Amherst County Service Authority proposes 3.5% water and sewer rate increase; board keeps current health plan for 2025

The Amherst County Service Authority on May 6 voted to advertise a public hearing June 3 on proposed fiscal year 2026 rate and fee changes that would raise water and sewer rates by 3.5% and to keep the authority's current Key Advantage expanded employee health plan for this year.

Executive Director Mr. Costello told the board the budget presents operating revenues of roughly $5.4 million and expenditures that nearly match that total, leaving a small projected balance. He said the draft budget includes a proposed 3.5% rate increase for both water and sewer and a one-dollar increase in the water service charge and a two-dollar increase in the sewer service charge to correct a prior oversight. "The current the hundred cubic foot rate would go from $6.22 in water to $6.44. For sewer, it goes from $9.50 to $9.83," Costello said. He also explained the budget meets the 1.15 debt service coverage required by the authority's bond covenants and that the FY24 actual coverage was higher.

The board motion to authorize the executive director to advertise a public hearing on rates for June 3 passed on a voice vote; board members said "aye." Costello emphasized capital projects in the draft budget are dependent on external funding: EPA grants, VDH grant applications, ARPA funds from the county and potential gateway funding. "If indeed those funding applications are not awarded, they will not proceed until other board approved funding is established," he said.

During the budget discussion staff presented a proposal to switch the authority's Key Advantage expanded insurance to a Key Advantage high-deductible plan paired with health savings account (HSA) contributions. Costello said the draft budget provides a 3% cost-of-living increase for employees, a 1% merit pool and recommends moving to a high-deductible HSA option to reduce employee premium outlays while the authority increases its percentage contribution (from 65% toward family coverage to 90% under the proposal) and to seed employee HSAs with a one-time contribution. "This will result in significant premium savings for all of our employees," Costello said, estimating individual employees could save more than $2,500 a year and families as much as $9,900 in premium reductions, while the authority's overall projected health-costs would drop from about $347,000 to $282,000 under the high-deductible option, including a $2,500-per-employee kickoff contribution.

Employees and some board members raised strong concerns about higher deductibles and out-of-pocket exposure under the high-deductible plan. A longtime field employee who identified himself as recently hired from Nelson County said many employees were "scared to death" about how the plan would cover prescription costs and other care. "Some of us have . . . prescriptions that can be expensive without insurance. So that may automatically eat into the any money we would put in the HSA," the employee said. Board members repeatedly requested more time for staff to explain details to employees and for the board to collect employee feedback.

After discussion, a board member moved to keep the current Key Advantage expanded plan for this year and to revisit the high-deductible/HSA option in a future budget cycle so employees could be briefed and give input. The motion passed on a voice vote. Costello told the board he would proceed with the public-hearing advertisement for rates and continue working with the county administrator and others on memoranda of understanding and financing options for raw-water and gateway projects.

The board's next step is the advertised public hearing on June 3, when the authority will accept public comment on the proposed FY26 rate and fee adjustments. The authority's staff materials show additional work planned during the coming year including a full cost-of-service study to refine rate-derivation methods and continued funding and planning for capital projects if external grants and awards are received.