Actions taken in March of this year committing the Town of Berryville to a $27 million water treatment project have finally come home to roost for residents. Last night (7/13/2010) the Berryville Town Council set a public hearing for the proposed sewer rate increases that will be needed to begin retiring the $11.75 million debt incurred by the project.
The lion’s share of the funding for the sewage treatment plant came in the form of a loan from The Virginia Resources Authority (VRA). The loan agreement with VRA required the town to adopt a “Business Plan” that demonstrated the town’s Sewer Fund will have sufficient funding to meet the loan obligations. The business plan included four years of rate increases as follows:
- July 2010 $1.50 to $12.50 an increase of 13.6%
- July 2011 $1.50 to $14.00 an increase of 12%
- July 2012 $1.50 to $15.50 an increase of 10.7%
- July 2013 $1.50 to $17.00 an increase of 9.6%
The initial rate increase being considered is the first since rates jumped in October of 2006. The new rate would become effective on August 25th and customers would see the new rate on their Sept 30th bill. The Town is required by law to hold a public hearing before raising utility rates, however the structure of the business plan leaves little room for a change in course at this point.
Town Manager Keith Dalton was quick to point out that the business plan adopted by the Town to retire this debt did not include any funds from availability fees. These fees are paid by new construction projects for access and hook-up to the town system. Given the woeful state of the construction industry in recent years the town could not put a reliable number in their submitted business plan other than zero. Dalton, however positioned the future potential impact of availability fees as a ray of hope saying, “Hopefully, at the end of the day the sewer rates that are shown will not have to be adopted.” In closing Dalton recommended the Town move forward with this initial rate increase.
Council set the hearing date for August 10th.