Council approves large dollar transfers, expenditures in current budget

Commitment of reserves crucial to Town plans during COVID-19 emergency

At its second regular meeting of April on Monday evening, April 27, the Front Royal Town Council tackled numbers both big and small related to its existing Fiscal Year 2020 Budget.

Over $2.3 million of Enterprise Fund reserves, $1.31 million from the Water Utility reserve and $990,674 from the Sewer Utility reserve, were approved for two projects. Another $1.65 million was recommended cut from the current FY-2020 budget to provide contingency funding for possible shortfalls elsewhere in the budget.

Town Hall continues to be ground zero for tough budget decisions as the town council and staff navigates budget needs and budget shortfalls, current and coming. Royal Examiner Photos/Roger Bianchini

Those numbers include approval of $1,313,000 from Water Utility Fund reserves to Route 522 North Corridor redundant water line consultant CHA Consulting to pay for “Engineering Design Services, Construction Contract Administration, and Project Closeout/Operations and Maintenance Manuals” for the backup north corridor water line project. After hearing the only five publicly submitted comments in opposition to the redundant water line expenditure, none in favor, the council’s vote was 5-1 for approval, with only Letasha Thompson dissenting.

Those supporting the expenditure replied to the public criticism suggesting the work either be delayed during the COVID-19 crisis or that Dominion Power be forced to pay a higher contribution than the $3.5 million of the now-estimated cost of $11 million costs by referencing the project’s scope and history.

That scope includes assuring a backup water supply during a line break, not only to the Town’s largest water user Dominion Power but to all north corridor commercial center businesses, as well as to RSW Jail. A letter from Jail superintendent Russ Gilkison referencing a recent water line interruption that also disrupted the Jail’s vacuum-driven sewer system “that needs water at all times” was read into the record to illustrate the need for backup, not only to the regionally-electrical power supplying Dominion Power Plant.

It was previous delays by previous council’s that has driven up costs originally projected in the $5 million range in 2011 when Dominion agreed to the $3.5 million contributions to a project perhaps most crucial to them, several council members noted.

“That’s on us,” Councilman Gary Gillespie noted of the cost increase fueled by nearly a decade of “kicking the can” down the road as Vice-Mayor Sealock likes to term such delays on needed projects.

Above, at left a map of the Town’s existing water service and to right projected expansion of the system extending beyond town limits to the north. The system was expanded as part of the 1999 North Corridor Agreement fashioned to stimulate community economic development without annexation of the north corridor; below, a timetable of the Town’s consideration of a redundant water line to facilitate continued service in the face of a major water line break.

It was also pointed out that the Town faces possible liability litigation from all corridor businesses, including Dominion, for lost profits and damages from a water loss that could have been prevented by a redundant water line that has been on the Town’s drawing board for nine years.

So, the council’s majority consensus was that despite the current pandemic financial impacts, known or unknown, a known Town expense of about $8 million now is better than facing unknown liability litigation from potentially multiple corridor business entities were the existing line to suffer a major break.

And Councilman Meza noted that water utility projections indicate that eventually water revenue from those corridor businesses will cover the Town’s expenditure.

And if that wasn’t enough late fiscal year budget juggling in the age of pending COVID-19 pandemic revenue shortfalls, the Town approved another budget amendment authorizing the use of $990,674 from Sewer Utility Fund reserves to contract Hydrostructures LLC to utilize closed-circuit TV “investigation of approximately 147,956 linear feet of 12-inch and smaller sanitary sewer, approximately 54,633 linear feet of sanitary sewer larger than 12-inch, and approximately 1,452 laterals”.

That contract will help the Town move forward with state-mandated improvements to Inflow and Infiltration (I & I) Abatement aspects of the sewer system. That vote was unanimous. And with those improvements mandated, there was no public opposition expressed and much less council discussion of that unanimous approval.

And in its final BIG number action, the council also unanimously approved a budget amendment authorizing transfers of five pages of line items from General (non-Utility Enterprise) Fund reserves totaling $1,657,612 to provide contingency funds to cover potential shortfalls in the Water, Sewer, Solid Waste and General/Street Fund balances related to the COVID-19 pandemic economic impacts. Those reserves are earmarked to General Fund/Street Fund, $753,723; Water Fund, $620,866; Sewer Fund, $256,404; and Solid Waste Fund, $26,618.

All municipal budget decisions are being made in the shadow of the beast – the COVID-19 Coronavirus pandemic and its economic consequences. Here is Valley Health’s COVID-19 testing tent off Commerce Ave.

On the smaller numbers side, at least for citizens, was an ordinance amendment removing a $10 fee for failure to properly separate recycling materials for each occurrence after the third violation, which seemed appropriate since the Town adopted single-stream, non-separated recycling about a year ago.

And not really involving numbers, other than the Town’s savings on not having to print up vehicle decals for all the town’s drivers while still collecting a licensing fee, was an ordinance amendment not requiring the display of the Town sticker on your car. They can be requested for display for those needing them for visits to County dump sites.

Both ordinance amendments were approved unanimously.

Not coincidentally to the necessity for reserve transfers of over $1.65 million to contingency uses across the Town’s financial spectrum, was an adjournment to closed session at 8:05 p.m., just over an hour into Monday night’s meeting, to discuss “Personnel” issues “related to the on-going pandemic”. The closed session motion was called “to discuss the assignment, appointment, promotion, performance, demotion, salaries, disciplining, or resignation of specific public officers, appointees, or employees of any public body” pursuant to state codes.

The “smart money in Vegas” for a council that likes to gamble is that one-hour closed session discussion relates to earlier council public discussion of which positions in which departments are most expendable in the face of coming COVID-19 revenue shortfalls.

No announcement regarding personnel was made following reconvening to open session at 9:05 p.m. Then it was on to work session discussion of committing Town resources to “potential options the Town may provide citizens and businesses related to local economic recovery related to COVID-19”.

Numbers projected for the Town’s proposed Economic Assistance Recovery Program – is it a drop in the bucket for struggling businesses but a potentially crippling financial commitment for the Town Budget? Council has yet to decide.

That extensive work session discussion in which there appeared to be divided as to the commitment of additional Town resources in its unknown fiscal future, as well as whether suggested recovery amounts ranging from a $500 minimum for businesses with annual grosses of up to $50,000 to a maximum of $13,000 for businesses grossing over $500,000 annually could actually help a struggling local business to survive, will be covered in a related Royal Examiner story and virtual recording of Monday’s online work session.

But hear the above budget and ordinance amendment discussions, votes, as well as other business conducted at Monday’s meeting, and the work session discussion, in this  Royal Examiner virtual recording: