Fiscally stressed town looks to a utility rate increase

Financial matters — worries, even — took up most of Monday night’s regular monthly meeting of the Washington Town Council.

The council took few actions, but voted unanimously to schedule a public hearing for next month’s meeting (7 p.m. April 12 at town hall) on a proposal to raise usage rates for the town’s water and sewer systems, likely by 25 percent.

Several of the council’s members, including Joe Whited and Treasurer Gail Swift, who worked together on the rate proposal, made it clear that the town faces exhausting its reserve funds by the end of the year if it doesn’t act soon on increasing revenues.

“I’ll call it the elephant in the room,” Swift said. “This has not been looked at or brought forward in five years. We were going to talk about it last year, and then the pandemic arrived, and we decided it was not appropriate … Things are now where we have to seriously look at rate increases.”

“The town operates at a structural deficit of $60,000 to $80,000 a year,” said Whited during what turned out to be a half-hour discussion on the subject. He noted that thanks to various timely windfalls — the town’s sale of Avon Hall several years back, and the decision last year to accept a one-year deferment of the town’s biggest single fixed expense — the town scraped through the “structural deficit” and was able to make payments on its $4 million wastewater treatment plant (of which a balance of about $1.2 million remains).

But the one-year deferment, Swift said, means that the town’s twice-yearly payments of $88,000 were added back to the total balance due. On May 1, those payments will increase to $99,000, she said.

About half the town’s revenue comes from its meals and lodging tax, and the lion’s share of that is paid by the Inn at Little Washington, which, like restaurants throughout Virginia, has spent nearly a year with substantially reduced operations to comply with the governor’s public health mandates.

Whited said the 25 percent water-sewer rate increase — 12.5 percent on July 1 and another 12.5 percent Jan. 1, 2022 — would raise “close to enough to close the deficit gap — about $50,000 to $55,000.”

For those who pay the minimum, Whited said, that would be a $15.80 increase in their sewer and water bill.

The council also scheduled its public work session on the fiscal year 2021 budget for 10 a.m. Saturday, March 20 — a virtual meeting to be conducted via Zoom. (Those interested in attending can contact town clerk Barbara Batson at townofwashington@washingtonva.gov or 540-675-3128.)

Swift, who crafted a $605,940, COVID-crunched town budget for the current fiscal year — down about a third from the year before — hinted that more of the same is likely for fiscal year 2021, which starts July 1.