Exmore Budget Balanced, Town Manager Warns of Need for Careful Management

0
34

By Stefanie Jackson – The Exmore Town Council approved the town’s fiscal year 2022 budget of more than $2 million June 7.

Town Manager Robert Duer called it “the toughest budget I’ve done, because we’re really shooting in the dark” regarding many of Exmore’s expenses in the coming fiscal year.

“The cost of materials, the cost of gas, the cost of everything keeps going sky high,” and the budget was written primarily in December, Duer noted.

But the budget is balanced and if the town continues to manage spending as it has throughout the COVID-19 pandemic, “we’ll be fine,” he said.

The Hampton Roads Sanitation District (HRSD) has released its rate schedule for FY 2022, which was published as a legal ad in the Eastern Shore Post June 4.

(HRSD does not yet serve the Eastern Shore, but Duer said the groundbreaking for a force main to be installed near Route 13 may occur in July.)

The rate for Accomack (and Northampton) is $14.28 for every 1,000 gallons of wastewater collected and treated – the same rate as small Virginia communities across the bay, such as Surry.

Surry’s FY 2020 rate of $13.43 increased 85 cents, or about 6%. HRSD did not increase its rates in FY 2021 due to COVID-19.

The rate of $13.43 per 1,000 gallons of wastewater included $5.60 for collection and $7.83 for treatment.

Through negotiations with HRSD, Duer was able to get Exmore’s wastewater treatment costs cut roughly in half – $3.55 per 1,000 gallons.

HRSD calls this its “wholesale” treatment rate, available only to a town that “does not use all HRSD facilities or need all of the services provided to a typical customer,” according to HRSD’s full rate schedule for FY 2022.

Only towns that are incorporated and have a population of less than 2,000 qualify for the wholesale rate.

Exmore also negotiated with HRSD to allow the town to control sewer rates and bill customers. Exmore plans to beat HRSD’s rates by 50% or more to make sewer service more affordable for customers, but the same inflation that created uncertainty regarding the town’s FY 2022 budget is also casting a shadow over plans to keep sewer rates low.

Exmore will completely rebuild and expand its wastewater collection system, but the sewer project that had a potential price tag of $7 million will likely cost between $12 million and $14 million now, Duer said.

The worst case scenario Duer posed to Exmore’s town council was that the difference between the town’s debt service on the sewer system and the revenue the town receives from providing sewer service could be an annual shortfall of $300,000.

Duer advised council members that they could be faced with “hard decisions” about how much money the town borrows for the sewer project, but he also told them, “don’t panic.”

No matter what, “we will not compromise the system like it was done last time,” Duer said. The current sewer system is “junk” and no old sewer lines will be used; all new pipes will be installed.

“We’re going to do it right,” Duer said.

Vice Mayor Thomas Lewis agreed. “When we go down this road, we’re going Cadillac style,” he said.

Exmore has about $15.4 million in potential sewer project funding lined up so far.

The town received a $10 million loan offer including $3 million in loan forgiveness from the Virginia Department of Environmental Quality. The $7 million loan balance would be repaid at 0.05% interest for 40 years, or $193,000 a year.

The town plans to borrow $2 million from the U.S. Department of Agriculture, to be repaid at 2% interest for 30 years, or $88,800 a year.

Exmore plans to contribute $2 million in savings and about $1.4 million in American Rescue Plan funding.

The town also could receive a grant of up to $1 million from the Virginia Department of Housing and Community Development, and Exmore officials will meet with a representative of Congresswoman Elaine Luria’s office about the town possibly receiving federal funding for the sewer project.

The Town Council held a public hearing regarding the conveyance of town property – two parcels on Carolyn Avenue – to HRSD to build a pump station for the sewer system.

No one spoke during the hearing, and the council voted unanimously to give away the two parcels, which cannot be developed.

Another public hearing was held on the potential sale of town property – a lot on Bluejay Lane. No one spoke at that hearing, and the Town Council voted unanimously to proceed with the sale, contingent upon the town attorney’s approval.

Duer noted the town has no use for the Bluejay Lane property, which already has the interest of a buyer, whose name Duer did no