Public Works and Environmental Services Alert:
The Wastewater Management Program has developed its financial forecast and its evaluation of the rates for service. The rates for service are designed to: i) recover the cost of operating and maintaining the system; ii) recover the payment of debt service and the funding of capital improvements; and iii) meet the financial policies and bond covenants as approved by the Board of Supervisors.
For Fiscal Year 2024, the Sewer Base Charge is increased by $4.67 per quarter for residential customers and by varying amounts for commercial customers based on their water meter size, as described below. The volumetric rate increase, for all customers, is $0.37 per thousand gallons of water consumption. Taxes paid to the county do not support the cost of collecting and treating the wastewater. The wastewater system is only supported by the fees that are paid by its customers.
The costs to operate and manage the system have continued to increase due to inflation, declines in billed wastewater flow, the need to continually upgrade and rehabilitate facilities and equipment reaching the end of their useful lives, and the need to meet increasing regulatory requirements. Additionally, the county must maintain a strong financial position in order to maintain its AAA credit rating for future bond issuances required to meet the capital improvement needs of the wastewater system.
The county has invested billions of dollars in its wastewater infrastructure, which is getting old and continues to require significant funding to maintain. Also, new regulations to protect the Potomac River and the Chesapeake Bay have required capital expenditures for the upgrade of all wastewater treatment plants in the Chesapeake Bay Watershed in order to further reduce their discharge of nitrogen and phosphorus. Finally, a large portion of our system is approaching the end of its useful life and now is, or shortly will be, in need of replacement. For the next ten years, the county has identified over $1 billion in capital investment needs. This continued reinvestment in the system will affect the rates for wastewater service.
The rates are effective with service rendered beginning July 1, 2023. For metered accounts, the change is effective with meter readings beginning October 1 of each year. For unmetered accounts, the change is effective with billings beginning October 1 of each year.
Approximately 70 percent of the costs to provide wastewater service are fixed and do not vary by wastewater flow to the plant. Also, although the service area has grown over 3 percent per year, the wastewater flow has not changed due to conservation and water saving fixtures. Because of this uncertainty in flow and recognizing most of our costs are fixed, it was determined that an increase of the Base Charge was needed.
The Base Charge is billed regardless of the amount of use a customer may have. Currently, residential customers with zero or low winter quarter use receive very small bills, because residential customers are billed for the entire year based on winter quarter use. For example, if a customer has zero winter quarter usage (they spend the winter elsewhere in a winter home) the customer only pays the current Base Charge of $44.81 per quarter for the entire year. This only recovers a small portion of the system’s fixed costs. However, the county incurs the total cost of maintaining the system for the benefit of this customer. Therefore, the Base Charge is being increased to equitably distribute the recovery of fixed costs amongst all customers.
For Fiscal Year 2024, the residential Base Charge is $44.81 per quarter, an increase of $4.67 per quarter over the current rate of $40.14. The Base Charge for commercial customers will vary depending on the meter size. The larger the meter size, the higher the Base Charge. The current volumetric Service Charge of $8.09 per 1,000 gallons will increase to $8.46 for both residential and commercial customers.
All residential customers will see the same increase in the Base Charge of $4.67 per quarter or $1.56 per month.
The size of the water meter will determine the Base Charge for commercial customers, as shown below:
|Meter Size||Base Charge|
|3/4" or smaller||$44.81|
Many utilities have a fixed cost recovery charge, and the industry norms indicate that many more are moving towards a fixed cost recovery basis for similar reasons as the county. The following is a summary of quarterly fixed charge rates of our neighboring wastewater utilities.
|Neighboring Utility||Quarterly Fixed Rate|
|Alexandria Renew Enterprises||$39.42|
|Prince William County Service Authority||$36.30|
|Washington Suburban Sanitation Commission||$29.38|
|Neighboring Utilities Average||$36.67|
The Board of Supervisors adopted the rate increases as part of FY 2024 budget.
It is anticipated that rate increases will be necessary in the future. However, the Board of Supervisors must approve any future rate increases.
To meet new environmental rules, the county will need to install new equipment and build new facilities. These items generate new operating and maintenance costs for the county. Also, the cost of electricity and chemicals used in treating wastewater will increase. The rate increases will be reviewed and adopted each year by the Board of Supervisors.