Gloucester County officials weigh steep water and sewer rate increases to fund aging system

Gloucester County officials on Feb. 4 outlined a plan to pay for $30 million-plus in water and sewer capital needs and agreed to hold a public hearing in April on a proposed 14% across‑the‑board rate increase.

At a work session, Trish Legg, Gloucester County utilities director, said the county budgeted $11,000,000 in FY25 revenue for utilities but now projects about $9,900,000 and has paused most capital projects to cover operating shortfalls. “We budgeted $11,000,000 and I am projecting 9,900,000.0,” Legg said.

Legg told supervisors the utilities fund has an unrestricted fund balance of $1,640,000 at the start of the year and she anticipates using about $1,612,000, leaving roughly $27,000. She said the FY25 budget had assumed using $1,300,000 of unrestricted fund balance; lower fee revenue forced deeper drawdowns and project pauses.

Why it matters: County water lines and pump stations are decades old in parts of Gloucester. Supervisors were told some mains date to the 1960s–70s, pump stations run through flood zones and collection lines tied to Pump Stations 11 and 13 need inspection and repair. Officials said those conditions pose operational and public‑safety risks and require multi‑year investment.

Legg presented three funding approaches: 1) cash‑fund the capital improvement plan using rate increases large enough to accumulate the cash (a modeled 55% revenue increase translating to an estimated 76% rate increase early in the plan); 2) borrow for the full capital plan (modeled as a lower near‑term rate jump, about 28% in year one and roughly 45% by year two in the presentation); and 3) a “reduced debt” hybrid that would borrow for most projects while applying projected development fees and excess fund balance to reduce borrowing (modeled as about a 28% increase by the end of year two under Legg’s assumptions). Legg said the reduced‑debt option assumes a conservative 10% growth in the development fund (the 10‑year average cited earlier in the presentation is 23%).

Legg outlined specific paused projects: water treatment plant motor control center and SCADA improvements, waterline design and replacement across Gloucester Point and other neighborhoods, lead service line inventory work required by EPA, and pump station construction and collection‑system repairs. She said design work for Pump Station 11 is largely complete; construction is included in the FY27 planning horizon and could cost about $1 million for upgrades with total pump station line projects running into the low millions.

On customer impacts, Legg noted most residential accounts are low‑consumption: 86% of accounts use 5,000 gallons or less monthly and 95% use 8,000 gallons or less. Under the modeled reduced‑debt scenario, a typical 5,000‑gallon household bill would rise from about $50.18 to roughly $64.65 in the near term; the cash‑funding scenario showed larger jumps.

Legal and policy context: Legg said the utility operates as an enterprise fund and the scenarios presented assume no general‑fund (real‑estate tax) subsidy. County counsel confirmed the existing ordinance restricts development‑fund uses to system expansion; supervisors may amend that ordinance if they choose to authorize broader uses of development funds.

Board reaction and next steps: Supervisors debated fairness between utility customers and nonusers who still rely on county services (for example, fire protection) and discussed whether to dedicate some general‑fund revenue to utilities. Several supervisors favored the reduced‑debt option as a balance between immediate customer impact and long‑term needs. The board voted to schedule a public hearing at its first April meeting on a 14% across‑the‑board rate increase, with an effective date in May if adopted. Roll call on that motion recorded several votes: Hudson (No), Smith (Yes), Krisco/Chrisgrove (Yes), Desai (No), McRaeyshev (Yes), Gibson (Yes). The motion passed.

Legg said she will return with more detailed rate ordinances, the Davenport financial model on request, and a public‑hearing schedule that county staff can advertise with the budget public hearings.

The board directed staff to prepare materials for a concurrent public hearing on rates and the FY26 budget so residents can review all proposals at the same meeting.