Berryville Town Council Actions Will Double Sewer Rates

water-outflowThe looming specter of rate hikes for sewer service in Berryville moved closer to reality at the recent Town Council meeting. Based on the bid that the town accepted,   the rate for sewer service in Berryville will need to exceed $20.00 per 1000 gallons.

The upgrade to the wastewater treatment plant, initiated by the town in October of 2006, has now reached the point at which competitive bids are being reviewed. Thirteen bids were submitted for the project to replace the antiquated system, all of which were significantly higher than what had been estimated. After reviewing the bids town engineers Sterns-Wheeler has recommended the Town of Berryville accept the low bid provided by Caldwell-Santmyer at $21.7 million. This price does not include fees and the cost of the outfall line, which must also be included in the cost of the facility. When these items are included, the bottom line for the new facility will reach $30.1 million. This is more than 4 times the original estimated cost. The Town Council voted to accept the low bid for the project.

When asked about the discrepancy in estimate and bids Berryville Town Manager, Keith Dalton notes, “ Though we had hoped that the bidding environment would be favorable and we would get a lower cost, it just did not happen.   We had 13 bidders and the bids were relatively tight.   So, it would be difficult to say the environment was not competitive but this competition did not bring the prices down.   Some of this lack of price drop may be attributable to the complex nature of the project.”

The town’s options for funding the project are limited explained the town manager, “We expect the grant allocation we receive from the WQIF (Water Quality Improvement Fund) to increase as a result of the higher cost.   The last allocation broke down to roughly 45% of the cost of the project.” Although not guaranteed, Dalton further explains, “if that percentage holds true… then we will see approximately $1.1M more in grant funds.”   If those grant funds are received, “we would be responsible for $13.8M of the project.” The outfall line project is not eligible for grand funds and would be added to this. The total cost of which is expected to be an additional $5M. Dalton further explains we then reach, “a total of $18.8M for which we will be responsible.   The town intends to put $3M from its Wastewater Fund toward the project.   This leaves $15.8M.”

“The $15.8M is to be borrowed from the Virginia Revolving Loan Fund.   We have been approved for a 0% interest loan for a portion of the project and expect that we will receive 0% for the remainder of the loan.   The term of the loan is 20 years.   Given all of this, the debt service for this loan would be $790,000 annually.”

In addition to debt service, the town also anticipates significantly higher costs for Operations and Maintenance (O&M), which includes electrical, chemical, ongoing maintenance, and personnel costs.

So what does all this mean for residents? User fees and availability fees are the only way to pay for this Dalton explains. “Now that we have real costs on the major part of the coming capital expenditures we are working on a user rate and availability fees study.   I do not know when we will have those completed and in front of Town Council.   The original estimates placed the sewer user rate needed when the plant comes on line at nearly $16.00 per thousand gallons used (rate is now $11.00).   The rate will be higher than that estimate.   I believe the rate will need to exceed $20.00/1,000 gallons used when the plant comes on line.”

In a quick survey of towns in the area, the projected sewer rates for Berryville come in at three and in some cases four time more than neighboring municipalities. In town sewer rates in Leesburg are $4.55 per 1000 gallons. In Winchester the rate is $6.64.

Berryville is not alone in facing this dilemma. Strasburg is facing similar capital improvement costs and is considering creative payment scenarios to try to mitigate the cost increase to residents, instead shifting a greater burden to local businesses.

Comments

  1. All the bids were 4 TIMES as much as expected, so accept the lowest bid?!? [Redacted text] you should be fired!

  2. Navigator says:

    This goes all the way back to Sponseller. He held the costs down for decades and the people loved him for it. They had no idea that he and [redacted text] were letting the infrastructure go to hell. Now when they want to retire here in town they may not have the money to stay. That’s what decades of unchecked government will do for you. Sponseller knows this was coming and that’s why he bowed out when he did. It ends up making Kirby look like the bad guy, the one who will have to face the town when he had nothing to do with creating the issue.

  3. R. Rogers says:

    We live in a small town, and there are many reasons I love it here. One down side, though, is that there are simply fewer of us to split the costs of maintaining our own infrastructure.

    While a doubled sewer rate is a bit daunting, it beats the alternative of risking future sewage problems, which I would personally quite like to avoid.

    • oohhitstimetoleave says:

      well let’s see. we double our sewer rates every 3-4 years now all with the comment that we need to upgrade and maintain our infrastructure. How freely so many in this town give without question to those that run it. Our rates will be double the majority of jurisdictions in the country. I for one don’t mind paying for the upkeep but paying for incompetence is inexcusable!

  4. manohman says:

    Well, it must be nice for Strasburg to have local businesses to help defer the cost. Sure is a shame we don’t have any of that to help us. And what will happen once the cost is paid for in 20 years? They’ll lower the rates? How will this affect not only the homeowners, but the restaurants in town? That’s the only thing that we have and you can bet they will have to raise their prices to defer the cost. Then what? If they leave there will be NOTHING in town. Is that the goal??

  5. I wonder if this is even legal? Where is the consumer in this process, why are we simply at the mercy of the local government. At a minimum, we need to investigate this whole issue and fire those who are found to be incompetent. This is a complete outrage, not to mention our rates went up about 400% only a few years back.