FRONT ROYAL — The Town Council recently voted to advertise a $5,000 reduction in tap fees, which is the cost to connect to the town’s water and sewer system.
The motion to advertise was approved by a 5-1 vote with Councilman Eugene Tewalt serving as the lone dissenter. Councilman Chris Holloway disclosed that he is a contractor before voting, saying it is not a conflict of interest to do so because of the large number of contractors in the area. Thus, he said, he is not part of a small group that would benefit from reduced tap fees and he is allowed to vote.
Tap fees are generally $15,068 in town and $30,136 in the county.
If the council approves the proposed amendment, the town would also take over the installation of equipment to connect to town water, which costs about $7,000 and is now done by private contractors.
Town Manager Joe Waltz said the amendment, if approved, would result in an estimated $200,000 loss of revenue that would have to be made up elsewhere.
Tewalt said that decreasing tap fees “is a joke” that would benefit contractors and not homeowners. He said the council has no idea how it would make up for that lost money, except taking it out of “the slush fund, as some people on this council call it.”
Interim Mayor Matt Tederick responded: “That’s what I call it, yes sir.”
“I call it money that we set aside for major projects,” Tewalt said, citing the potential need for upgrades to the water and sewer treatment plants.
Waltz noted that due to the overloading of the plants, the town has been under a consent order from the Virginia Department of Environmental Quality mandating that about $3 million be spent on the issue this year.
Holloway asked Tewalt how much money is in that “slush fund,” to which Tewalt responded that he did not know.
“Shouldn’t you know before you say anything about it?” Holloway asked.
Tederick said the “slush fund” is “really the unrestricted fund balance” that has $12.1 million available. He said: “I would argue that $12.1 million came from tap fees.”
“Tap fees do get passed on to the homeowner...When you have a home that’s being built for $200,000 and 10-12% of that home construction cost is a tap fee, it’s egregious, I think it’s wrong. I’ve been against it for a decade. This policy was instituted to stop growth in Warren County,” Tederick said.
He added that the town has been sitting on money for too long and he has no problem using the $12.1 million to fund upgrades at treatment facilities.
Tewalt responded that money will likely not be enough to fund all future expenses. He added that $12 million is not a lot of money, considering it is part of a $40 million town budget.
“It’s just like your home...do you spend all of your savings just so that you don’t have any in the future to take care of any emergencies?” he said.
Councilman Gary Gillispie said he rejects the premise that the town should collect taxpayer money and “hang on to it.”
“If it’s not going to be used, give it back,” Gillispie said.
During a public comments period at the meeting Monday, citizen Linda Allen noted that a reduction of tap fees leaves the door open for developers to provide candidates “kickbacks” in the form of campaign donations. Tederick responded that would be illegal and he does not know of any council member who would do such a thing.
The amendment, which the council approved on Monday, must be advertised for two weeks before being the subject of a vote.