Subject:
Title
Intent to Adopt FY 2025-26 Water and Sewer Rates
Body
DATE(S) OF PRIOR COUNCIL CONSIDERATION OF THIS ISSUE:
March 15, 2025 and March 17, 2025, budget work sessions
April 7, 2025 - Public hearing
EXPLANATION AND SUMMARY:
Town water and sewer rates for consumption and service charges are based on the results of a rate study conducted in FY2023-24, which laid out a plan for five years to ensure the fund has adequate operating reserves. During the past fiscal year, the Town reviewed actual water and sewer consumption patterns by tier to ensure that budgeted rates provided an adequate cash reserve for the fund. Due to inflation and higher-than-average increases in the cost of replacing pipes, the wholesale cost of water and the treatment cost for sewer, rates need to be increased to keep the fund in balance and support its goals.
Water rates are budgeted to increase 7.25 percent, and sewer rates are also budgeted to increase by 7.25 percent, both based on actual billed experience by rate tier and costs to purchase water and sewer line replacements, and wholesale water and sewer treatment costs. The quarterly base rate is proposed to increase from $40 to $42 per quarter for most residential customers, or 5 percent. This increase is necessary to bring the total percentage of fixed charges in line with industry standards. Commercial customers’ fixed charges are proposed to increase by 5.2 percent based on meter size. Overall, the average residential customer’s bill is proposed to increase by $19.00 per quarter, or $75.00 annually, an increase of 7.1 percent.
Water availability and meter purchase fees are proposed to increase by 2.0 to 3.0 percent, to match fees charged by Fairfax County. Increased percentages are minimal and will have a small positive impact on revenue. Consumption charges proposed for FY2025-26 are as follows:
|
RESIDENTIAL CONSUMPTION |
Block Rate |
|
Water 0 - 9,000 gallons |
$7.55 per 1,000 gallons |
|
Water 9,001 - 18,000 gallons |
$8.25 per 1,000 gallons |
|
Water 18,001 plus gallons |
$9.45 per 1,000 gallons |
|
|
|
|
Sewer 0 - 9,000 gallons |
$12.00 per 1,000 gallons |
|
Sewer 9,001 - 18,000 gallons |
$13.10 per 1,000 gallons |
|
Sewer 18,001 plus gallons |
$15.10 per 1,000 gallons |
|
|
|
|
Residential Base Rate |
$42 / quarter |
|
COMMERCIAL CONSUMPTION |
Block Rate |
|
Water 0 - 120,000 gallons |
$7.55 per 1,000 gallons |
|
Water 120,001 - 360,000 gallons |
$8.25 per 1,000 gallons |
|
Water 360,001 plus gallons |
$15.10 per 1,000 gallons |
|
|
|
|
Sewer 0 - 120,000 gallons |
$12.00 per 1,000 gallons |
|
Sewer 120,001 - 360,000 gallons |
$13.10 per 1,000 gallons |
|
Sewer 360,001 plus gallons |
$15.10 per 1,000 gallons |
|
|
|
|
Commercial Base Rate |
5/8” meter $65 /quarter |
|
|
1.0” meter $160 / quarter |
|
|
1.5” meter $325 / quarter |
|
|
2.0” meter $515 / quarter |
|
|
3.0” meter $1,035 / quarter |
|
|
4.0” meter $1,610 / quarter |
A public hearing was held on April 7, 2025, to allow public comment on the new rates. The finance department requests that Council adopt the rates as proposed, effective
July 1, 2025.
Departmental Recommendation: Recommend approval of water and sewer rates for FY2025-26.
Finance Recommendation: Recommend approval of water and sewer rates for FY2025-26.
Purchasing Recommendation: N/A
Town Attorney Recommendation: The Town Council has conducted a public hearing on the proposed FY2025-26 water and sewer rates and the Town Council may adopt the advertised water and sewer rates in its discretion.
Town Manager's Recommendation: I recommend the Town Council adopt an ordinance setting water and sewer rates for fiscal year 2025-2026, as presented.
Cost and Financing: $13,920,750
Account Number: various
Prior Funding Approval: Annual General Budget (Year), Amendments, CIP Budget (Year), or ARPA. N/A
Decision Needed by this date: May 19, 2025
PROPOSED/SUGGESTED MOTION
Recommended Action
" I move to adopt an ordinance setting water and sewer rates for fiscal year 2025-26, beginning July 1, 2025, as presented.”
AND
"I further move to direct the Town Clerk to advertise a Notice of Adoption.”
Or
Other action deemed necessary by Council.