The town of Front Royal might not have to increase its water and sewer rates over the next five fiscal years, according to a study from the consulting firm Burton and Associates.
At Monday’s town council meeting, Burton Senior Vice President Andrew Burnham represented the data and their recommendations for the town’s rates through the fiscal year 2025.
Based on the company’s estimates, Burnham said, “We do not recommend any adjustments to your water rates over the next five years.”
Burnham also noted that Burton and Associates is recommending a rate reduction of 6.5 percent for the sewer system in 2016 “that would allow the fund to continue to be sustainable in the future.”
This reduction, Burnham added, would “allow for no adjustments through fiscal year 2020.”
For residents using a “minimum of 3,000 gallons of water per month,” Burnham said the lack of rate increases “would save about $1 per month on their utility bill” and $5 for residents using 5,000 gallons.
“The big driver there is, obviously, the town’s ability to secure grants and no-interest loans for the wastewater treatment plant,” Burnham noted.
Past the initial five-year period, Burton and Associates’ analysis showed a compounded 3 percent “inflationary increase” for both water and sewer rates from 2021 through 2025.
At the same time, Burnham explained that Burton’s analysis was completed while looking at “very conservative growth assumptions” and excluded “many of the larger development opportunities” like the second middle school.
The completion of these future projects, Burnham added, could “offset the need for those otherwise inflationary rate adjustments.”
Burnham explained that the projects would provide this additional revenue “much like a rate increase would.”
Compared to neighboring communities, Burnham pointed out that Front Royal’s average utility rates per-capita are lower than nearby rates for Woodstock, Strasburg and Winchester.
Based on the data from Burton, the new water bill for the 50 percent of residents using 3,000 gallons per month would drop from $27.22 to $26.10, which are both more than $25 less than the $53.70 for residents in Mount Jackson.
With the recommended rate actions of the next five years, Burnham said, “We would expect … that you will continue to be one of the lowest cost providers in the area.”
In a work session following Monday’s meeting, Councilman Bret Hrbek raised concerns over having a 3 percent rate increase starting 2021.
“I’d rather have a slow and steady increase over 10 years than have nothing and then all of a sudden compound at 3 percent for five years,” Hrbek said. “That’d be more difficult to swallow as a user than it would be to not have my water cut.”
Town Manager Steve Burke said, “We’ll continue to have our relationship with Burton and, in a year or two, we’ll bring them back.”
Burke added, “As we move forward, as we get new customers and as changes occur, that 3 percent will probably slide off.”
Overall, the council largely expressed that the study from Burton and Associates was “good news” for the town.
Councilman Eugene Tewalt said, “It’s very unusual to see a rate reduction, and I think it is because we made the right decision several years ago raising rates.”
Burnham said, “I think it’s the right thing, without affecting [the town’s] long-term sustainability, to give a little bit back.”
Contact staff writer Kevin Green at 540-465-5137 ext. 155, or email@example.com