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Lexington council approves memorandum with VMI to install master water meter; city to pursue rate study
Summary
City council approved a memorandum of understanding with the Virginia Military Institute to place a master meter on VMI's water supply, a move the city says will reduce unaccounted-for water loss and increase billed revenue from major institutional customers while a new water-rate study is completed.
Lexington City Council voted unanimously, 5–0 (one member recused), to approve a memorandum of understanding with the Virginia Military Institute on a plan to install a master water meter that will measure all water entering VMI's campus.
City Manager introduced the memorandum, saying VMI is the city’s largest water customer and that the master meter will help reduce unaccounted-for water loss and align billing with actual consumption. The city manager said VMI uses roughly 20% of the city’s water and Washington & Lee about 16% and noted the two institutions would shoulder higher bills under master-meter accounting while the city moves to soften the effect through a rate change and a planned rate study.
The memorandum mirrors an earlier agreement with Washington & Lee and includes three city commitments: complete a comprehensive water-rate study (targeted in the fiscal-year 2027 window), provide up to $15,000 a year through fiscal year 2030 to assist with water breaks on campus, and pursue an ordinance to reduce the city’s tier-3 water rate to equal tier 2. The city manager said the practical effect will be to make tier 3 equal to tier 2 while leaving the tier structure in place pending the rate study.
Council members thanked city staff and VMI representatives for nearly a decade of negotiations. The manager presented estimates that, under master-meter billing, VMI would pay roughly an additional $400,000 annually and Washington & Lee about $330,000 annually compared with prior billing practices; staff said those amounts reflect capturing previously unbilled water rather than imposing a new charge on the institutions’ historic, metered consumption.
Colonel Jeff Bhubar of VMI and staff described ongoing technical coordination. The manager said the board of visitors at VMI will review the MOU at an upcoming February meeting; the council’s approval sends the item to VMI next and leaves future ordinance changes and the rate study to the council for later votes.
Council recorded the motion as approved by roll call: Betts (aye), Smith (aye), Strong (aye), Driscoll (aye), Alexander (aye). Councilor Ziegler declared a conflict and stepped down from the discussion and vote.
The council manager also said the city will continue to permit and encourage facility-level meters on campus (VMI maintains many internal facility meters) so the institute can track consumption and target leak detection. Staff estimated VMI’s unaccounted-for loss at about 3–5% of its campus consumption — roughly the equivalent of several swimming pools annually — and noted that the American Water Works Association considers utilities with under 10% loss to be operating at a high standard.
The memorandum is intended to be a framework; implementation steps (ordinance language to change tier rates, the timing of the rate study and the precise meter installation schedule) will come back to council for specific actions.
Councilors said the MOU is intended to align incentives: by billing the institution for the water actually delivered to campus, both parties will have clearer data to find and fix leaks and reduce system-wide losses.
City staff and VMI will continue technical work and follow the schedule the MOU describes. The council approved the MOU by roll call with Ziegler recused; no amendments were made during the meeting.
