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Board hears $17.15 million public-utility budget update and debt-service warning
Summary
County staff trimmed the FY26 public-utility budget, moved large capital items between years and warned that a proposed $13 million borrowing would increase rates or require a 4% revenue increase in FY27 to cover debt service.
New Kent County staff told the Board of Supervisors on April 14 that the proposed FY26 public-utility budget and capital-improvement plan (CIP) had been revised downward and that borrowing to cover capital projects would raise future debt-service costs.
Finance staff said the department reduced the recommended budget by $8,631,773 to a total budget including CIP of $17,153,643 after updated cost estimates and schedule changes from engineering consultants. Key changes include reducing the water-system interconnector Phase 1A from $7 million to $5.5 million and moving the Brickshire elevated storage tank into FY2027 and FY2028 as a two‑phase project with a total estimated cost of $10,250,000 (part of which may be recovered from developers). The Pamunkey River intake land-acquisition cost of $1,000,000 was moved into FY26, and the proposed solids-stabilization treatment plant schedule was adjusted.
Financial staff said bids for the solids-handling plant require the county to appropriate additional funds if the project is to be contracted in FY25; the board was advised that a borrowing of $13 million in FY26 would require a half-year interest payment of about $325,000 in FY26 and could require at least a 4% increase in rates or revenue in FY27 to support full-year debt service.
"If we borrowed in FY '26, the impact in FY '27 would require another 4% increase at minimum just to maintain or just to support that debt," the county's finance officer said during the presentation. Public-utility staff also reported operating-line reductions of about $253,000 after departmental review, and noted personnel adjustments including health-insurance changes and a restored part-time accreditation position for the sheriff's office (funded from the general fund adjustments referenced elsewhere in the meeting).
Board members asked whether the Brickshire tank could be completed in one year with developer participation; staff responded the engineers advised a two‑year phased approach would better match scope and site prep. Several supervisors expressed concern about taking on more debt, noting higher construction costs and the potential for larger rate increases if borrowing proceeds.
Staff said more detailed CIP and financing options will be brought to the May work session, and that the solids-handling appropriation will be presented separately when public-hearing timelines are met.
Quotes used here come from county finance and public-utility staff during the April 14 work session presentation.
