Maintaining ‘status quo’ in land, utility swap

By Allison Brophy Champion

Published: October 1, 2008

“We have miles to go.”

So said former Culpeper Police Chief Dan Boring, town government consultant, at today’s meeting of the Town and County Interaction Committee.

He was talking about the multi-faceted, ongoing proposal for the town and county to form a regional water and sewer board — a.k.a. the Culpeper Service Authority — while concurrently expanding the town’s borders mostly in the Bus. 29 commercial corridor. It would be the biggest swap of land for public utilities in Culpeper’s history.

Town Council and the Board of Supervisors tentatively agreed to the concept in late July, but as they say, the devil is in the details, especially considering that the two governments have been talking about these issues for the better part of a decade.

At today’s meeting, Boring and County Administrator Frank Bossio presented a draft of the latest agreement they’ve been working on for the past two months.

It got mixed reactions from the elected officials, and nothing’s final yet.

Status quo

Both Bossio and Boring said an important goal of the final agreement was to maintain the status quo for town and county taxpayers and ratepayers.

“Neither side should be damaged,” Bossio said. “And if there is profit, both sides should profit.”
To that end, the newest proposal contains a provision for the town to continue to collect annual income from its water and sewer systems to the tune of $920,000 for the next 10 years.

This is money the Culpeper Service Authority would pay the town to cover shortfalls it expects to incur to provide services to the new town areas north, east and west of downtown.

What it means

While the town would certainly generate additional tax revenue from the estimated 81 businesses, 193 houses and 158 apartments it would absorb as part of the 1,900-acre boundary line adjustment, it feels it wouldn’t be enough to cover the cost of additional public works and police services to these areas. The town puts that cost at up to $1.35 million per year for the next five years, not counting $500,000 in start-up costs the first year.

The plan all along was that the county agrees to the boundary expansion in exchange for gaining access to the town’s $100 million water and sewer system.

The idea was that the town would generate enough new tax revenue in the new areas to offset lost utility income and the county — through the Culpeper Service Authority — could offer water and sewer to entities beyond its borders.

Eventually, as the business corridor grows, the town could generate enough new revenue to cover its expenses for services — or at least that’s the hope.

That’s why the agreement presented by Bossio and Boring today cuts off the $920,000 payment from the Culpeper Service Authority after a decade. If the town began to recoup its costs before the 10-year period ends, that allocation would be adjusted. “As growth begins to happen, this $920,000 goes down,” Bossio said.

Reactions

However, Supervisor Steve Nixon, one of two town representatives on the county board, was doubtful the Service Authority would generate enough money in its initial years to pay the town that much money.

“What everybody needs to keep in perspective is the town has realized unprecedented growth and a tremendous amount of money came into the town coffers,” he said of the millions of dollars in tap connection fees the town’s water and sewer systems earned in recent years.

“The Authority will not be able to generate any increases for many years,” added Nixon. “The economy is flat. That is what I am worried about.”

But town officials said the money would be there because the town’s systems already serve thousands of customers, depositing at least $900,000 in the general fund each year.

Culpeper Town Manager Jeff Muzzy, on the job for about three weeks, reiterated the goal of making both sides, town and county, even in the land for utility exchange.“The idea is to take all the assets and liabilities and put them in a new pot and make everything status quo so nobody gets hurt,” he said.

Without the $920,000 payment from the Authority, the town would be forced to raise taxes to cover its shortfalls, Boring said, adding that town is still taking a risk. That’s because the new town areas could fail to generate enough revenues to cover the cost of services even after 10 years, he said.

“In 10 years, it goes away,” Bossio added of the authority payment to the town, calling the provision, “a sunset clause.”

Supervisor Tom Underwood liked the idea. “I’m just one member, but I love the concept,” he said.

Mayor Pranas Rimeikis noted that the day’s meeting produced some good points. He urged the respective staffs, however, to not make any changes to the draft agreement before each elected body had an opportunity to confer on the proposal.

Boring and Bossio said they would create a joint report informing elected officials about recent progress on the matter, as presented at the Interaction Committee meeting.

“By the way, none of us know if any of this even legal yet,” Bossio said.

Other stuff

Today’s discussion also included proposed provisions in the pending town-county agreement for: using Lake Catalpa for recreational purposes, five-year increments for the town to request additional boundary line adjustments, phasing out the town’s current Business, Professional and Occupational License tax and reimbursing the county, upon the formation of the Service Authority, the $3.3 million it paid the town last year for 200 water and sewer tap connections.

Town Councilman Steve Jenkins was absent.

Allison Brophy Champion can be reached at 825-0771 ext. 101 or