment to place the delivery of services to our citizens first even above the needs and challenges of your own families,” he said.
Mekarski’s proposed budget also comes with a proposed $3.8 million Capital Improvement Program. Mekarski noted that although the CIP is up by 134% over FY 2021 across all funds, the expenditures are largely offset by state, county and private-sector funds totaling $1.2 million from VDOT, the Northern Virginia Transportation Authority, Loudoun County CIP grants and developer proffers.
Within the proposed CIP is $2.3 million set aside for improvements to the Hirst Reservoir and costs associated with the cast iron water main replacement. Both improvements will be financed through a 40-year, low interest USDA loan.
Mekarski said his team plans to close out the FY 2021 budget on June 30 with revenue exceeding expenditures, as the town has done every year.
That FY 2021 budget was adopted by the Town Council in two separate installments. In June 2020, the council adopted a $4.8 million operating budget accounting solely for the first quarter of FY 2021 to alleviate the need to hold too many public meetings during the state of emergency amid the pandemic and because there was not enough data at the time to accurately predict the pandemic’s economic impact on the town, according to the town staff. In September, the council adopted a $14.7 million operating budget for quarters 2-4.
More than a year since the outset of the COVID-19 pandemic, Mayor Kwasi Fraser said he felt the town is recovering well.
The Town Council will next discuss Mekarski’s proposed FY 2022 budget March 24. On April 13, a public hearing will be held and the council will tentatively adopt property tax rates. The council is expected to adopt the full budget by June 16.