Hello, Middleburg! I am pleased and proud to announce that the Virginia Rural Water Association recently awarded its (small) Water System of the Year to the Town of Middleburg! Middleburg’s application cited the utility fund’s financial turnaround, implementing a professional rate model, capital improvements and the activities of our Utility and Wellhead Protect Advisory Committee. Martha Semmes and I plan a day trip to Roanoke to accept the award.
Since people routinely asked me, I will attempt to answer the question: “Why is water so expensive in Middleburg?
First, most people look at rates from large systems before they ask, such as Loudoun Water. A significant factor for Middleburg is our small size. Our utility has just under 500 customers. Middleburg has a utility with just over $15 million dollars in assets (undepreciated). Middleburg has done our best in the past decade, a decade and a half, to rectify problems from the past – at least three decades where too little was spent for maintenance and replacement. For example, as recently as 1999 when a water line burst, the utility had to turn-off water to the entire town. We did not have working valves!
The Town began to change this starting with a professional engineering study in 2003. Next Middleburg signed a contract to maintain our two water towers, which were starting to show maintenance needs. Middleburg then signed a Memorandum of Understanding (MOU) with the Salamander Resort. The MOU included replacing our old wastewater treatment plant with a state-of-the-art membrane system and added a second water treatment plant on Stonewall Avenue. Salamander built these facilities to Middleburg’s specifications. After inspections and certifications, Middleburg added the facilities to the water utility. Middleburg hired a company, Municipal & Financial Services Group (MFSG), to prepare a professional rate model. Middleburg updates this rate model yearly in the preparation of each annual budget with actual operations and maintenance cost data, annual capital improvements and annualized asset replacements (the model includes all major utility assets with the life expectancy for each item). We also contracted with Inboden Environmental Serves (IES) to provide professional maintenance and operation. This contract costs less than Middleburg was paying Loudoun water and IES provides much better service. Finally, our engineer, Bob Krallinger, agreed to join IES, the Town Administrator and me for monthly utility meetings to discuss and plan for water utility improvements. This work has contributed many improvements, such as improving our percentage of un-billed water (lost to leaks, et cetera) from about 50% in 2010 to 12% in 2016.
Recently, Middleburg replaced old-obsolete water lines on Washington Street with over 2,500 feet of new 12-inch water line and added 750 feet loop system to replace old lines on the eastern side of Town with low water pressure and poor water quality. Middleburg is in the process of contracting the replacement of the western sewage pump station, a project we expect to conclude in the next year. Middleburg is also planning to replace old and undersized water lines in Ridgeview. We anticipate coordinating this project with VDOT so that we replace the lines before they repave the streets.
Large utilities, such as Loudoun and Prince William have many thousands of times more customers than Middleburg, which cannot take advantage of their economies of scale, so I won’t try to compare them.
Oh, so how do water rates in Middleburg compare with small towns in western Loudoun? Minimum bi-monthly bills in Hamilton and Round Hill are less by about $25 to $30 per month. I cannot tell if those utility systems measure up to Middleburg’s level of maturity. Minimum bi-monthly bills in Purcellville, with a population over twelve times Middleburg’s (about 9,100 versus 700), has a minimum bi-monthly bill about two dollars less than Middleburg (about $60 versus $62) during 2016. Bills above 2,000 gallons are also cheaper in Purcellville than in Middleburg. In 2016 Middleburg water costs an additional $31.69 per 1,000 gallons (water and sewer) versus Purcellville’s additional $22.59, but this comparison only holds for up to 10.000 gallons (costs step up with increased consumption). None of these utilities use the same billing rules, so cost comparisons are difficult. That is why I estimated minimum bi-monthly bills for comparison.
Is there good news? Middleburg’s utility is becoming very mature. We can expect it to stabilize with rate increases mainly to just keep up with inflation (no more increases to repair end of useful life or foreseeable maintenance or operation issues. Middleburg’s fees already include all current and anticipated costs so our utility can provide the best possible service, at the fairest rates possible, prices I believe will be stable.
That is my opinion – what do you think?