Leesburg Plans Utility Rate Change

Out-of-Towners to Pay Less; Residents, More

By Kafia A. Hosh

Saturday, August 1, 2009

The Leesburg Town Council proposed new utility rates last week that would gradually reduce the water and sewer bills of out-of-town customers but slightly increase those of residents.

The council held a public hearing Tuesday about the new rate structure, which seeks to repeal the 100 percent surcharge that Leesburg imposes on out-of-town customers.

After the trial in a lawsuit filed in 2006 by several out-of-town customers, Loudoun County Circuit Court Judge Thomas D. Horne ruled in March that the surcharge was unreasonably high and unlawful under the state code. He ordered the town to set new rates by Sept. 1.

The town hired an outside consultant to conduct a rate study to create fees in compliance with Horne's order calling for a lower surcharge. The proposed rates reduce the water and sewer surcharge to 33 percent and 53 percent, respectively, through fiscal 2015.

Under the proposal, the sewer and water bill for out-of-town customers who use an average of 18,000 gallons per quarter would drop from $285.30 to $225 this year.

The water and sewer rates for town residents would increase 7 percent under the plan. That increase would fall by about 1 percent each year until reaching 3 percent in fiscal 2015. The quarterly bills for residents who use an average of 18,000 gallons would rise from $148.86 to $160.20 this year.

Council members said the proposed rate increases for residents are minimal.

"The real costs have come down for the utility system on average," Vice Mayor Katie Sheldon Hammler said.

Hammler said her family would pay about 8 cents more per day this year.

But a handful of out-of-town customers criticized the new rate structure, saying it would increase their bills.

Brian L. Shiflett, a plaintiff in the 2006 lawsuit, said that under the proposed rate structure, the town is basing sewer charges on 100 percent of water consumption. Sewer charges are now assessed using a snapshot of a customer's water usage during the winter quarter, when water is mostly used for showering or washing clothes instead of watering lawns.

The new method for charging for sewer service punishes customers who water their lawns or wash their cars, Shiflett said, because if "that water doesn't go into the sewer system, it shouldn't be billed for sewer."

Council member David S. Butler said that the new method is not ideal but that it was a decision the council needed to make.

"What this does is, we basically have to make a choice to say, 'Do we charge the customer base as a whole, or do we focus on customers that, for lack of a better term, water their lawns?' " he said.

The proposed rates are being suggested at a time when the utility system's budget will have about an $800,00 shortfall this year. Town officials had anticipated that the system would generate $14.3 million this year based on customer growth projections and phased-in rate increases the council approved in 2005.

But the recent rate study showed that the system would actually need to generate $15.1 million annually, town Finance Director Norm Butts said Wednesday.

"We've always generated sufficient money to pay all the bills," he said, but "over a period of years, it gets to a point where operating revenue won't meet operating expenses."

The revenue pays for the maintenance and operation of the utility system and for the debt service on a bond issued to finance the system's upgrade.

The council is scheduled to hold a public hearing Aug. 11 on the proposed rate structure, at which time it also will adopt the rates.

Tagged: Board of Supervisors, courts, Leesburg, Loudoun County Circuit Court, utilities, water

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