Council majority votes to reduce utility connection fees

Town Manager Kim Callis opened a public hearing at the September Town Council meeting to address the proposed reduction in the water and sewer connection fees adopted as part of the Town’s fiscal year 22/23 budget. The proposed rate change will see the water hookup fee drop from $2000 to $1000 and the sewer hookup fee from $3000 to $1500.

Wade Crowder made the comment that the fee should have never been “jacked up anyway”.

Local business owner Gretchen Hayes spoke from the crowd asking Callis who was responsible for setting the minimum fee.

After being prompted from the Town Attorney, Mayor Marion asked Hayes to come to the microphone so that the live stream could hear her comments.

After first refusing to come forward, Hayes came to the microphone and asked Callis again who was responsible for setting the minimum fee.

“So who gets to decide? Because when we were told it was $5000 and then it was $6500 and I still don’t know what the extra $1500 was for. So who gets to decide what the fee is going to be? What determines that fee? Who decides the material cost?”

Callis answered that the minimum standard fee is based on a standard residential two-inch connection for water and sewer but his statement was corrected to ¾ inch connection hook up.

“If it’s bigger like a two-inch then we have to figure the cost of the meter and the extra labor and all of that to go out there and people are informed of that. The staff will look at the cost of materials that can change day to day.”

Hayes agreed, “Yes it can. From hour to hour.” She continued, “Just look out for your people that are coming to this town to invest in it and say thank you for coming. Let us thank you for coming because we get personal property tax off your house, off your lot, off your cars. We get water and sewer hook up fees. The list goes on and on to your advantage.”

Bane Cameron spoke on two issues for Council to consider in regard to the water and sewer fee changes.

“In looking at the slide deck from the budget’s adoption, we see adjustments to not only the water and sewer hookup fees, no, most of the water supply and therefore the disposal rates also increased. Surely it would be inconsistent of Council to roll back connection fees without handling the other simultaneously changed fees in the same way. Whatever wish one may have about the communication of the budget in regard to hook up fees precisely the same communication occurred with regard to water service and disposal fees. Those changes affect thousands of households and businesses in and around South Hill. Nobody likes to pay more for the same service, yet the community does not seem to have difficulty in understanding and accepting this increase.”

He went on to say that he encouraged the Council to place great weight on “undisputed factors”.

“Factor one: the rates have not been increased for decades. Whether they could, should, or might have been implemented more gradually and more frequently, connections purchased last year were a steal at well-outdated levels. Factor two: the budget adoption process undertaken earlier this year by the town, the Council, and all interested parties, was proper, usual, and customary. If, for example, I did not attend the spring budget hearing, it is the fault or shortcoming of no one. Simply I chose not to engage, to offer input through a long well established order at the appropriate time.”

Cameron also stated that he did not believe that the current fees would hinder the development of a 160-unit business/building, as suggested by Hayes and other citizens.

He said that he was confident that any business would consider the relative benefits of locating its investment in South Hill.

“Were one person to come before the Council with a compelling, valid grievance, I would hope that the decision would be for justice. However, in a community of thousands, if Council entertains every self-interested petition from a handful of citizens would it move us forward as a community? As you look out into Council chambers this evening be reminded that thousands stayed home, not because of a rainstorm, but because they trust you to uphold a properly adopted budget. With no compelling reason to modify the budget in the contemplated regard, I encourage Council to maintain the adopted budget and its enacted fee structure.”

Gavin Honeycutt made the motion to approve the ten-month reduction to the current water and sewer connection fee as proposed by the Town Manager and staff. The motion was seconded by Mike Moody.

Anyone who has already paid the increased rate from July 1 until September 12 would not be entitled to a refund because it was paid based on the current rates before the vote to reduce the fee on Monday night.

Town Attorney Estes said, “You can’t really legislate retroactively so you would be legislating [the fee] moving forward.”

Shep Moss asked for further explanation in regards to Hayes’ question about who determines the fee amounts.

“The public works department does the calculation. C.J. Dean is the Director of Municipal Services and he will work with the Superintendents and they will look at the cost of the materials, the cost of the labor, and determine what the cost is if it’s not a non-standard meter.”

Moss asked, “So it’s not a cost plus a percentage? It’s just straight cost?”

Callis answered, “That’s right. Actually our fees are substantially lower even at the increased rates that they were, they are still substantially lower than the statewide average.”

Moss then asked if customers were provided with a receipt for the hookup materials so they can see where the cost/rate comes from.

“If they ask for it sure,” said Callis

Joseph Taylor asked if the Budget was properly advertised in the South Hill Enterprise, if the font was correct according to the Code of Virginia, if the Budget and Finance Committee met numerous times in preparation for both public hearings, and the adoption of the budget. Callis answered yes to all.

“Mr. Mayor the comments that I would make with respect to this with respect to my colleagues who have stated that we need to correct the budget or whether there is some redress. It’s already correct. It’s correct. The figures are correct. The contemplation of that figure was done deliberately with proper notice to the public. I am extremely concerned about the standard that will bite us in the future based on complaints that others may make with respect to the cost or the price affixed to taxation and fees. This was a budget process that was to the line and by the book, statutorily correct. We are setting a poor example today with respect to the budgeting process. It’s unwise. It’s impractical and sets us up for a massive problem moving forward with respect to other issues. For that reason I would move the other members to say no to the motion,” said Taylor.

Honeycutt stated that Taylor was incorrect in saying that the budget was gone over line by line. “I sat in on [the budget meetings] for four days and this particular line item was never brought up. It was never made mention of and again I am fault for not looking at the budget more closely and seeing those [increases] and I just don’t want that misinformation to be out there. I hope Councilman Moody would back me up on that.”

Honeycutt continued, “It goes back to me to these builders that had projects already projected for this year and to get that significant increase that they did not budget for. I felt like I was robbing them of money.”

Honeycutt added that it was not mentioned or brought to his attention until the June Council meeting when local business owner Bitty Freeman addressed Council with his comments.

Taylor said that he never stated that each line had been reviewed. “That’s not what I’m suggesting at all. I’m stating, as confirmed by the Town Manager, that the budget proposal line by line was listed properly to the budget that was presented to the public by a proper notice.”

Taylor suggested keeping the budget as is and addressing it in the “appropriate budget process beginning in January and February when it can go through again public hearing consideration by the budget committee, for what that’s worth, and then presentation to the Town Council”.

Mike Moody agreed that the budget was properly advertised and presented to the public by the book. “What we failed to do is notify the public of this increase. I knew it was in the budget. I saw it. I read it. We had discussed it two years ago in budget and finance. We did not discuss it during this past budget and finance meetings. We didn’t talk about it at all but I knew it was there. My thought process is that we would be unfair to the general public who relies upon the Council to let them know of any rate/fee increase that we are imposing. We did not do that verbally. Many people do not read the budget. It’s a very boring thing to read when you get down to it. It’s over 100 pages. They rely on us to tell them what was in the budget and we did not do it.”

Taylor was the only member of Council to vote against the motion. Effective September 12, water and sewer rates will return to $1000 for water hookup and $1500 for sewer hookup.

Another public hearing was held in regards to a proposed real property tax increase.

Finance Director Sheila Cutrell said a recent reassessment of real property values within the town increased by approximately 11%.

The Code of Virginia requires either a reduction in the rate of levy for the forthcoming year so as to cause such the rate of levy to produce no more than 101% of the previous year’s real property tax levies or holding a public hearing to implement an effective rate increase.

Town citizen Wade Crowder asked Cutrell to clarify what the public hearing was in regards to and whether or not the taxes would be increasing.

“We are talking about leaving the tax rate as it currently is at $.34 per one hundred.”

Crowder made no objections and no other citizen chose to speak on the matter.

Mike Moody said that the Budget and Finance Committee met on August 4 to discuss the real property tax rate and after “discussing several anticipated expenses that were not included in the fiscal year 2023 budget the committee unanimously agreed to maintaining the real property tax rate at $.34 per $100”.

Council also voted to sell the Roanoke River Service Authority (RRSA) its real property interests related to easements and properties needed for water distribution lines.

The lines extend south from a storage tank facility known as “Vault A” located just south of the boundary of the town. They continue south to Big Fork at the Highway 1 and Highway 58 intersection and then run west towards Boydton.

The sale will also include all water facilities connected to those distribution lines. All Town of South Hill water customers in these areas will now be served by the RRSA after the completion of the sale.