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Consultants tell Manassas Park council water and sewer funds face large shortfalls; recommend alternative, tiered rate design
Summary
Outside consultants told the Manassas Park governing body the city faces projected revenue shortfalls that could require roughly 41% increase in water revenues and 22% in sewer revenues in FY2027 under the current rate design; they recommended a meter-size fixed charge and tiered residential volumetric rates to protect small users. No rate change was approved tonight.
Nick Short and Connor Rodriguez of NewGen Strategies and Solutions told the Manassas Park governing body on June 16 that wholesale water and wastewater costs — which the consultants estimated at roughly 35% of water costs and 57% of sewer costs — are the primary drivers of the utilities’ projected shortfalls.
"Revenue sufficiency is really, really important," Nick Short said, explaining the team’s assumptions and the need to fund operating expenses and reserves. Connor Rodriguez presented the financial projections, saying the city’s current revenue path would require a 41% increase in water revenue in FY2027 followed by annual adjustments of about 3%, and a 22% increase for sewer in FY2027 under the current rate design.
The consultants emphasized alternatives. "The alternative rate design keeps a monthly service charge but varies it by meter size and establishes a lifeline tier for residential usage," Rodriguez said. Under the alternative the group modeled, the median residential customer would see a much smaller increase in the combined water and sewer bill (about 4% under the alternative versus about 28% under the current design in the consultants’ example).
Consultants also called attention to the city’s $2,000,000 annual transfer from the utilities to the general fund. Rodriguez said two high‑level indirect‑cost allocation approaches produced estimated defensible transfers of about $800,000 to $1,300,000, suggesting Manassas Park could plausibly reduce the transfer by roughly $650,000 to $1,200,000 depending on a full indirect‑cost study.
Council members asked for more detail and alternatives. "Is there a way that we could have phased increases instead of doing year-over-year?" Council member (Speaker 5) asked. The consultants said scenarios with phased increases can be run and noted they had modeled a two‑year scenario that would smooth impacts.
Council member (Speaker 15) pressed on structural drivers and whether wholesale costs were the main cause of the deficit; Rodriguez answered that wholesale provider charges and recent wholesale increases were the key factor. Council members also asked for lists of comparable jurisdictions, more history on capital projects that create year‑to‑year spikes, and a count of large commercial customers so the council can assess potential bill impacts on those accounts.
City staff and consultants repeatedly stressed the presentation was informational. "This is just a presentation today. There's no action today," the chair said. City manager (Speaker 14) and staff later told the body they will follow up on the council’s remaining questions, including whether midyear rate adjustments are allowed and providing additional data on commercial customers and capital‑improvement timing.
Next steps: staff will gather the requested details, run additional scenarios at the council’s direction and report back; any formal rate changes would require subsequent public notice and council action.
