Who is the Washington County Service Authority?

WCSA’s Revenues and Expenses

 

Revenues

WCSA is almost exclusively funded through the sale of its water and sewer services (connection and monthly user fees). Other than an occasional grant, WCSA receives no outside financial support. WCSA often obtains low-interest loans from governmental agencies such as Rural Development or the Virginia Department of Health, but these loans must be repaid with money earned through the sale of services by WCSA. Water and sewer connection and monthly user fees (revenues) pay all WCSA expenses.


Expenses 

WCSA expenses (revenue requirements) can be placed under two headings: (1) growth-related and (2) non-growth-related. These revenue requirements are outlined as follows:

Growth-related revenue requirements are capital projects that add capacity to the water and sewer system or service extensions. These projects facilitate residential, commercial and industrial growth in Washington County. 

Non-growth-related revenue requirements are capital projects related to replacement of the existing water and sewer systems and the operation and maintenance of the existing water and sewer system. The replacement, operation and maintenance of the water and sewer systems ensure that existing customers’ needs are met.

Our annual operating budget is approximately $10 million. For this reason, WCSA commits itself to continuous improvement. This not only involves regular internal analysis of cost-saving measures, but periodically submitting ourselves to review by outside firms to identify measures that will save money but not compromise quality.


Capital Projects 

Since 1996, WCSA has completed or is working on more than 200 projects costing $95.94 million. Of the $95.94 million, approximately $59.8 million has been growth related, and $36.1 million has been non-growth related. From 1996 to 2006, WCSA completed $37.17 million worth of capital projects. From 2007 to October 2012 (six years), WCSA began or completed $58.77 million in capital projects, of which $8.19 million was in grant and the remaining $50.58 million was loan.


Rates 

How WCSA is funded, capital projects, operation and maintenance all come together in our rates, fees and charges (what we charge for the services we provide). There are different ways to structure rates. For example, a utility with little water/sewer capacity, and limited ability to obtain more, may implement rates to compel water conservation. This is not the WCSA method. 

Another structure is what we think of as the traditional model, where essentially all of the revenue requirements are paid for by way of monthly user fees and not through connection fees. This model is much like paying taxes: Everyone pays taxes but not everyone consumes all the services for which our tax dollars are used. This approach has been around for many years. This is not the WCSA method.

A different rate structure is one that allocates cost only to those who are consuming the services. For example, if you are a current customer, you pay only for the cost to operate, maintain and replace the existing system (non-growth cost). If you are not an existing customer but wish to purchase a new water/sewer connection, then you pay for the cost to expand the system comparable with the volume you plan to use. This approach began in the 1970s and has grown in popularity because it allocates costs to those who are consuming the services, rather than one group subsidizing another, and it provides financial stability. Additionally, it keeps monthly user rates lower. To keep monthly user fees low, to ensure revenue is available for improvement projects and to accomplish general equity, WCSA’s rate structure relies more on this philosophy than on the traditional model. Currently, 5 percent of your monthly water and 25 percent of your sewer bill are related to growth-related costs. There are other methodologies and variations, but WCSA has operated on the philosophy that a blend of the traditional and growth-paying-for-growth approach is best for WCSA.

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