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Posted September 4, 2012 | comments 11 Comments

Front Royal eyes rate increase

But new power plant could spare big hike in 2016

By Alex Bridges -- abridges@nvdaily.com

FRONT ROYAL -- Dominion's power plant should spare Front Royal utility users from a major rate increase in 2016, according to a report issued Tuesday.

Front Royal Town Council at a work session saw a presentation by Burton & Associates of an updated water and wastewater utility rate study that addressed the levies needed to cover the costs of providing the services. As Michael Burton, president of the firm, explained to the council, the town has seen its billable usage in both water and sewer drop by 25 percent each over four years from fiscal year 2008 to 2012.

"We're just seeing demands drop all over the country so that's something you and everybody else is experiencing," Burton said.

Economic conditions contributed to the reduced demands, according to Burton. Current rates remain insufficient to meet current cost requirements, Burton told council. Councilman Thomas H. Sayre noted some of the decrease in demand likely came in part from people using devices designed to save water.

Annual rate revenue adjustments, according to the study, recommend the town raise the water rate by 8.5 percent each year for fiscal years 2014 and 2015. Dominion's power generations plant under construction in Warren County is expected to go online in 2016 and would connect to the town's water and sewer systems thus increasing the demand on the services.

By comparison, without Dominion, the town would need to raise water rates in fiscal 2016 by 35 percent. Councilman Eugene Tewalt expressed concern about raising the rate so sharply in one year and suggested the town would want to even out the increase over the three years.

Town Manager Steven Burke noted that Dominion coming online is closer to certainty.

Front Royal also must increase its sewer rates by 14 percent each year for fiscal years 2014 and 2015. Without Dominion the rates would need to increase by 30 percent. However, even with the power plant connecting with the town, Front Royal still must increase the sewer rates by 14 percent in fiscal 2016. No increases are envisioned after Dominion goes online.

Expenses include line upgrades, capital inventory and vehicles and equipment. Key costs also include annual rate increases, health insurance, fuel and chemicals. Burton explained the utilities should keep three months worth of revenue in reserve, totally approximately $600,000. The town needs to make adjustments to the rates or else face drawing down this reserve amount below what Burton called acceptable.

Burton & Associates performed a study on the town's water and sewer rates in 2010. Council choice not to implement parts of that study at the time because of the upcoming Wastewater Treatment Plant project and work performed on the water treatment facility. The firm, which offers multi-year financial management plans for municipalities, proceeded with updating the previous study.

11 Comments | Leave a comment

    Does this make any sense?
    Lower usage so we HAVE to RAISE the rates.
    When this situation happens with gas usage, usually prices go DOWN, NOT UP.
    If there's less usage, should operating cost go down because less fuel and chemicals are needed?

    An 8.5 % increase in water rates for each of two consecutive years? A 14% increase in sewer rates for two consecutive years? Raising taxes, fees and rates are what the Front Royal town council is known for. Governments just don't get it. An individual has to live within their means. If costs go up we have to reduce or do without something. The American tax burden between local, state and federal is too great, now. In order for the town to hire, train and retain employees taxes have to go up. An increase in one fee, then another along with the creation of new fees load taxpayers like a pack mule. Enough is enough. Make income suffice for expenditures. We're being robbed.

    Caveman, let's think about this from a different direction. Front Royal has gone for over ten last 10 years until recently without rate increases. In the late 90's the Town invested in the infrastructure to provide water and sewer services to the 522 corridor. The citizens of the Town has paid for the infrastructure and has been absorbing the cost of the services to the area. It's been remarkable that the Town has gone as long as it has without increases. The loss of the revenue from the 522 corridor and the new sewer plant having to be built is forcing these increases just to break even with less usage. The only way out of this situation is to shift some of the cost burden the new construction and rate increases by the user in the county .

    Where do you get your 'facts'? I've lived in Front Royal since 1991. I've seen electric rates, water, sewer, trash pick-up, personal and real property taxes increase in the past 10 years. Where were you when that happened?
    Trash pick-up rates were increased when Michael Graham was town manager. The increase was explained as necessary because the Warren County Board of Supervisors increased the tipping fee. The county likes to think they have the town over a barrel because we have nowhere else to go. The county board of supervisors has a greater effect on what happens in the town than the town council does. Without revenue sharing, which the county is dead set against, the imbalance of power will continue.

    Yes I agree with you on the trash increase was based on the tipping charges that the county forced upon the Town to pay. Based on the papers reports that FR has the lowest electric rates in the State of Virginia which is great when you compare it to what people are paying in the county. I did not get to FR until 98 and I did not have a real estate or personal property tax increase until last year that I can remember at my age. That's about 11years without a real estate increase in the Town. I don't remember my water or sewer bill going during that time either. I think if you check other Towns in the area, you will find that the Town's rates are much lower. I do not mind that either. I do remember several increases from the county in Re and PP taxes. You are right about your last comment and it will continue until the Mayor and Town Council starts to stand up for the citizens that live in the Town.

    The article the NVD wrote above seems to be just a blurr to me about the money and everything. I used to work at the wastewater plant for Front royal, and worked the rotating shift, 3 strait weekends, get off third shift on friday morning at 7 a.m.....and said goodbye too...enjoy your one weekend off, while you recover from third shift and come back onto first shift the following week.

    These higher ups have no clue, what these operators go through on a nightly/daily basis, especially when there is high torentia lrain volumes or when snowstorms hit. They are busting there balls for what?

    The few higher up operators that are left are great. A few of the more esperienced operators have left through the years. Lots of lower operators have left because of the sorry pay. Mr Fristoe runs a good plant, but one man can only do so much with the infiltration problem in the past.

    I learned alot at that plant, but thank God I don't work there anymore! Whenever there is a huge Snowstorm or thunderstorm, think that .....

    ....I think, wow someone is buttig there b@tt Keeping ahead of flow. I've heard about sewer/water increase, and didn't see too manypay raises while I was there. I know operators at much smaller municipalitys doing better with there wages, and with better hours.

    ....and here is one last thing off my chest. Do not advertise for a Horticultural Specialist (or whaetever you call that position) for a higher rate then a Wastwater Superintendent. One has been hired the other hasn't been. Probably because of the higher rate of pay, and way less responsibility. Most area municipality's just have a few landscapers on the payroll that the do the respectable jobs.

    The last mayor that fought for the employee was Jim Eastham's administration that passed a 5% salary increase each year for 3 years plus any cost of living. Front Royal was noted for underpaying its employees and Jim wanted to bring the Town up to being competitive as compared to other Towns. Former Councilman Conkey was the last person to make the effort to come up with a different solution to give the employees a increase since the recession. This was defeated last June.

    5% per year would have been nice..:).

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