At the November 20, 2019 Town Council Work Session on the water and sewer rate study, Stantec proposed three different alternatives as their recommendations to change our current seventeen-tier water rate structure to a new structure that would provide long-term sustainability by addressing four key objectives, including rate equity, stability, conservation and simplicity. While we did not have full Council representation at the work session, the general consensus was toward adopting Alternative C.  Alternative C simplifies our water rate system into two classifications; single family and non-single family, which includes all other users. The structure provides a water fixed charge, which is scaled based on meter size (based on average use) and has a water volume metric charge which provides for single family residential four inclining tiers (based on data analysis) and for non-single family with four inclining tiers (tiered by meter size). For our sewer customers, the new system includes a sewer fixed charge, which is scaled based on meter size (based on average use) and a sewer volumetric charge, which is based on a uniform rate. Alternative C provides a transition toward ensuring that our water and sewer rates are consistent with the cost of service for water production, distribution, and sewage treatment. Please see slides numbered 19 through 25 and slides 27, 28 and 30 of 66 (from Nov. 20 presentation).

The administration procured the services of Stantec during last year’s budget cycle and began a series of work sessions last fall which were designed to walk the Council through a four step study approach of financial planning, cost of service analysis, rate design and ultimately, public communication.  At this juncture, Stantec is walking the Council through rate design. Following selection of this alternative and the new methodology structuring water and sewer rates, the Town Council will be requested to adopt a water and sewer revenue sufficiency analysis and make a decision on adjusting water and sewer rates over the next decade.

This item aligns with recommendation 47, Conduct a utility rate study and move toward a simplified rate structure.

The selection of a methodology does not provide any impact to the budget, only when the Council delineates a specific revenue sufficiency analysis and rate charge will budgetary impacts be evident.

I move that Purcellville Town Council accept Stantec’s recommendation for a new water and sewer rate structure simplifying our seventeen-tier water rate structure to a two group system (single family, non-single family) with a water fixed charge scaled based on meter size (based on average use) and a water volumetric charge based on Alternative C, which provides for single family residential users four inclining tiers (based on data analysis) and for non-single family users, four inclining tiers (tiered by meter size). 

Be it further provided that the sewer fixed charge for all customers would be scaled based on meter size (based on average use) with a sewer volumetric charge (based on a uniform rate).

Under this alternative methodology to be implemented with future fiscal year rate changes both our water and sewer customers would be transitioning toward a cost of service methodology ensuring future equity and structural balance to implement a strategy that will permit Purcellville’s utilities program to function as a self-supporting enterprise account.