ACSA Infrastructure and Financial Stability Grow with Development Activity

By Neil Williamson, President

FORUM WATCH EDITORIAL

As I sipped my coffee this morning (4/25), I was not surprised to read Brandon Shulleeta’s article in The Daily ProgressDEQ says sewage seepage must stop”.  Local officials have long been aware of the challenges the wastewater treatment system endures in heavy rain events due to infiltration of storm water into the sewers.

Clearly significant investments must be made in replacement infrastructure that have nothing to do with growth of the system yet the growth of the system is a significant part of paying for the solution.

Please let me explain.  

Last week (4/21), the Albemarle County Service Authority (ASCA) released its Fiscal Year 2012 operating and capital improvement budget.  For the second year in a row the proposed budget calls for no increase in monthly water and sewer rates to consumers but does include an increase to those wishing to “buy in” to the system.

In their Budget At a Glance – The ACSA states:

In light of the area’s current economic distress, our goals in the coming fiscal year are:

  • To meet anticipated operating and capital improvement expenses without increasing water and sewer volume charges, and to ensure that current operating expenses will be paid with current operating revenue; [emphasis in original –nw]
  • To increase new customer buy-in and connection fees due to large systems capital improvements, which maintains our policy of “growth paying for growth;” and
  • To maintain, to improve and to extend system infrastructure. 

Charlottesville Tomorrow’s   Daily Progress article accurately reported the Free Enterprise Forum’s position regarding the increase in connection fees

“The ACSA continues to make significant investment that is in many cases being paid for by the new development that needs these increases in capacity,” [Free Enterprise Forum President Neil] Williamson said. “This is example of development paying its way.”

However, he said the increases would make it harder for developers to offer affordable housing, as they will add the fees to the cost of each home.

“As connection fees rise over $11,000, you’re talking about that representing around 5 percent of the price of a $200,000 home,” Williamson said.

The Authority plans to spend $10.6 Million Dollars in capital improvements.  Based on the above statement, one would anticipate a significant number of the improvements would be related to increasing capacity for new growth but that is not the case consider the following chart distilled from ASCA Memorandum date April 15, 2011 from Director of Engineering Peter Gorham

Capital Project Cost
ACSA Facility Improvements – Building Renovations $112,000
Scottsville Streetscape Upgrades $40,000
Key West Water Main Replacement $335,000
Shoppers World Water Main Relocation $126,500
St. George’s Avenue/Buck Road Water Main Replacement $540,000
Ashcroft Water Improvements $162,000
Ashcroft Pump Station #1 $25,000
West Leigh Water Main Replacement Phase 2 $560,000
Jarman’s Gap Road Water Main Betterment $19,700
Berwick Road Water Main Replacement $390,000
Hardware Street Water Main Extension $392,800
Scottsville Phase 2 Sewer $115,000
Western Ridge – Foxchase Water Connection $54,700
Buckingham Circle Water Main Replacement $530,000
Brookway Drive Aerial Sewer Crossing Replacement $87,000
Oakhill Sewer Phase 1 $185,000
Crozet Drainage Basin Phase 2 Sewer Rehabilitation $141,000
Biscuit Run Drainage Basin SESS $252,000
North Fork Regional Pump Station (expanding capacity and decommissioning two existing stations) $5,558,800
Meadow Creek Drainage Basin Sewer Rehabilitation $283,600
Hollymead Water Main Replacement $160,000
Automatic Flushing Assemblies $60,000
SCADA System $364,500
Developer Participation/pipe upsizing $100,000

[Emphasis added-nw]

The Free Enterprise Forum applauds ACSA for recognizing and addressing its replacement infrastructure.  The majority of the 25 capital  projects listed in the FY2012 CIP are replacement or rehabilitation.   

While we agree the connection fees and system development fees seem to be accurately calculated (as far as we understand the formula), we also contend that these payments (coupled with the new customers brought online) actually pay more than for just their growth.   ACSA estimates that FY 2012 funds from buy in and connection fees is $2,924,158. 

In addition, we are concerned that the general public does not recognize the significant investment the development community makes in the creation of the infrastructure, beyond just the connection fees. 

In the budget message, ACSA Executive Director Gary O’Connell predicts further infrastructure investments and how the new customer fees will be used:

To provide clean and safe water and wastewater treatment, and to protect our natural environment and streams, we will need to continue to making major expenditures in order to meet these capital needs.  As the community grows, and development increases, we will see a continuing reliance on new connection fees paying for the growth and capacity needed by our water and sewer system. [emphasis added – nw]

So new connection fees will not only pay for growth but also capacity (note not added capacity, simply capacity).

It is clear, from our review of the proposed budget and CIP, ACSA will rely on growth to not only pay for the growth of the system  but also to help offset needed infrastructure replacement and repair.

So not only is new development area growth paying its way, it is adding ASCA consumers and new infrastructure thereby placing the ACSA in a stronger position for the future.

Such growth should be celebrated.

Respectfully Submitted,

Neil Williamson

—————————————————————

20070731williamson Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and Nelson County.  For more information visit the website www.freeenterpriseforum.org

 

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