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April 02, 2010

County water authority will not raise rates next year

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By Sean Tubbs
Charlottesville Tomorrow
Friday, April 2, 2010

Rates paid by county residents for urban water and sewer service will not increase under the Albemarle County Service Authority’s proposed $35 million budget for the next fiscal year.

The ACSA’s Board of Directors voted Thursday to advertise the same rates as the current fiscal year. However, the board also decided to advertise slightly higher fees charged to developers to connect new homes and businesses to the system.

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The ACSA must advertise its proposed rates 60 days before the public hearing at which rates are to be adopted. Under state law, rates can be decreased from that which is advertised, but not increased. If the board decides to increase rates, the public process must start over with a new advertisement.

 


All ACSA residential customers pay a monthly service charge based on size of their connection, and are billed according to a tiered pricing structure. Customers pay $3.32 per 1,000 gallons for the first 3,000 gallons used. That increases to $6.64 per 1,000 gallons for the next 3,000, and $9.96 per 1,000 gallons after that. Consumption over 9,000 gallons a month is charged at $13.28 per 1,000 gallons. The current sewer rate is $7.21 per 1,000 gallons.

”The decision to maintain existing rates reflects the Rivanna Water and Sewer Authority’s proposed budget, which calls for slightly lower wholesale rates charged to the ACSA for water and wastewater treatment.Service authority board member John Martin said it is important to send a message to ratepayers during the ongoing recession.

Download Download Lisa Breeden's budget presentation to the ACSA Board

“I’m inclined to think we should lower the rate by a penny to pass along [the RWSA’s] reduction of the wholesale rate,” Martin said.

ACSA Finance Director Lisa Breeden said she did not anticipate the RWSA would continue a trend toward lower rates next year.

“They have a lot of [capital improvement] projects that are going to take off,” Breeden said. “I would imagine their rate increases next year are going to be significantly different.”

The ACSA charges two separate fees to developers to recoup the cost of the existing system. These fees will increase.

First, the ACSA collects a development fee of $1,640 for each water connection and $1,995 for a sewer connection. The budget proposes raising these fees by 8 percent to $1,772 and $2,155 respectively.

The second fee is a charge for the developer to “buy-in” to the assets owned by the RWSA. The water capacity charge is proposed to be raised from $3,725 to $3,822 and the sewer capacity charge is recommended to be increased from $2,680 to $2,756.

These fees were dramatically increased in the current year’s budget. The system development fee increased by 58 percent and the RWSA capacity charge increased by 30 percent. Some local developers said the increase was too significant in the current economic downturn.

The proposed budget anticipates that 205 connections will be made next year. That amount takes into consideration developers who have paid their fees even though the ACSA is not currently serving them. Developers are allowed to pay the fee as soon as they are issued a building permit by county government.

Martin is opposed to the practice, and pointed out that the authority lost $600,000 in revenue by deferring the bulk of last year’s rate increase from Sept. 1 to March 1.

Last year’s budget assumed that 170 connections would be made, but only 153 were actually paid for by developers. Money will be drawn from the ACSA’s reserve fund to make up the difference, according to Breeden.

The ACSA board will continue discussing the budget over the next two months, with the next work session scheduled for April 15. A public hearing on the rates will be held in mid-May.

The RWSA will hold a public hearing on its rates and budget on May 25.

For the city of Charlottesville’s public works department, the RWSA is proposing a 3.38 percent increase in the amount it charges for sewer and a 0.93 percent decrease for water.

The public works department provides water and sewer service for city customers.

The city will release its rates for customers in early May after a rate study is completed, according to utilities director Lauren Hildebrand. She said she did not yet know if the RWSA’s proposed wholesale rates would translate into a change either way in water or sewer rates for city residents.

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