Town adopts utility rate changes, holds public hearings

Hillsville Town Council at its May 13 meeting approved utility rate changes and made a new appointment to the Hillsville Planning Commission. No comments were given during public hearings on the proposed Fiscal Year Budget and the rate changes which will go into effect in July.

Information supplied by the town indicated the initial budget general revenue request for 2024-2025 would be $4,072,560, an increase of $149,341 over last year’s revenue of $3,923,219. Hurt & Proffitt Representative Dennis Amos presented the study results to council.

The summary of the report took into account no major future water system projects in the budget and suggested an annual increase of three percent for most expenses, excluding principal and interest. Future sewer system projects include $99,252 for a Rural Development sewer project set to start in 2025 and a Department of Environmental Quality sewer project budgeted for $25,300 set to begin in 2026.

A continuing transfer from the General Fund is from the loss of Enterprise Funds (water and wastewater) with wastewater loss due to a lack of flow to an oversized treatment plant and the debt service associated with plant construction. The departure of Parkdale Mills worsened this. Enterprise Funds are required to be self supporting by the Virginia Resource Authority, which is the debtholder.

The executive summary states previous rate studies were “inaccurate due to the unforeseen pandemic, wage requirements in Virginia, AEP increases and other unexpected significant supply increases.”

Earlier drafts of the proposed budget noted the totals reflected a reduction in Retained Earnings by $410,558. Action by council on the water and sewer rate study could result in enterprise funds breaking even and economic investment in the community by Fiscal Year 2028. The existing tax rates are eight percent for meals, eight percent for transient tax, 21 cents per $100 real estate tax valuation, and personal property and machinery and tools tax of 72 cents per $100.

The study suggested for both water and sewer departments an annual increase of ten percent for Anthem Insurance and a twenty percent increase annually for VRSA (Virginia Risk Sharing Association) Insurance. The study predicted water and sewer systems related electricity cost increases would be variable. These increases would take place through the next four years.

The report describes electricity cost increases as variable. The measure was proposed in light of the departure of Parkdale Manufacturing and the end of COVID-related funding to localities. Annual water rate increases from 10 percent to 10.5 percent will be implemented through the next four years.

For comparison, the residential rate for less than 4,000 gallons of water consumed was $57.04 for FY 2022-2023. Under the proposal in FY 2024-2025 this would increase to $58.76. The commercial rate for similar consumption in FY 2022 to 2024 was $90.12 and would increase to $92.82 in FY 2023-2024.

David Broyles may be reached at 276-779-4013 or on “X” at Carroll News Dave