Clarke plan on water hookup fees could spark development

Posted: April 17, 2013

The Winchester Star

Pictured is a sign in Waterloo advertising property available for sale or lease. Clarke County officials are discussing a plan to encourage business development there. (Photo by Ginger Perry/The Winchester Star)
Pictured is the intersection of U.S. 50 (John Mosby Highway) and U.S. 340 (Lord Fairfax Highway) at Waterloo in Clarke County. (Photo by Ginger Perry/The Winchester Star)

BERRYVILLE — Clarke County officials are floating a plan aimed at encouraging more business development in Waterloo by taking the edge off costly water hookup fees.

The proposal could help those who want to open a business at the intersection of U.S. 50 and U.S. 340 — a location commonly referred to as Waterloo — pay those costs.

The county’s Sanitary Authority on Tuesday morning agreed to the idea, which has support from the Board of Supervisors and the Industrial Development Authority (IDA). Once the details are locked in, the plan will go to the supervisors for final approval.

Last year, Robert Claytor, the Winchester developer behind the Handy Mart convenience center at Waterloo, told the county’s Economic Development Advisory Committee that the steep cost of connecting to the Sanitary Authority’s water system is cost prohibitive for some.

The cost of a hookup depends on the volume of water a business needs.

Mike Legge, administrator for the Sanitary Authority, pointed to the lengthy rate table on the agency’s website.

“We’ve never had a business that used more than 1,500 gallons per day,” Legge said of the Sanitary Authority, which serves Boyce, Millwood and White Post. The availability (hookup) fee for that amount of use would be $96,600 according to the chart, which goes up to 25,000 gallons per day at a fee of $1.3 million.

The high cost is a result of having a small number of users, which means the fees can’t be spread among a large number of customers.

Supervisor John Staelin has been working on a solution to the problem.

The new proposal, which would only cover the Waterloo area initially, would allow developers to estimate how much they would generate in tax revenue for the county over three years.

In return, the IDA — which collects fees for approving bond issues for large corporations, such as Shenandoah University or the Winchester Medical Center — would advance an amount up to that number to the Sanitary Authority for the water connection. The county would then repay the IDA as tax revenues are collected from the business.

Staelin said the county is, in effect, making a short-term investment to get revenue back from a long-term business. And the Sanitary Authority would gain an immediate paying customer in addition to collecting a hookup fee.

“Our fees are expensive,” Staelin said. “We know that.”

The amount of aid would be limited to the estimated amount of tax revenue — and, he added, even if the business doesn’t generate quite as much as expected, it would be obligated to pay the entire amount.

Sanitary Authority Chairman Ian Williams said that, with the concept approved, “we’re down to wordsmithing,” and that the proposal should be approved at next month’s meeting.

Staelin said the IDA will take a look at the draft agreement and any Sanitary Authority changes next week, and if the panel has no problems with it, it will be sent to the supervisors.

If the plan is approved and is successful in Waterloo, Staelin said the county might look for a way to implement it in other areas.

The Sanitary Authority also heard from Larry Johnson of Chester Engineering, the county’s consultant, that it should be able to advertise for bids on the proposed 100,000-gallon Millwood water tank as soon as the state signs off on the documents.

Member Alexander “Dan” Mackay-Smith said he expects that could occur within the next 60 days.

The authority wants to replace an aging 75,000-gallon tank off Browntown Road at the Prospect Hills Spring.

Attending the meeting at the Recreation Center at Chet Hobert Park were Chairman Ian Williams and members A.R. “Pete” Dunning Jr., Alexander “Dan” Mackay-Smith, Joseph Myer and Ralph Welliver.

— Contact Val Van Meter at vvanmeter@winchesterstar.com