WINCHESTER — Winchester’s water distribution system is the oldest in Virginia, and the third oldest in the nation.
It’s not a matter of if it will fail, but when.
That’s the reasoning behind a Winchester Public Utilities proposal that would increase water and sewer rates significantly to pay for $48.7 million in utility repairs and replacements.
If approved by City Council, Winchester utility rates would go up on Jan. 1 and continue to rise every year during the span of the five-year improvement project.
As proposed by Winchester Public Services Director Perry Eisenach, a city resident’s minimum water bill would incrementally increase from the current rate of $35.15 per month for 1,500 gallons of water usage to $37.70 per month, starting on Jan. 1, 2018.
After that, rates will increase every July 1 until 2022. The amount of the increase will depend on whether the city issues 20-year or 30-year bonds to pay for system repairs and improvements.
If a 20-year bond is issued, a customer’s minimum monthly water bill would climb to $54.10 by July 1, 2022. If a 30-year bond is issued, which would require the city to pay approximately $10.1 million more in interest than a 20-year bond, the minimum bill would be $53.11.
Additionally, new residents and businesses would have to pay more to tap into the city’s water and sewer system.
The current tap fees, which haven’t changed since 2004, range from $12,400 for a residential, three-quarter-inch water line, to $115,000 for a commercial, 6-inch water line.
If adopted, the new tap fees would increase on Jan. 1 to $12,500 for a residential line and $416,650 for a commercial water line. Those rates would be charged for both in-city hookups and Frederick County lines that use Winchester’s water and sewer system.
Eisenach said the rate increases are needed in order to ensure the continued operation of a public supply system that has offered uninterrupted service since 1808.
“About 60 percent of our system is old,” Eisenach told City Council at its work session on Tuesday night. “We have a lot of pipe that needs to be replaced.”
Winchester maintains about 125 miles of pipeline, most of which ranges in age from 60 years to more than 180 years.
Further complicating the situation, Eisenach said, is that many of the main supply lines, particularly in the city’s North End, are too small to provide enough pressure for fire hydrants.
“The incident that happened in our neighboring jurisdiction last week really underscores the need for adequate fire protection,” Eisenach said, referring to an Aug. 3 fire that destroyed a $670,700 home at 179 Rubinette Way in Frederick County. There were no fire hydrants near the house.
Additionally, Eisenach said, the majority of Winchester’s more than 9,000 small-line water meters are more than 20 years old and need to be replaced, its nine sewer pump stations have all exceeded their life expectancy, the pump station on Strothers Lane in Winchester and the Shenandoah River dam at the Percy D. Miller Water Treatment Plant near Middletown need repaired, the water treatment plant needs to be expanded from its current 10-million-gallons-per-day capacity, and a new maintenance facility is needed because the one on Woodstock Lane is in the Abrams Creek floodway.
Council President John Willingham said a series of tight city budgets in recent years meant that many infrastructure improvements had to be put on hold, but the water work can’t wait any longer.
“It becomes more difficult if you don’t do something for a couple of years and then have to catch up,” Willingham said. “We need a safe, reliable system. I have no other conclusion but we have to do this.”
Councilor Evan Clark agreed. “We really need to take a hard look at these numbers and start replacing this antiquated equipment,” he said. “I don’t want to be the guy on council who says, ‘Well, we were trying to save money.’”
Councilor Kevin McKannan didn’t argue the necessity of the repairs, but said council has to remember that Winchester residents and businesses have to foot the bill.
“We just passed a [4-cent real estate] tax increase on our citizens [that went into effect on July 1],” McKannan said. “I would prefer a priority list where we knock out a couple [of repairs] at a time.”
“I think they all have to happen,” Eisenach replied. “Personally, I would like to be more robust, but we can’t afford that.”
Even with the rate increases, Winchester’s water and sewer fees will still be lower than those of Berryville, Strasburg, Woodstock, Staunton, Salem, Richmond, and the counties of Clarke and Shenandoah. Current rates are already higher than in Frederick County, Stephens City, Front Royal, Harrisonburg, Leesburg and Charlottesville.
Eisenach said the proposed new rates will pay dividends beyond the immediate utility repairs.
For example, it will cost approximately $16 million to replace the city’s small-line meters, but since most of those meters are beneath sidewalks, $4 million of the project’s cost will be used to install new sidewalks.
Also, city water meters must currently be checked in person by a Utilities Department employee, which is a time-consuming process. The new small-line meters will have the ability to be checked remotely while driving past a customer’s property.
Once all the meters are replaced, Eisenach said meter-reading devices could be attached to trash trucks that already pass every home and business in Winchester on a weekly basis. With meters being checked much more frequently, it would be possible to implement monthly billing, which Willingham said would make it much easier on families trying to maintain a consistent monthly budget.
Most importantly, Eisenach said, is that by 2023, the Utilities Department’s reserve fund could grow from its current $2.8 million to $11.5 million, and the higher customer fees would generate $5.75 million annually for water and sewer main replacements.
“We’re proposing over the next five years to replace a lot of water and sewer mains, but after that five years, we’ll still have a lot to replace,” Eisenach said. “Replacing water and sewer lines will never end.”
“By 2023, we wouldn’t have to borrow money to make these improvements,” Willingham said. “It’s a perpetual improvement project.”
City Council is expected to vote on the proposed rate increases at its next meeting on Aug. 22.
If approved, the council will then decide when and how to issue $48.7 million in either 20-year or 30-year general obligation bonds. Eisenach suggested two separate bond issuances to spread out the debt service, but noted that current interest rates are so low that council may want to consider a single issuance to reduce its monthly bond payments.
As of Aug. 3, the average interest rate for a general obligation bond was 3.5 percent, according to WM Financial Strategies of Saint Louis, Mo.
— Contact Brian Brehm at email@example.com