To offset a potential 32.5 percent increase in Tidewater Utility’s water rates and a miscalculation in the number of properties included in the town’s water service area, Ocean View officials this week presented a plan that could increase water fees charged to water system customers by 25 percent.
Town Manager Conway Gregory said that, while the figure of 950 properties was originally used in calculations to come up with fee amounts designed to cover the system costs – given to the town by an outside consulting firm, he noted, and not their regular engineering consulting firm – 919 is closer to the actual number.
Of the 919 properties, 695 are properties with water meters and 224 are unimproved lots. Of the 695 metered properties, 546 applications to connect to the system have been received (477 of those have been installed) and 149 – 21 percent – still have applications outstanding, despite a requirement that they be connected to the system by March 1 or face additional fees. Of the 224 unimproved lots, 45 – 20 percent – have not paid the quarterly service availability charge.
To run the water system, which under the town’s USDA loan must run as its own entity, it costs the town $293,000 per year. Some 82 percent of that cost is designed to repay a fixed note over 40 years and about 7 percent is for a service agreement through Tidewater for five years. So, for the next five years at least, 90 percent of those costs are fixed.
But costs were more than budgeted and revenues were less, since a significant portion of landowners have either not paid, paid partially or are not connected yet. That means that, since March 1 was the deadline, the town has a $55,000 deficit for the system for its first year of operation.
In order to recoup that money, Finance Director Lee Brubaker built the $55,000 into coming year’s proposed budget. That’s where the increase comes in, since recouping that amount would mean an increase to the flat water fees to about $98 per quarter instead of the current $78.
Those not complying could face legal action
In addition to raising rates, the town plans on “aggressively going after” those who haven’t paid at all or haven’t paid in full, Gregory said. When asked how they would go about doing that, he deferred to Town Solicitor Dennis Schrader.
At the March 7 hearing, Schrader first referenced an ordinance introduced by the town council a few months back, saying, “If you remember, back in December we had a reading of an ordinance on financial good standing.” The ordinance spelled out consequences for people who become delinquent with any town taxes or other monies owed.
However, later, in clarification, Schrader acknowledged that, in quoting that particular ordinance, he had misspoken. Discussion at the time of the ordinance’s introduction had focused on whether it would be implemented in cases where people owed the town money for water service.
During that first reading, local Realtor Kim Hook – who owns unimproved lots in the town and has challenged having to pay the quarterly service availability charge when her property is unimproved – had asked if not paying for water service would somehow affect other services, such as getting a business license. Resident Harvey Booth also questioned its timing, with the March 1 deadline to connect to the system looming.
Because of Hook’s request for clarification on the ordinance’s impact and her request to not “criss-cross” monies owed with things such as obtaining licenses unrelated to building, the town added modified a separate ordinance on collections to state that nonpayment of water bills would not affect getting a business license.
Despite that clarification, Schrader emphasized Saturday that the town does have the authority to enforce payment and/or connection, the ordinance on financial good standing not withstanding.
Using its general powers set out in Chapter 2-313 of the town charter and Chapter 213 of the water rates ordinance, he said, the town has the power to impose a lien on real property, can sue for non-payment at the Justice of the Peace Court and try to get a judgment lien on personal property; and, for people who have not connected, can sue in Court of the Chancery to get a mandatory injunction to force connection.
“As does any other governmental entity, we have the full powers set out in the charter. We are like any other debt collector,” emphasized Schrader.