Caroline County to seek public comment on proposed 5% water and sewer rate increases and Dawn system fee change

Caroline County supervisors voted May 13 to send an updated water and sewer rate proposal to public hearing that would raise customer rates and availability fees while removing a general fund transfer to the utility fund.

The county-contracted consultant from Davenport Company recommended continuing 5% annual user-rate increases for 2026–2029 and increasing residential availability fees so each new connection would pay $14,000 for water and sewer combined. The consultant said those changes, paired with the county’s projection of 225 new customers per year, would allow the utility to cover recurring costs and fund about $1.3 million a year in cash-funded capital without drawing on the general fund.

The board’s decision matters because county staff told supervisors the projection is sensitive to new-connection volumes: if new connections fall well below 225 per year the system could need larger rate increases or debt financing to complete planned capital projects. The consultant identified two large capital projects — a Rappahannock River water treatment facility and the Polecat Creek interceptor — that could require about $9 million in borrowing if the new-connection revenue does not materialize.

Key details from the presentation

- Recommended recurring user-rate increases: 5% per year (proposal covers 2026–2029 for formal action). - Proposed residential availability fee: water + sewer = $14,000 per new connection (water +$1,026; sewer +$1,500 in the proposal). - New-connections assumption: 225 per year (county staff said year-to-date connections were about 212). - Cash-funded recurring capital: roughly $1,300,000 per year under the 225-connections assumption; lower connections would push the county toward debt financing. - Potential debt: $9 million identified for two major projects (Rappahannock River project in 2026 and Polecat Creek interceptor in 2027) in the consultant’s case that assumes borrowing for those projects.

Dawn (small rural) sewer system

The presentation also separated the Dawn decentralized system from the county’s larger utility fund. Davenport outlined four cases for Dawn: (1) a modest $1/month increase per customer (roughly a 3% increase), (2) an intermediate case, (3) a roughly $4–$5/month case, and (4) a higher-impact case that would be about $10/month and would fully eliminate the current general-fund transfer while funding depreciation. Staff noted Dawn historically has required a modest annual general-fund transfer (driven largely by debt service) and that the system will roll off most debt service in 2027. Dawn customers pay an availability fee (about $3,200) and the actual on-site connection charge is billed at cost (staff said typical total connection costs can run roughly $15,000–$18,000 when road bores are required).

What the board decided

The board authorized staff to take the consultant’s recommended “case 1” option to public hearing: 5% annual increases for the county water and sewer system and the smaller $1/month increase case for the Dawn system. Supervisors then clarified they wanted to advertise a 5% increase “across the board” for public hearing. The county will hold the required public hearings before any rates take effect.

What officials and staff said

A Davenport Company representative said, “we’re gonna recommend to continue moving forward with the 5% user rate increases,” and cautioned that the plan depends on new connections coming online.

County utilities staff explained technical and operational items: the Dawn system uses concrete tanks and individual pumps at houses; the county has replaced many small pumps with higher-capacity pumps over recent years and now plans to treat pump replacements as a recurring maintenance cost rather than an emergency repair cycle. Utilities director Chris Schiebel described water-quality mitigation on the county system: “We’ve installed green sand filters at all of our well sites, that have iron and manganese issues,” and added that hardness in groundwater remains an outstanding issue without a centralized water treatment plant.

Why this matters

If the projected new connections and availability-fee revenue arrive, the county could avoid a general-fund transfer to utilities while funding modest recurring capital by cash. If those connections fall short, residents could face higher annual rate increases or the county could incur debt to fund planned projects. The proposed availability-fee increase shifts more one-time costs toward new development rather than existing customers, but availability fees are “one‑time” revenue and can’t substitute for recurring operating revenue.

Next steps

Staff will advertise the proposed rates and take the options to public hearing. Supervisors said they expect to revisit the plan annually and adjust if connection volumes or capital needs change.