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Frederick Water outlines $119M 10-year CIP, reserve draw and project timeline
Summary
Frederick Water executive director Eric Lawrence told the Board of Supervisors the authority will pull $43 million from reserves to fund prioritized projects, is planning a $119 million 10-year CIP with long-term sewer needs near $281 million, and prefers self-funding over new bonds to avoid high interest costs.
Eric Lawrence, executive director of Frederick Water, told the Frederick County Board of Supervisors that the authority is moving to fund a large slate of capital projects from reserves and targeted revenues rather than new bonds.
"We're actually an authority," Lawrence said, framing Frederick Water's status under the Virginia Water and Waste Authorities Act and distinguishing it from public utility companies regulated by the State Corporation Commission. He said the authority serves roughly 18,009 connections and about 50,000 people and emphasized the principle that "growth pays for growth," relying on developer availability fees and customer rates to fund expansion.
Lawrence presented the authority's FY25 budget and capital-improvement program (CIP), which he said includes roughly $51 million in capital spending this fiscal year and a 10-year CIP that totals about $119 million. He said Frederick Water's sanitary sewer master plan identifies an additional $172 million in needed improvements in the 10'15 year window and a 30-year sewer need approaching $281 million.
To limit interest expense, Lawrence said the authority plans to draw reserves in the short term rather than issue new revenue bonds at current market rates: "Going to pull $43,000,000 from reserves," he said, adding that the authority's cash position (about $79'$80 million) aligns with its internal liquidity and debt-service targets of roughly $73'$78 million.
Lawrence described the authority's rate framework. New connections pay an availability fee that funds capital and system expansion; customers pay a base fee plus consumption charges (residential customers billed bimonthly). He noted a multi-year consumption-rate adjustment adopted in May 2022 that raised consumption charges 8 percent but, when combined with base fees, results in roughly a 2 percent annual increase in a typical monthly bill.
On water supply, Lawrence highlighted Frederick Water's quarry-based storage system: the authority currently operates seven quarries providing about 3 billion gallons of storage and expects to expand to about 4.7 billion gallons when the East Pit is ready. The new Salinski Water Treatment Plant (an 8 MGD membrane facility) is complete and awaiting pipeline tie-ins; Lawrence said he hopes the plant will be fully operational within a month of finishing connections.
Lawrence also described targeted plant upgrades and efficiency projects, including a break tank and pump improvements at the Deal (Stevens City) plant and a new half-million-gallon-per-day Lake Frederick treatment plant under construction adjacent to the Crooked Run site.
Why it matters: the combination of long-range CIP costs, permit-driven projects and recent inflationary pressure on materials and chemicals drove the authority's decision to use reserves and to revisit availability fees. Lawrence said the authority will continue pursuing grants and other partners to narrow funding gaps and will update the Board annually on CIP and fee assumptions.
Next steps: the Board signaled follow-up questions; Lawrence said the authority will deliver detailed financial materials to supervisors and revisit availability-fee assumptions in the coming year.
