Board weighs 13% utility-rate proposal and $5.5M Main Street water project as staff model budget options
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Summary
Director of public utilities presented a revised FY27 utilities budget showing a proposed 13% rate increase and the addition of Main Street and Forest Hill Avenue projects that raise the utilities capital plan and long-term rate needs. Supervisors debated timing of advertising, alternatives (general-fund transfer, targeted fee increases, a utilities overlay), and asked staff to prepare additional revenue scenarios ahead of the budget adoption process.
Gloucester County’s director of public utilities, Katie Lehi, briefed the Board of Supervisors on March 26 on a revised FY27 utilities budget that includes a proposed 13% increase in monthly water and sewer usage rates, added capital projects such as Main Street, and schedule options for a public hearing.
Lehi told the board the revised proposed utilities budget is about $16,880,000, reflecting newly added projects and an estimated $935,000 revenue transfer from a proposed meals tax. She said the county has added a state dam-safety grant and that Main Street Phase 1 is now estimated at about $5.5 million; later phases were estimated at roughly $1.8 million and $1.7 million, respectively.
On revenue, Lehi presented options including the 13% usage-rate proposal, modest increases in application and development fees, transfers from the Development Fund and a potential meals-tax transfer. She said application and development fee increases would generate modest revenue (estimates in the transcript: low tens of thousands), and that, if the county fully funds the capital plan with rates alone, subsequent years could require additional large increases.
On timing, staff said rates must be advertised promptly to permit an April 16 or April 23 public hearing (or, if the board delays, a hearing on April 30 at the adoption meeting). Several supervisors urged waiting to advertise until the board resolves the meals-tax decision and the broader budget to avoid multiple notices. Lehi said she preferred advertising immediately to preserve a May 1 implementation date if the board elects that schedule.
Supervisors proposed alternatives and mitigations: targeting the minimum/non-user charge; creating a utilities overlay/tax district that spreads capital costs across parcels in the service area; raising select business-license tiers using a tiered (progressive) approach; and staging or reprioritizing capital projects to reduce near-term rate pressure. Dr. Lemming pressed the board to consider a utilities overlay and argued that unfunded depreciation must be addressed for long-term sustainability.
Staff presented the mechanics of the affordability modeling and said the utilities fund currently covers operating costs but that capital needs drive the deficit. The board discussed using the $1,000,000 fire-department contribution as a one-time reserve to ease early debt payments for the fire project and how that interacts with utility rates and the general budget. Staff also noted fund-balance considerations and carryovers from the schools.
The board did not adopt rates at the meeting. Members asked staff for further analysis of alternatives — including revised fee schedules, tiered business-license adjustments, and phased capital plans — and asked that staff bring clearer revenue numbers and the timing implications for advertising and hearings to upcoming budget work sessions.
Lehi said she will provide parcel counts, updated cost estimates for Main Street phases and revenue-impact spreadsheets at follow-up meetings.
