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Loudoun Water Board of Directors Modifies Community System Rate Increase Proposal

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Defers Vote on Tiered Rate Structure, 2012 Rate Increase until February

During its January board meeting on January 12, Loudoun Water’s Board of Directors voted 9-0 to change a proposal to put in place a tiered rate structure and a three-year rate increase for developer-initiated water and wastewater systems, also known as Community Systems, to a one-year proposal covering only 2012. In a 6-2-1 vote, the board then chose to defer a vote on the 2012 rate structure and rate increase to its February meeting to be held February 9, 2012.

The amended one-year proposal also instructs Loudoun Water staff to research an alternate rate design that would “unbundle” the seven Community Systems and create separate rate structures for each one.  (Currently, all seven of the systems are bundled together, which means their expenditures are pooled together and they share the same rates.)  The board also asked staff to draft a community outreach program for future communications with the community systems.

Comments and questions received during the public comment period requested the board reconsider its proposal due to its financial impact and a perceived lack of transparency by Loudoun Water.  While all legal requirements for public notice were met, five workshops were held that were open to the public, and a detailed letter was sent to every Community System customer, the board determined that, as a courtesy to the customers, a summary document detailing the proposal should be made available to the public prior to a vote.

“The summary document will address a wide range of questions that have been posed to us,” said Loudoun Water Board Chairman Fred Jennings, who voted for the deferral. “It will not address every demand or question but it will provide meaningful transparency and a reasonable understanding of the process.  That is what we are working towards.”

“I’ve seen a lot of very good data that shows the need for this sort of action,” said Chuck Harris, a board member who voted against a deferral until February. “[Loudoun Water] staff has done a very good job of informing us over time, not willy-nilly and quick, such that I was comfortable, and still am with us, having rate increases for the community systems to meet both current and future needs.”

Loudoun Water General Manager Dale Hammes stated the summary document would be completed in the next 10 to 14 days.  It will be emailed and posted online for community system customers review prior to the February board meeting.  Information about the 2012 portion of the proposal remains on the Loudoun Water website, www.loudounwater.org.

The board also addressed public comment asking it to consider charging Community System customers under the same rate structure as customers in its Central System.  The board stated its current policy assigning a separate set of rates on community systems would not be revisited because it reflects the county’s current comprehensive plan and is a reasonable approach for all customers.

The board did state, as it dropped the 2013 and 2014 portions of rate increased proposal from consideration, that it would reconsider the policy that “bundles” all of the Community Systems under one rate and directed staff to look assigning individual rates to individual systems in the future.

“We need to fulfill our obligation in setting rates that recover appropriate costs.  There has been merit in comments that have been received about unbundling rates,” said Jennings. “If we exercise the 2012 rate, and not the 2013 and 2014 rates, we still will not recover our costs but at least it puts us on a path of some recovery.  It will afford staff an opportunity to continue to pursue both the transparency issue and provide the luxury of time to more thoroughly investigate the rate unbundling in a way that satisfies the board.”