The Great Purcellville Utility Fable: Tall Tales and Higher Bills 

By Kwasi Fraser, Former Town of Purcellville Mayor

In early June, I opened my Town Utility Bill and was unsurprised to find a political insert laden with misinformation, attempting to justify the substantial rate increases endorsed by Mayor Stan Milan, Vice Mayor Erin Rayner, and Council Members Mary Jane Williams, Kevin Wright and Caleb Stought.

This insert seeks to deceive the citizens of Purcellville into believing that our restructuring and refinancing strategy necessitates these significant rate hikes and the pursuit of annexation to boost town revenue. They cling to the fabricated narrative that our town faces a revenue problem rather than a spending problem, yet they recently voted to demolish a building to replace it with a parking lot, foregoing revenues from taxes and utilities. 

With the insert they have finally corrected their previous misstatement, which suggested that only the 2017 and 2021 debt restructurings occurred, by acknowledging the 2013 refinancing that took place before I assumed office. However, they conveniently omit the 2020 refinancing that lowered our interest rates without extending the debt. Let’s address the falsehoods in their insert. 

Under the heading of “How Our Utility Rates Are Set,” these officials assert that rates are based on estimated annual system costs, yet fail to categorize these costs, dedicating the rest of the paragraph to debt discussions without mentioning operational expenses like the annual $1.1 million siphoned from the utility fund to pay the General Fund. It’s no surprise they avoid discussing other operational expenses, as it would contradict their revenue problem narrative. 

In explaining bond issuance and payment, they omit the specific terms in the bonds that prohibit prepayment. This raises the question: where would these officials have found funds in 2013, 2017, and 2021 to pay off the principal when it was not permitted by our bondholder agreements? They neglect to mention the 2017 debt defeasance process and the millions in cash flow savings from our restructuring and refinancing efforts documented during our deliberations. 

They present an unsubstantiated cost figure for the 2017 and 2021 restructuring, without detailing the 2013 costs. They continue to falsely claim that principal payments were deferred via the 2017 and 2021 refinancing, without informing citizens that the 2017 restructuring enabled faster principal repayment than the 2013 refinancing and retired millions in debt through defeasance. 

 Contrary to their statements, the Town has never missed a scheduled principal payment on the water and sewer debt. They omit the cash flow savings from the debt restructuring and refinancing we inherited. 

If these officials want to educate us about utility debt, they need to tell the full story, starting with how we arrived here, the debt terms that prevented early prepayment, and the Town’s prior lack of resources to pay off the balloon payments. Each refinance and restructuring resulted in cash flow savings and reduced average annual payments and bought us time – a fundamental reason people refinance. 

 Their insert’s graph fails to show: 

• The events in 2010 leading to our significant debt 
• Cash flow savings from the 2013, 2017, and 2021 restructuring 
• The 2020 refinancing and the interest rate reductions 
• The millions retired from debt defeasance in 2017 

Alternative options to restructuring and refinancing given our bond agreements, limited funds, and rising operational expenses 

Regarding the Town’s receipt of American Rescue Plan Act funds, the insert fails to explain the efforts behind this achievement, presenting the $10,559,884 as if it magically appeared from federal legislation. 

They disregard the years of lobbying and advocacy by myself and other elected officials through the National League of Cities to prompt Congressional action. The hours of preparation during Congressional week in DC to articulate legislative priorities and bring vital tax dollars back to our communities are overlooked. ARPA funds were not a stroke of luck; they resulted from our hard work to drive legislative action. 

In discussing whether utility rates increased due to PFAS, they mention the $227,000 PFAS Pilot Study Grant but omit the over $2 million of debt adopted in the current budget for PFAS. The same budget where these officials voted for substantial rate hikes. 

If no PFAS-related costs were factored into the FY25 utility rates, where will the funds come from to service the over $2 million PFAS debt they advanced and adopted? What are the rate increases allocated across? It’s certainly not only for existing debt, given that annual water revenue prior to the rate hikes was 400% of the annual water debt payment, and annual sewer revenue was 200% of the annual sewer debt payment. 

The budget reveals that most of these increases, particularly in the water fund, are directed towards operational expenses and future infrastructure to support annexation and development. 

We had put in place a robust strategy to tackle the sewer debt, the sole significant debt burden in the Town. This strategy involves reducing or eliminating the millions in annual chargeback from the General Fund to the Utility Fund, utilizing portions of the substantial meals tax revenue to pay off the debt, and aggressively pursuing grants for Capital Improvement Projects. 

Mayor Milan campaigned on these very solutions, yet now he has reversed course. It’s time for our leaders to honor their commitments and address the real issues, rather than concocting crises and misleading the public.