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Purcellville council gives staff direction to fund three critical utility projects from cash, seeks reimbursement option
Summary
At a work session, Purcellville town council directed staff via nonbinding straw polls to proceed with funding a new water tank, wastewater screens and the Well 6F waterline from reserves now — with a reimbursement-resolution option to borrow later — and requested detailed rate modeling and bond-advisor input next week.
Purcellville’s town council signaled its support Monday night for funding three utility projects from the town’s cash reserves while preparing a mechanism to borrow later if needed. In a nonbinding straw poll, councilors directed staff to include a $983,000 elevated water tank, replacement of wastewater plant core and fine screens, and the Well 6F waterline in the town’s capital improvement plan and to prepare a reimbursement resolution that would preserve the option to issue debt later.
Town Manager (unnamed) told the council the choice was between taking a loan now or using cash on hand to move the work forward quickly and “do a reimbursement loan if council so chooses to replenish the cash reserve.” The manager added that the three projects are “mission critical” and that funding them from reserves would ensure timely completion to meet project deadlines, including a December 2026 completion target for the tank.
Why it matters: Staff said using cash now reduces the time needed to start construction, while later adopting a reimbursement resolution would allow the town to borrow to restore reserves without delaying urgent work. Finance staff warned the withdrawals would lower utility fund cash levels: water reserves would fall to about 88% of policy and wastewater to roughly 62%. Council asked staff to get advice from its financial advisor on whether dropping below policy targets would harm the town’s bond rating.
Council debate centered on speed versus fiscal prudence. The town’s operations lead, Jason, described operational pressures that make speed important: with several wells offline and drought conditions developing, bringing Well 6F online would add an estimated 100,000 (units) of yield and relieve day-to-day supply constraints. He said the fine and core screens protect downstream membrane filters and that continuing manual work was a safety concern. “We would like to have that pipe in the ground now,” Jason said.
Several council members pressed for a loan instead of drawing reserves, arguing that repeatedly deferring projects had driven costs higher and that financing now would preserve reserves and potentially secure better pricing while the town retains its AAA borrowing position. One councilor urged: “We should be looking at doing this loan… We cannot continue to kick these items down to the next fiscal year.” Others replied that cash is available today and that using it, then preparing a reimbursement resolution, would avoid incurring immediate new debt service and allow projects to proceed.
Staff cautioned the council about legal and timing constraints for reimbursement resolutions and tax-exempt bond rules, saying the town must coordinate with bond counsel and the financial advisor. The council emphasized that it wanted the rate-modeling firm Stantec and the financial advisor Davenport to present next week so the body could see how cash funding versus new debt would affect utility rates and credit considerations.
The straw-poll motion to accept the water and wastewater CIP changes as presented passed as nonbinding direction to staff. Members also approved a separate straw poll to prepare a reimbursement-resolution framework so the town can preserve the right to reimburse cash expenditures with a future borrowing if council approves it. Staff characterized both outcomes as preparatory steps—“you really aren’t adopting anything tonight,” a staff member said—but said they will use the direction when running rate models for the upcoming presentation.
What happens next: Stantec will present utility-rate modeling next week built on the CIP direction the council provided; Davenport will be asked to advise on credit implications. Staff said they will bring more precise accounting for the Mayfair proffers, ARPA interest and reserve balances, and will draft a reimbursement-resolution template for council review. Councilors also asked staff to model a modest utility-rate increase scenario (for example, 3%) to show impacts on rates and reserve rebuilding.
Meeting note: The discussion was a council work session and produced nonbinding straw polls and directions; no formal binding loan or ordinance was adopted tonight.
