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Posted March 14, 2012 | comments 7 Comments

Utility rate study OK'd

By Kim Walter -- kwalter@nvdaily.com

FRONT ROYAL -- Town Council has received and approved a proposal from Burton & Associates to conduct an updated $29,400 study that would analyze in- and out-of-town utility rates.

The state requires that the town update the study in order to justify the rates, and to be aware of current utility consumption. The last study was done two years ago for the fiscal year 2010-2011 budget.

Town Manager Steve Burke explained that the last study was only done on users and connections in town, and looked only at associated revenue instead of expenses.
"This study will allow us to revisit the current data and find any new connections and users, or learn of connections that are no longer in use," Burke said in defense of the study.
Councilman Thomas Conkey said the study is necessary "to ensure the rates we're charging our citizens, both in town and in the corridor, are appropriate."

Councilman Thomas Sayre was the only one to vote against the study. He said, "I'm not completely sold on spending the $29,400 on this. We don't have to spend the money."
Councilman N. Shae Parker reiterated that it was required by law to justify rates.

"Sure, you could not spend the money and then take care of the legal fees when you can't explain why you're charging the rates that you are," Parker said. "It's a necessity."

In a letter to Burke, Burton & Associates said work can begin on the study "upon receipt of a notice to proceed," and the study is estimated to be completed within 90 days after receiving all required data.

7 Comments | Leave a comment

    $33,000 for new computer software to 'alert' the town of grant possibilities and now $29,400 for this. That's $62,400 for nothing really tangible, when you have departments within the town structure that offer vital services, in dire need of bringing their personnel up to standard so they will no longer continue to lose them to other agencies in the area. It seems that the town council would want to take care of those who take care of them, before delving into areas that sound at best, as something that can be put off. I am perplexed...to say the least.

    The question should be: Why can't the town do the survey "in house". They have the previous one as an example and given a cost of $29400, it probably doesn't involve the proverbial rocket science.

    It seems that the solution to every problem is hire more staff or pay a contractor.

    Water and sewer are provided on a pay-for-service basis. The town is not authorized to make money on this service. We charge our customers what it actually costs us to provide the service. If we charge too much for the service, the citizens are hurt because they are paying more than they should for it. If we charge too little for the service, the citizens are hurt because they have to make up the difference through other taxes.

    I think we are undercharging the out-of-town customers for their water and sewer. They think we are overcharging them. Leesburg's out-of-town customers thought they were being overcharged and took Leesburg to court. Leesburg didn't have any basis for their out-of-town rates and they lost the suit along with millions of dollars.

    We need to make sure that our out-of-town customers are being charged the right amount for their water and sewer. Could we do the rate study in house? Yeah, maybe. Could we get it right? Maybe. Would a recognized consultant's conclusions carry a LOT more weight in court? Yes, absolutely!

    Is it worth $29,000 to protect $$ Millions? I think so.

    Simple solution: Quit having out-of-town customers using in town services!!!

    lets see, the town is not authorized to make money on the services but they charge out of town users an even double the town rate (not 45% more or 65% more, etc.) apparently without benefit of any true cost analysis. The out of town rate sounds like an arbitrary charge designed to gouge out of town users instead of a fair rate. Could be potential for a law suit right there. Also, if a private contractor study has so much more credibility than a town government study, maybe it is time to contract out the whole shooting match. Save a lot of money and eliminate the petty squabbling and good ole boy back scratching. At least, the town should sell the water and sewer system to Warren County so that a rational planning and development process could begin.

    No offense, but the motive to almost all of the town's LACK of motivation seems to be fear of a lawsuit....they are so afraid of one, that they end up causing them.

    I have an idea that this mentality isn't ever going to change. They will eternally search for the golden answer that will prevent lawsuits, when in reality its part of life for a municipality...what Geoff and Tom said clearly make the point.

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