Town council considers utility rate increase; fireworks ensue

‘Why is this town broke? Why is it struggling? Where is the money going?’

On its proposal to raise rates for water and sewer service by 25 percent over the coming year to avoid going broke, the Washington Town Council held a public hearing at its monthly meeting Monday night.

And it heard an earful, only not exactly from the public.

The relatively small crowd at town hall had little to say about the proposed rate change, which would increase the average monthly utility bill in the town of 130 by about $15 by next Jan. 1 — and yet the council voted a er the public hearing to table the matter until next month.

This may have had something to do with the fact that most of the comments about the proposal came from Patrick O’Connell, who is significantly less well-known internationally for his membership on the Washington Town Council than as the chef and proprietor these last 43 years of the Inn at Little Washington, the Michelin threestar restaurant and hotel that sits just across the hedge from town hall.

Council member Joe Whited Monday night reemphasized the town’s dwindling reserve fund and an annual “structural deficit” between $55,000 and $80,000. After Whited said the town is in danger of draining its cash reserves to near zero by this time next year, O’Connell raised a hand and asked Mayor Fred Catlin if he could comment. And — speaking softly but in a distinctive baritone that easily overcame the pandemic mask and the social distance between the council members spread across four tables at the front of the hall — comment he did.

“It’s worth pointing out that one entity in the town is paying more than half the revenue for the sewer and water,” said O’Connell, who is usually the council’s least talkative member, regularly recusing himself from discussions of anything involving the Inn directly — and who almost never talks, in any forum, about the Inn’s finances. He added: “And that is around $8,900 a month.”

Moreover, since 1995, he said, the Inn has paid the town “well more than $6 million” in meals and lodging taxes. “And, in spite of COVID, in spite of being closed for two months [in early 2020],” he added, “we paid the town 14 percent more this year than we did last year” in meals and lodging taxes. He said Inn-derived meals and lodging tax revenue has increased more than 35 percent since 2016, when it was $237,000. In 2020, he said, it was $332,000 — putting the Inn’s current combined sewer and water bill and meals and lodging bill at just under $440,000 a year.

“One might ask, ‘Why is this town broke? Why is it struggling? Where is the money going?’” O’Connell said, while several council members either chuckled or visibly straightened in their Colonial-style armchairs upon hearing a fellow member of the town’s governing body ask such a thing, even rhetorically. But O’Connell — whose long interest in theater, as applied to food, decor and ambiance, is as good an explanation as any for his restaurant’s extraordinary success and longevity — wasn’t finished yet.

“It’s a very difficult town to run a business in, or to attract a business to come here,” he said. “Most people find it overly restrictive and highly taxed for a town this size. So I think some consideration should be given to commercial users. And I think the facts need to come out here of how much money we are fortunate enough to be providing.”

O’Connell continued: “And may I also say, it is not easily earned. I’ve been working seven days a week for the last year, and … have worked harder than I ever have in my whole life — as my whole staff has, to keep our business open, to keep our guests happy, and to keep enticing them to come and discover Washington, Virginia,” said O’Connell, who is 75.

“So, we’re not asking for special treatment, we’re simply asking for the consideration of … when is enough enough?”

O’Connell told a story about his conversation with an Inn attorney back in the 1980s, when the town of Washington first instituted its 2.5-percent meals and lodging tax. The lawyer — “He’s dead now so I can talk about it,” as O’Connell put it, making everyone laugh — told the Inn owners that it was “totally and completely illegal to tax one entity when you’re the only food and lodging establishment in the town,” but his advice nonetheless was: Pay it.

“Because they’ll have to be intelligent enough to realize that they’re entering into a partnership with you at that point,” O’Connell quoted the attorney as telling him. “You are creating a partnership with the town of Washington, one that benefits the town and benefits the Inn. Hopefully the next time you try to do something, they won’t block you or impede your progress. They’ll realize that what helps the Inn helps the town, what makes money for the Inn makes money for the town.”

O’Connell paused ever so briefly, and added: “Unfortunately, he was wrong.”

There was mostly silence in the room, and O’Connell continued. “But we’ve come a very long way and we’re very grateful for the support that we do have … but it’s interesting that other towns over the years continually contact us and say, ‘Is there any chance you might consider opening a branch in our town? We will waive all the restrictions, all of the taxes, we will give you a stipend to entice you to come here,’ watching what this entity has done over 43 years to benefit the town of Washington, Virginia.

“We are very happy here. I suggest that we look hard at the numbers . . . [and] that we’re penalizing the primary user of the sewer and water. And take into consideration what that user is providing in other benefits to the community. Also realizing that perhaps other businesses might like to come here some day, but they will find it onerous if they are taxed differently than the homeowner.”

The town’s original plan for the decade-old sewer plant — the town will be paying about $200,000 a year on the original loan for another six years — was eventually to become self-supporting by taking on more users.

“But there seems to be a mixed messaging,” O’Connell concluded. “Do we or do we not welcome growth for the sewer and water system?”

“Absolutely,” said Whited, who later explained that he believes the town must act soon and can’t afford to wait for approvals of any new residential or commercial development — including the significant commercial-residential prospects presented by the Black Kettle project, awaiting Rappahannock County’s decision on whether to allow the town to extend its northeastern border to include the nine-acre property.

“I think our comprehensive plan makes it clear … that we encourage growth,” said Catlin.

O’Connell and Bob Fasce, the Inn’s general manager seated in the town hall audience, told the council that — with the opening this summer of Patty O’s, the Inn’s upscale cafe in the former post office building, and an unexpected, pandemic-inspired uptick in trade for a luxury dining destination that is nowhere near a city — the Inn expects its business, and thus the town’s meals and lodging revenue, to continue to rise this year.

Catlin suggested the council table the sewer and water rate increase while he, Whited, treasurer Gail Swift (who wasn’t at this month’s council meeting) and other council members reassess revenue and cost projections, and consider the possibility of only raising the rates by 12.5 percent on July 1 — instead of 12.5 percent July 1 and another 12.5 percent Jan. 1, as planned. And that the council review revenue again later this year before deciding on the Jan. 1 increase. His motion passed unanimously.

As it did during the brief discussion that followed O’Connell’s comments, the phrase, “I don’t want this to sound like an Inn-versus-the-town thing” reappeared more than once later in Monday’s meeting when the council briefly considered the possibility of creating an ordinance that would allow it to regulate fireworks displays within the town.

The issue first arose last year — when, after several years of hosting no more than one wedding party whose guests had paid for a professional firework display, the Inn last summer had five fireworks events, permits for which are issued by the county, which considers primarily safety issues and pyrotechnical certifications, not noise levels. The last event was louder than most, according to council member Brad Schneider; it traumatized numerous pets, including at least one cat who went missing for a day.

Ordinance or not, Catlin and Vice Mayor Mary Ann Kuhn said discussions with Fasce at the Inn about fireworks events have made email and/ or phone calls to town residents more reliable and timely. Kuhn said she was unsure how the town could realistically put a limit on fireworks permits, and both Fasce and O’Connell said last year’s glut of after-dark ordnance also seemed to be a result of the pandemic, which cancelled many large wedding parties; for some reason, O’Connell said, fireworks out in the country became a popular, photo-friendly substitute for an extensive guest list. Fasce said he expects the phenomenon will wane as social distancing becomes a thing of the past.

Council members Whited and Jean Goodine expressed doubt that the town should regulate fireworks, and others pointed out that fireworks displays just outside the town limits — not to mention neighbors’ target practice, a familiar but unadvertised benefit of Rappahannock living — would be just as noisy. Jay Brown, an attorney who owns the Gay Street Gallery with his husband, artist Kevin Adams, quietly but clearly raised the issue of the town regulating noise when “another entity in town” violates noise norms “every day, on the hour,” obviously referring to Trinity Episcopal Church’s clock-tower chimes without naming the accused.

Because of the council’s upcoming preoccupation with a fiscal-year budget, and the related utility rate increase, Whited suggested tabling the fireworks issue until July, and the council agreed.

“July — as in Fourth of?” said O’Connell, sans fireworks.

“One might ask, ‘Why is this town broke? Why is it struggling? Where is the money going?’” O’Connell said, while several council members either chuckled or visibly straightened in their Colonial-style armchairs upon hearing a fellow member of the town’s governing body ask such a thing, even rhetorically.