City extends freeze on water, sewer rates

Published 8:08 pm Thursday, December 10, 2020

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The freeze on Suffolk’s water and sewer rate increases will continue until at least April.

The city said it can afford to defer the rate increases for an additional 90 days because of additional debt service savings after the refunding of existing utility fund debt.

“We went back, through the assistance of our financial advisors and the Virginia Resource Authority and we were able to refinance the 2015 VRA bonds that the utility funds had, the revenue bonds,” said Interim City Manager Al Moor at council’s Dec. 2 meeting, “and that provided a savings of over $400,000, approximately $433,000 for the current fiscal year.”

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Moor said the city would look at its revenue and expenses to determine the city’s financial picture and whether there would be any further rate deferrals.

“I’m real pleased that we’re getting an opportunity to expand on the water and sewer rate (deferral) until April,” said Councilman Roger Fawcett. “That, we started off, if you remember, back in COVID, to get that through when the budget started. That’s a real good thing for all our citizens to get a little more break, particularly with COVID now starting to ramp up a little bit.”

When council approved its $651 million 2021-2022 fiscal year budget back in May, it decided to defer several previously planned increases: a 26-cent increase in the water rate, from $9.71 to $9.97 per 748 gallons; a 27-cent increase to the sewer rate, from $7.27 to $7.54 per 748 gallons; and the $1.50 per month increase in the meter service charge. These were deferred for six months, costing the city $450,000, city Finance Director Tealen Hansen said at the time.

Non-departmental expenses were also reduced by the same amount to account for the shortfall of money due to the delay, she said, with that being done by lowering the amount of the bond interest expense previously budgeted, and using capitalized interest to fund it. The utility fund budget was just over $61 million when the budget passed.

Suffolk Public Utilities during the summer announced a program to provide help with water, sewer and wastewater charges for qualifying city residents who have experienced financial hardships due to employment impacts caused by the coronavirus pandemic.

Meanwhile, the freeze on the $3.95 per month refuse fee increase, from $21.30 to $25.25 per month, is set to expire at the end of this year. At the same time council agreed to the freezes on water and sewer rates, it delayed the refuse fee increase for six months.

Those costs increases for the more than 30,000 city households that receive trash and recycling services are due to increased disposal costs at the regional landfill as well as higher recycling costs.