Town and Inn find common ground on wastewater controversy — for now

Washington’s wastewater battle eased into a truce Monday evening, with the Town Council agreeing unanimously to chop its proposed water and sewage rate increase to 11 percent from 25 percent, and to hold the reduced hike in abeyance until a year-end review confirms that higher rates are necessary. 

The compromise concludes a tense face-off between the Town Council — unnerved by continuing financial losses in the wastewater system — and the Inn at Little Washington — which balked at the prospect of a rate increase that would add about $36,000 a year to an already large set of transfers it makes to the town. 

The durability of the peace settlement rests on two hopeful expectations: 

• That the recently enacted $1.9 trillion American Rescue Plan will translate into financial assistance for local governments, businesses and infrastructures, and that the town of Washington will get a slice of the federal relief monies.

• That the town of Washington will realize gains from a slew of new investments and structures. Additions to Washington’s modest grid include: the new Post Office, opening this summer; a cafe to be launched by the Inn; and a new food operation in the building that houses the shuttered Tula’s restaurant. In the wings are Chuck Akre’s proposed Rush River Commons, a mixed-use project that would include 10 to 20 rental housing units; and several expansion projects for the Inn, including up to 20 new rooms, plus an event space. 

Council Member Joe Whited, who, together with Town Treasurer Gail Swift, spotlighted the wastewater plant’s continuing losses, said in an interview that if both sets of expectations materialize, “we could be staring at a very different financial situation” at the November Town Council meeting, when decision-makers will revisit the rate increases, the first in five years.  

The motion adopted Monday night stipulates that any monies coming to Washington under the American Rescue Act be used solely to “address the budget shortfalls of the Washington Water Works and Wastewater Treatment Plant.” The 11-percent rate hikes are slated to take effect in January, but will require a second vote by the Council in its November meeting. The most acute problems center on the wastewater operation, with the water system generally covering its costs. 

The Council also agreed to create a Public Works Committee responsible for “active oversight“ of the Washington Water Works and the Wastewater Treatment Plant, reporting to the Council each month. Whited and Council member Brad Schneider will be the first members on the committee. The new panel will immediately meet with managers of the Rappahannock Sewer and Water Authority to explore collaborations and synergies that might result in savings and efficiencies for both operations.  Mayor Fred Catlin pointed out that when the Council makes its decision on the rate increases, “we’ll have reports from the public works committee” to inform the discussion.  

During Monday’s session, the Inn’s Chef/Proprietor Patrick O’Connell, a member of the Town Council, suggested setting a specific financial threshold, such as $50,000 in additional town revenue, above which the rate increases would be tossed out. But Whited insisted on a thorough review of the revenues and expenses before making any decision on the January rate hike, a position that Council members, including O’Connell, ultimately accepted.  

The financial strains surrounding the wastewater system — a state-of-the-art investment made a decade ago — won’t evaporate, even if increased tax revenues for Washington ease the current anxieties. The system is stressed by three sets of challenges:

• Wastewater fees that users pay tend to fall short of expenses by about $75,000 a year. For the fiscal year ending in June, the gap will be about $100,000.

• Maintenance costs are high: 110 water meters need to be replaced, at an estimated cost of $300,000; tanks need sandblasting and repainting; pumps in sewage grinder pots require attention.

• Debt obligations for the wastewater plant require payments from the town general fund of $198,000 a year for the next decade. The water system bonds cost the town $24,000 a year. 

One of the worrisome aspects of the financial strains is that as the wastewater losses build up, the town draws down its cash reserves, which exceeded $375,000 in 2018, but have slid to $253,000 currently.  

When the Council convenes to consider the rates in November, it will have data it lacks today, including the extent and strength of the rebound from the pandemic year; the funds flowing from the American Rescue Plan; the Inn’s summer and fall revenues; and emerging details on the Rush River Commons.   

Former Mayor John Fox Sullivan said in an interview that the current indicators suggest more robust revenue flows for the town’s water infrastructure. “If you look at the big picture, you’ve got the Inn doing extremely well,” he noted. “You’ve got a cafe’ project to come on in December, you’ve got a new Tula’s sometime in the second half of this year; houses and properties are generally being bought up.”  The mixed-use Rush River Commons Project — particularly the component of rental housing units — promises new connection fees and usage payments. The recently redefined project will be the subject of Planning Commission and Town Council hearings starting in coming weeks. 

One result of the wastewater fracas will likely be a freer flow of information between the financially intertwined town and Inn. The famous culinary destination will need to pay closer attention to the town’s finances, particularly those associated with its grittiest activities, the treatment of waste and sludge. The town, in turn, will need to track growth projections for its largest taxpayer, since these hold the key to the town’s own finances.

By Tim Carrington — For Foothills Forum 

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