FY25 Budget – Bad Timing for More Debt

By Purcellville Council Member Chris Bertaut

Purcellville is in budget season and the outlook is not good for the town’s residents. For the first time since 2012, millions in new debt is being proposed that will reverse progress made, with $12 million of our inherited town debt having been eliminated since 2012. The FY25 budget is being pushed through with a lack of transparency and regard for the citizens who Council Members are supposed to serve.

For FY25 and onward, the enormous rate increases of 16 percent for water and 18 percent for sewer assume that virtually all the Capital Projects will be needed and funded by Purcellville’s residents and businesses. The proposed utility rate increases also assume that there is no room for improvements to operating costs.

With the impending balloon payments, a 5 percent annual rate increase proposed three years ago by our utility rate consultants would generate water and wastewater revenue approximately 585 percent and 180 percent greater than our annual debt payments, respectively, in FY25. Changes from these ratios would continue with little change until the utility debts are retired in 2040. We must address rising costs for operating expenses and the chargebacks before we continue down the path of fleecing the residents.

Chargebacks are still contributing a million dollars a year to the cost of water and sewer services. The chargebacks are for work done by General Fund employees on behalf of the Utility Fund teams. There appears to be no accurate accounting of the work done by General Fund employees for the Utility Fund team since the most recently released budget report showed that the Utility Fund was charged two-thirds of the amount budgeted for Chargebacks at two-thirds of the way through FY24. This appears to be the result of charging the budgeted amount instead of tracking actual staff hours in the payroll system. 

Funding for capital projects need not come from the ratepayers since there are multiple Federal and State funding initiatives for municipal infrastructure that can be tapped, with new programs announced every year. 

The amount of additional debt service in the utility funds is about $1.61 million dollars in FY25. New debt is being proposed for the Water Fund to pay for a new water treatment plant that appears to be unnecessary given the current population of the town.

There is also $2.5 million in new debt proposed for treating Purcellville’s water for PFAS, which are chemicals that Federal and State regulators want to regulate. However, they have not decided when to mandate treatment and how much treatment will be needed. Why should we push debt onto utility customers before we know when it must be incurred?

What’s missing from Purcellville’s 468-page $30.5 million budget? There’s no mention of the cost to provide the water demanded by Chuck Kuhn in his Valley Commerce Center annexation application, which will require an almost 50 percent increase in the amount of well water that must be treated.  Purcellville will need to incur millions in new debt to bring on new water treatment capacity for wells if this annexation is approved. I would argue that this should be factored into the proposed budget.

Is the cost to Purcellville’s citizens in even higher utility rates and increased traffic next to many residences being considered? Why is the Town Council majority complacent when massive giveaways are in the works for developers with the costs of expansion dropped onto our citizens and the business community? Where is the Fireman’s Field revenue from advertising, which is guaranteed in the contract with Loudoun County?

Are the needs of our citizens and businesses for efficient delivery of government services outweighed by the allure of a quick fix through one-time utility connection fees and a desire to grow our way out of debt? Using even a small portion of Meals Tax revenue could offset utility rate increases, but that would require the Town Council to enact a policy, and the town’s management team to find ways to make their own processes more efficient to offset loss of revenue to the General Fund.

The Town Manager has proposed a 9 percent increase in General Fund expenditures. The overall budget is less than last year. However this is largely due to a temporary dip in expenditures for Capital Projects, which will resume their upward climb in FY26 and FY27, especially if the majority on Council push through annexation plans that are out of compliance with both the Purcellville and Loudoun County Comprehensive Plans. 

The process thus far this year has been marked by a lack of the very sort of governmental transparency that residents have been demanding for years. The proposed FY25 budget as a “lean budget,” echoes similar statements made by previous town managers. The budget before the Town Council is certainly not lean for our pockets.

There are only two scheduled working sessions for the Town Council to propose changes to this year’s budget. In addition, the detailed department-by-department presentation of the budget was eliminated, adding to the lack of transparency.

Rather than review the budget on a line-by-line basis as was done last year, the Town Manager, with the silent assent of the majority of the Town Council decided to make the budget approval process, in the words of the Mayor – “more efficient.” This cursory review of the budget leaves almost no time for public input, or debate by the Town Council. Why the rush? Speed is not efficient if it lacks a clearly stated purpose and direction.

The proposed budget was published on March 13, with final Town Council approval scheduled to take place on April 23. The real deadline to approve the budget is at the end of May. That leaves less than six weeks for the public and the Town Council to review 468 pages to find ways to improve the budget. The Town Manager has demanded that every cut proposed by a council member be accompanied by an offset. This, however, is not the job of the town council.

There are better ways to find efficiency in town government. For example, the FY25 budget adds another full-time procurement employee to the 11-member Finance department, when there is already one part-time employee doing the same job. Instead of continuing to outsource custodial services, the FY25 budget is adding a part-time staff member to do building cleaning. 

Purcellville often seems to pay far too much for the goods and services it purchases with taxpayer money. Recent examples include a cost of nearly $300,000 for an outdoor stage in Dillons Woods, and $50,000 for a building air-conditioning system comparable in size to a unit that would serve a typical residence in town.

This is not the time for Purcellville to take on more debt and budget for things we are not certain we need. Without enhanced transparency and fiscal prudence in the FY25 budget, I will not support it.