By Alex Bridges
Front Royal received some good news that should help the town pay for a $40 million upgrade of its sewage plant.
But Town Manager Steve Burke hesitated to say definitively on Tuesday that customers would see their sewer bills drop. Similar news came to light in Strasburg recently and now officials there plan to lower the sewer rates as a result of the town receiving more grant money for its sewer plant project than expected.
The Virginia Department of Environmental Quality recently informed Front Royal officials that it qualified for a grant of almost $11.9 million from the Clean Water Quality Improvement Fund. The money would help cover wastewater treatment plant upgrade costs.
The town also qualified for a loan of up to $50 million at zero percent interest for 20 years that would cover the bulk of the project cost. The town will work with the Virginia Resources Authority to go into debt for the project. Additional grant funds mean the town needs to borrow less money for the project, resulting in lower debt payments that influence the sewer rates.
Town officials plan to present this information to council at its May 5 work session. Council likely will discuss this matter fiscal 2015 budget talks.
Burke said that several years ago, when Front Royal contracted with a consulting firm to study the utility rates, local officials anticipated the DEQ would award an $8 million grant. The rate study recommended the town increase the sewer rate by 30 percent. In the current budget, council agreed to spread the increase out over time and approved raising the rate in the current period by 10 percent.
Whether the higher grant amount would allow council to reduce the rate remains uncertain. Town officials will evaluate the impact of the larger grant amount on the project cost and the proposed rate increases for sewer service, Burke said. Staff members also need to add into the equation the Dominion power generation facility and the Rappahannock-Shenandoah-Warren Regional Jail -- both big users of sewer and water service and set to go online in the near future. Their use of the treatment plant is seen as a way to help keep costs low for the town.
"We hope that when all this is factored in we can realize a reduction in the rates," Burke said.
Mayor Timothy Darr mentioned the grant award at Town Council's meeting Monday, noting that the amount would benefit Front Royal as a savings to taxpayers. He added that while the town could borrow up to $50 million the project would not cost that much.
When asked whether the town faces a deadline to spend the grant money, Burke told council that the project has a construction window of three years.
The town needs to upgrade the facility to comply with restrictions in the Chesapeake Bay Act pertaining to wastewater treatment and nutrients released into the Shenandoah River. Specifically, the town must upgrade its facility to treat more phosphorous and nitrogen -- nutrients said to impair waterways. The upgrade also calls for the plant to increase its capacity to treat wastewater from the current 4 million gallons per day to 5.3 million gallons per day.
The increased capacity should suffice for 25 years, Burke said. The expansion's design takes into account any increase in plant use by future developments such as homes built in the 605-acre property the town may annex from Warren County.
Town staff members are in the process of reviewing the design for the upgrade. Burke said the town could advertise the project for construction bids this summer. Construction could then begin this fall. The project should take 2½ years to complete, Burke said.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org