Purcellville’s proposed significant rate increases lack factual basis

Dear Editor:

I am writing to express my profound disappointment with the recent article titled Purcellville Utility Bills to Nearly Double Over Next 5 Years published in the March 28, 2024 edition of one of the local papers. The assertions made by Mayor Stan Milan and town management regarding the necessity of significant rate increases are misleading and lack factual basis, and is a push for annexation.

Previous Town Councils were advised by fiscal advisors to set rates higher, and we challenged that advice based on the Town’s increased spending and lack of precision in predicting the cost of capital improvement projects that were more than three years in the future. 

As such, we actively challenged management to explore cost-saving measures, including proactively obtaining quotes from contractors to better predict and potentially reduce future expenses without compromising material or service quality. However, these efforts were met with resistance.

I am surprised that senior staff forgot to mention that in 2021, Davenport, our financial advisor, came before Town Council and stated that all we will need are modest annual increases of 5 percent in water and in sewer rates from then to the end of the debt. 

Then the following year, even with the $10.5 million American Rescue Plan Act (ARPA) money we received that was not budgeted for, we were told we needed to increase rates above the 5 percent. 

For management to now claim that we missed opportunities to increase rates on our residents and businesses –  I would challenge them to show that if their so-called missed opportunities were taken it would have resulted in revenue close to the $10.5 million from ARPA –  or the over $900,000 from the nutrient credit bank project. 

Interestingly, within their crafted web of deceit, they lament the absence of a rate increase on our residents and businesses amidst the COVID-19 pandemic as a missed opportunity.

Mayor Stan Milan, Vice Mayor Erin Rayner, and Council Members Mary Jane Williams, Caleb Stought, and Kevin Wright continue to propagate misinformation to avoid acknowledging the town’s spending problem and poor precision in estimating future capital improvement project funding needs. 

An examination of the utility funds reveals that the water revenue far exceeds the annual debt payments until 2038, indicating no debt issue or revenue issue with the water fund. Specifically, last year’s water rate generated revenue over 400% times the annual debt payment which can be sustained by modest rate increases until the water debt is retired in 2038.

The only debt challenge facing the town pertains to the wastewater treatment fund, a burden we inherited from previous administrations. Despite implementing measures to refinance and restructure the debt and obtain new sources of revenue during my tenure as Mayor, criticism persists from those who fail to grasp basic financial principles such as the time value of money or pricing elasticity. 

Even with the impending balloon payment, the 5 percent annual rate increase we had proposed three years ago would generate wastewater revenue approximately 170% times the annual debt payments until the wastewater debt is retired in 2040.

There are viable solutions to address the wastewater debt, including exploring contractor bids for cost-effective operations, reallocating a portion of meals tax revenue to utility operations, and reassessing long-term capital improvement projects to avoid unnecessary financial burdens on ratepayers. 

For example, this year’s budget has the Town funding a bond in excess of $2 million to address PFAS, when no data was presented to Town Council as a whole on evidence of PFAS in our water or any mandated solutions to address it if it should occur.

We currently have on Town Council, individuals who refuse to deliver on their promises to the voters and are focused on making Purcellville downtown look like a San Diego Street corner, and annexing land to extend our borders which is against the vision of our adopted Comprehensive Plan. 

It is imperative for your reporter to conduct thorough research and verification before disseminating information to the public. Blindly accepting and publishing statements from any Town Council without scrutiny only perpetuates misinformation and does a disservice to the Purcellville community. 

Kwasi Fraser, Former Mayor of Purcellville