Higher fees may help finance sewer plant

Orange Town Council hears reports on sewer system upgrades

Date published: 10/12/2005

By ROBIN KNEPPER

The Orange Town Council continues to collect information on how to address the woes of a sewer system that leaks and a sewage-treatment plant that must be replaced.

The bottom line is that it's going to cost a lot of money. Where to get that money is the question that needs an answer.

At Monday night's Town Council meeting, Springsted Vice President John Anzivino presented a financial feasibility study for the proposed sewer plant. The public-sector advisory firm looked at various scenarios for funding the plant that could cost up to $20 million, and it recommended a combination of approaches.

Grants and loans will be necessary to pay for the new plant's construction; rate increases and seriously increased connection fees will be necessary to pay back the loans and fund operations.

Springsted recommended a 10 percent rate increase for present sewer users now and a 7 percent annual increase from 2006 to 2010. It also recommended increasing the connection fee from $7,500 to $16,440 and charging out-of-town users 50 percent more for sewer service than in-town users.

In response to a question from Councilman Rick Sherman about the effect of the connection fee on builders, Anzivino said developers from Northern Virginia would absorb the fee as a cost of doing business and add it to the price of the house. He added that it would probably be a concern to the small builder who would have a significant cash outlay at the start of construction.

Although Springsted's presentation focused on funding the new sewer plant, Town Manager Cole Hendrix told council members the town's "current rate structure is not paying for the operations" at the present sewer plant, something a rate hike would address.

In an analysis of funding sources for a new sewer plant, Anzivino told council members the town qualifies for the U.S. Department of Agriculture's Rural Utilities Service revolving loan fund and also would qualify for a grant from the Virginia Water Quality Improvement Fund.

The only hitch is that the town's consent order with the Department of Environmental Quality requires that a final financial feasibility report be submitted to DEQ by March 1, 2006. That deadline is a month before the town would know if it would receive a state water-quality improvement grant.

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Date published: 10/12/2005