Majority town council still peddling rate hike justification with “political insert”

By Valerie Cury

At the June 11 Purcellville Town Council meeting, comments were made during the council comments portion regarding the political insert in the town utility bill. Also, council voted 3-2, with Mayor Stan Milan, Vice Mayor Erin Rayner, and Council Member Kevin Wright to demolish the Pullen house at a cost of $49,260. Council Members Chris Bertaut and Carol Luke voted against. Previously supporting the decision to demolish the Pullen house but not present for the vote were Council Members Mary Jane Williams and Caleb Stought.

Council Member Chris Bertaut said, like all citizens, he received the “political insert masquerading as justification for the recently adopted [utility] rate hikes.” He said the insert was done without his knowledge or permission. He asked that his name and Council Member Carol Luke’s name be removed from the insert and a revised one be issued. 

Bertaut said the insert lacks in “substantiated data and follows the ongoing narrative championed by Mayor Stan Milan, Vice Mayor Erin Rayner, and Council Members Caleb Stought, Mary Jane Williams and Kevin Wright. 

“They claim that previous town councils could have drastically reduced our debt had they not pursued the restructurings and refinance of 2013, 2017 and 2021.” This restructuring was, however, done on the advice of “our financial experts at Davenport and Company,” said Bertaut. He pointed out that the majority omits “what their alternative strategy would have been and what the cost would have been to the residents of Purcellville.” 

Explaining further, Bertaut said the “insert falsely implies that the 2017 and 2021 restructurings pushed our debt repayment out by ten years. In reality it was the 2013 restructuring that extended the debt repayment by four years, while the 2017 and 2021 actions extended it by a total of six years.

“Moreover, the 2017 restructuring led to the retirement of about $2 million in water utility debt through a process called debt defeasance—a significant fact our management team seems to have overlooked in the face of unsubstantiated claims by our current leadership.”

Bertaut pointed out that the 2020 refinance achieved a lower interest rate without extending the debt payoff period. “Yet this fact goes unmentioned,” he said.

Going over some of the specific numbers from the utility restructurings and refinance, Bertaut pointed out that the “2020 refinance resulted in $817,608 in savings from a lower interest rate on the General Fund debt, and it did not extend the payoff period for the debt, which is 2034.” The General Fund is supposedly separate, but it hinders the Utility Fund by charging this fund $1 million annually in chargebacks. The Utility Fund must pay those chargebacks to the General Fund, Bertaut said.

For sewer debt: “The 2013 restructure extended payoff to 2034. The 2017 restructure extended it from 2034 to 2038. The 2020 refinance did not extend it, and the 2021 restructure extended it from 2038 to 2040,” he explained.

In 2021, then Council Member Milan supported the 2021 restructure he now criticises.

For water debt: “In 2013, the restructure extended payoff from 2032 to 2033. The 2017 restructure extended it from 2033 to 2038. The 2020 refinance did not extend it, and neither did the 2021 restructure,” said Bertaut.

Bertaut pointed out that the insert also stated that “PFAS [Per-and polyfluoroalkyl substances] did not affect the FY25 water rates. I have yet to hear our utility consultant agree with that statement. In the past, Stantec has used rate-leveling to avoid rate shock. Rate leveling works by accepting a higher rate increase in the next fiscal year—FY2025, in this case—to avoid a much higher rate increase in following years.” 

The majority of town council approved adding a debt of $2.5 million for a yet undetermined need to treat PFAS in 2029.

“Where do I start?” asked Milan. He said in reference to Bertaut’s comments, “I don’t know how you can separate yourself from a document that was part of the budget decision and not be wanting your name on that.”

“The budget was approved by a majority on the council, and even though you were not in the majority to approve it—you voted against it—but the body as a whole is represented on the document.”

Defending himself, Milan, who is running for Mayor against Bertaut in November, said, “The data that was represented on the chart was a result of the data from the budget.”

Changing subjects and hitting back at Council Member Carol Luke, Milan said Luke’s comments on the “revitalization of dilapidated buildings on 21st Street is a mute [sic] point.” He said the buildings have been renovated and are occupied by four businesses. 

“So, I am trying to figure out where there are dilapidated buildings on 21st Street. Some of the buildings like White Palace is [sic] being renovated and it’s taking a while for that to occur.”

Milan was referring to Luke’s council comments about the town focusing its energy, staff time and funds on doing a master plan. The plan would be complete with roadway infrastructure changes of the Historic Downtown District, and it would slow roll the planning commission’s efforts to finish the zoning ordinance, which has been identified as a top priority.

Luke asked how many of the properties on and behind 21st Street are owned by one entity. This question was for the sake of the only properties in the area that have been either sitting vacant or blighted. Two years ago, the owners of the Vineyard Square project terminated their renters’ leases so they could show “progress” on their active permits.

These properties are part of the Vineyard Square project on and behind 21st Street, which has been approved for commercial use plus 40 condos and six stories. The developers of the project have had active permits for 14 years, but they have failed to move forward. They need significant infrastructure additions in the area to accommodate even a portion of their project.

Luke asked if there were active building permits on these properties. How long have these permits been in existence and when do they expire?” 

“Have these buildings deteriorated during these 14 years? What substantiative actions have taken place to maintain or improve the condition or usefulness of these properties? Does the Town of Purcellville have any laws that govern the responsibility of property owners in commercial areas to maintain and improve their commercial properties in an effort to maintain a viable commercial area? What effect would allowing a given commercial property to deteriorate and/or stand empty on the adjoining properties [have]?”

Luke said the town is already in debt and now will spend tens of thousands to “meet the needs of one developer” by doing a fourth charrette.

Even though Milan ran on selling the Pullen house for redevelopment to retire the Parks and Recreation debt, he did a complete reversal from first voting to list the property for sale to approximately six months ago voting with the council majority to cancel the sale of the property. The Pullen house had a cash offer for $350,000. It also would have generated water and sewer revenue. 

The cost to the town for demolition is $49,260. In addition, the town will disconnect utility access. For a vacant property which does not have any hookup to town utilities, the cost to connect is nearly $50,000. 

Bertaut said the sale of the property “would have relieved our citizens of Parks and Recreation debt.”

Milan said the space could be used for 45-48 parking spaces. Nearby parking lots in town with 40-plus spaces have more parking than would be created if a parking lot were built on the Pullen house property.

Over 15 years ago when faced with a blighted town-owned residence, instead of tearing it down, then Council Member Nick Pelchar worked with Good Shepherd Alliance, who completely rebuilt the home. Since that time, it has been used as a home for new mothers. The organization eventually bought the home from the Town of Purcellville.