The Amherst County Service Authority is considering a 5% increase in water rates and a 6% sewer rate hike in 2021.
The authority’s board of directors reviewed financial planning for the upcoming year during its September meeting and decided on pursuing on option that would enact lower rate adjustments from others suggested.
A planned 5.56% increase for water rates is less of a decrease from last year’s 7.4% increase and no change to the basic service charge for water is planned in 2021. A 6.56% hike for sewer rates is less of an increase from last year’s 8.5% and a $1 increase in the basic service charge for sewer is proposed.
No adjustments to water and sewer tap fees, which were adjusted last year for the first time in five years, are planned in 2021.
Another option, which is not moving forward, proposed raising water rates by 8.88% and sewer rates by 9.88%.
Bob Hopkins, the authority’s director, said the planned rate increases would be lower than they’ve been in the past several years if approved. “They have been higher than I would like them to be,” Hopkins told the board at its Sept. 1 meeting. “We have an opportunity to drop them back down.”
The rate increases in recent years has been to help the authority brace for the effects of losing a major user, the Central Virginia Training Center, a state-run facility in Madison Heights that is in the process of shutting down, Hopkins has said. CVTC, which for more than century served residents with disabilities, relocated its last remaining resident in April and has a staff of a dozen closing down the site.
“I’d like to keep the rate increases at a minimum,” Hopkins said.
According to Hopkins, the authority provides utility service to just more than 6,300 water accounts and roughly 1,100 sewer accounts.
A public hearing on the planned rate increases is expected in October, according to Hopkins. If approved, they would take effect Jan. 1.
"The proposed increases are the lowest we've seen since I joined ACSA in 2016," Hopkins said in an email to the New Era-Progress. "The last few years have seen higher increases than we preferred because of three major capital projects that we have to complete very soon."
The projects include improvements to the Graham Creek Reservoir Dam and emergency spillway, and estimated $5 million project the county is in the process of financing through a state loan process and is expected for completion in November 2023.
A new raw water intake on the James River estimated at $5 million needs to be done by the end of 2025 and an overhaul of the authority's Williams Run Sewage Pump Station, another estimated $5 million project that is years overdue, according to Hopkins.
He said each of the three projects' estimates exceed the authority's annual budget.
In the last three years the authority has seen rate adjustments that increased from 5.75% to 6.6% before going to 7.40% for water and 7.75% to 8.5% for sewer, which Hopkins said ensures annual revenues and financial reserves were sufficiently built up to handle the financing for the trio of major projects.
The planned rate increases coming down rather than up indicates the authority's finances "are getting where they need to be, hopefully heralding continued decreases in the annual adjustments in upcoming years," Hopkins said.
"But that's not a given," Hopkins added. "Our financial consultants annually project five years into the future, looking at our revenues, expenditures, audits, debt service, asset management, etc., proposing the annual rates and fees adjustments needed to take care of everything we need to do and keep ACSA financially viable."
Hopkins said considering the COVID-19 pandemic and its many effects on the local economy, the authority's annual rates may have to increase again in upcoming years.
"But we'll do everything we can to avoid that," Hopkins said. "We hate the effects this has on our customers."
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