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Home My WebLink AboutI. 5. PUBLIC UTILITIES - WATER & SEWER CIP 4.15.2025PROPOSED FY 2025-26 OPERATING BUDGET City of Virginia Beach Robert S. Montague, Jr., Director Public Utilities April 15, 2025 Department Organization Summary Total FTEs Number of Divisions Total FY 2025-26 Budget 420*4 $158,433,995 * +3 Proposed FTEs (converts an equivalent number of contracted manpower hours) 2 FY 2025-26 Revenue - $158.4M •Total FTEs •Total FTEs•Number of Divisions•Total FY 2024-25 Budget •Number of Divisions •Total FY 2024-25 Budget Water Service Availability, $10,676,389, 7% Sewer Charges, $72,788,081, 46% Transfers In (Billing Support), $2,497,329, 1% Capital Recovery Fees, $2,893,405, 2% Interest Income, $2,600,415, 2% Miscellaneous Revenue, $3,390,446, 2% Sale of Water, $63,587,930, 40% 3 Five-Year Programmed Rate Increase Rate FY 2023 FY 2024 FY 2025 Current FY 2026 FY 2027 FY 2028 Water Commodity Rate $4.90 $5.20 $5.74 $6.23 $6.54 $6.87 Sewer Charge $30.81 $31.58 $32.37 $33.18 $33.18 $33.18 Water Service Availability Charge $4.41 $5.00 $5.53 $6.00 $6.30 $6.61 Residential Bill (5,000 gallons)$59.72 $62.58 $66.60 $70.34 $72.20 $74.15 $ Change $2.86 $4.04 $3.72 $1.86 $1.95 % Change 4.8%6.5%5.6%2.6%2.7% * Align with expected increases in operating expenses and recovery of the cost of providing services 4 Department Operating Budget Summary - Revenue 5 Revenue FY2024-25 Amended FY 2025-26 Proposed Change ($)Change (%) Sewer Charges $70,429,632 $72,788,081 $2,358,449 3.3% Sale of Water $58,604,182 $63,587,930 $4,983,748 8.5% Water Service Availability $9,852,269 $10,676,389 $824,120 8.4% Capital Recovery Fees $2,759,908 $2,893,405 $133,497 4.8% Miscellaneous Revenue $3,480,593 $3,390,446 ($90,147)(2.6%) Transfers In (Billing Support)$2,365,634 $2,497,329 $131,695 5.6% Interest Income $2,051,445 $2,600,415 $548,970 26.8% Total $149,543,663 $158,433,995 $8,890,332 5.9% FY 2025-26 Expenditures - $158.4M •Total FTEs •Total FTEs•Number of Divisions•Total FY 2024-25 Budget •Number of Divisions •Total FY 2024-25 Budget Norfolk Water Services Contract and Sales Agreement, $39,589,761 , 25% Operating Expenses, $32,421,269 , 21% Capital Outlay, $1,737,000 , 1%Debt Service, $19,612,900 , 12% Pay-Go, $11,285,519 , 7% Transfers to General Fund, $9,563,948 , 6% Reserves, $5,547,374 , 4% Personnel, $38,676,224 , 24% 6 Department Operating Budget Summary - Expenditures 7 Program FY2024-25 Amended FY 2024-25 FTE FY 2025-26 Proposed FY 2025-26 FTE Change ($)Change (%) Director's Office $1,780,893 3 $1,919,597 3 $138,704 7.8% Business and Customer Service $10,913,964 73 $10,247,646 73 ($666,318)(6.1%) Technical Services $3,112,809 25 $3,600,657 27 $487,848 15.7% Engineering Administration $10,426,947 76 $9,661,303 77 ($765,644)(7.3%) Regulatory Management $6,836,400 -$6,876,250 -$39,850 0.6% Lake Gaston Facility $3,184,700 -$3,182,603 -($2,097)(0.1%) Operations Administration $5,713,581 24 $5,607,337 24 ($106,244)(1.9%) Sewer Collection $7,311,803 57 $7,528,009 57 $216,206 3.0% Water Distribution $5,773,992 46 $6,006,299 46 $232,307 4.0% Meter Operations $5,926,509 28 $5,373,789 28 ($552,720)(9.3%) Sewer Pump Stations $10,100,179 58 $10,315,241 58 $215,062 2.1% Electrical Support $2,972,686 27 $2,709,732 27 ($262,954)(8.8%) Norfolk Water Contract and Sales Agreement $37,251,941 -$39,589,761 -$2,337,820 6.3% Debt Service $18,990,644 -$19,062,900 -$72,256 0.4% Pay-Go $8,000,000 -$11,285,519 -$3,285,519 41.1% Transfers $9,357,647 -$9,563,948 -$206,301 2.2% Reserves and Retiree Health Care $1,888,968 -$5,903,404 -$4,014,436 212.5% Total $149,543,663 417 $158,433,995 420 $8,890,332 5.9% Comparative Municipal Water and Sewer Charges Monthly Bill for Single-Family Residence with Average 5,000 Gallons Water Consumption Municipality Rank Water Sewer Total Newport News 1 $38.54 $27.53 $66.07 Virginia Beach 2 $34.23 $32.37 $66.60 Hampton 3 $38.34 $30.08 $68.42 Portsmouth 4 $46.37 $28.61 $74.98 Chesapeake 5 $50.01 $26.07 $76.08 Norfolk 6 $42.05 $36.36 $78.41 Suffolk 7 $89.44 $51.34 $140.77 *Rates are as of FY 2025 8 Water Tap and Meter Fee Increase •Recommended fees recover rising costs of meters, materials, equipment and labor •Part of the approved five-year programmed fee increase Fee FY 2025 Current FY 2026 5/8-inch and 3/4-inch tap and meter $1,073 $1,138 5/8-inch and 3/4-inch meter only $651 $716 1-inch tap and meter $1,161 $1,235 1-inch meter only $739 $813 *Water taps for mandatory connections only. Most taps will remain at actual contractor cost. 9 Challenges in FY 2025-26 and Beyond •Minimal growth in customer accounts – 2% since 2015 •Norfolk Water Contract and Sales Agreement – 25% of FY 2025-26 operating budget •Increasing operating costs •Aging infrastructure / reinvestment 10 Initiatives Underway and Conclusion •Water Meter Replacement Program •Work order and asset management system replacement •Compliance with EPA’s LCRR •Aging Infrastructure 11 PROPOSED FY 2025-26 to FY 2030-31 WATER AND SEWERCAPITAL IMPROVEMENT PROGRAM Mark Babbitt, P.E. Utility Engineering Manager April 10, 2025 Water & Sewer Section Overview FY Proposed Water Proposed Sewer Proposed Total FY 26 $ 16,449,000 $ 27,285,000 $ 43,734,000 FY 27 $ 17,364,000 $ 22,895,000 $ 40,259,000 FY 28 $ 16,690,000 $ 25,483,000 $ 42,173,000 FY 29 $ 7,850,000 $ 33,880,000 $ 41,730,000 FY 30 $ 17,239,000 $ 28,595,000 $ 45,834,000 FY 31 $15,140,000 $ 34,180,000 $ 49,320,000 Total $ 90,732,000 $ 172,318,000 $ 263,050,000 34%66% Public Utilities FY 2025-26 to FY 2030-31 Capital Improvement Plan Water Projects – 27 Sewer Projects – 21 Water & Sewer Section by Project Type 90 6 2 2 Sewer Capital Program 71 8 17 4 Water Capital Program Aging Infrastructure Operations & Support Roadway & Stormwater Coordination System Expansion Challenges and Opportunities •Reduced CIP buying power o Rising project costs o Asset renewal rate •Departmental technology overhaul o New customer portal o Geographic Information System (GIS) upgrade o Computerize Maintenance Management System (CMMS) replacement 48th Street Pump Station Replacement •Project to replace 48th Street Sewer Pump Station •Total capital investment: $2.29M •Construction started: August 2023 •Project Completed: October 2024 Atlantic Avenue Water Meter Vault Replacement Phase 2 •Project to replace 42 water meter vaults along Atlantic Avenue •Total capital investment: $0.90M •Construction started: October 2024 •Estimated completion: April 2025 Royal Palm Arch Water and Sanitary Sewer Rehabilitation Phase 1B •Project to replace 3 miles of water and sanitary sewer main •Total capital investment: $11.75M •Construction started: March 2024 •Estimated completion: June 2025 Great Neck Water Tank Replacement •Project to demolish and replace 1-million-gallon elevated storage tank •Total capital investment: $8.38 million •Tank demolition started April 2024 •Estimated completion: January 2026 Green Garden Water Main Improvements •Project to replace 2.3 miles of neighborhood water main •Total capital investment: $7.5 million •Construction started: October 2024 •Estimated completion: Spring 2026 Lynnhaven Water Pump Station Upgrades •Project to rehabilitate and upgrade the Lynnhaven Water Pump Station •Total capital investment: $3.48M •Construction started: September 2024 •Estimated completion: September 2026 Todays CIP Impacts: •Aging Infrastructure •A large amount of Construction on the street •Limited contractor availability •Increased replacement cost •Decreased Asset Renewal Rate CIP Impact example: 2020 – Pump Station Replacement Rate 5/year @ $2 Million each. “84 year total asset life cycle replacement rate” 2025 – Pump station Replacement Rate of 2.5/year @ $3 million each. “125 year total asset life cycle replacement rate” American Water Works Association recommends 1%/year replacement rate for a 100 year total life cycle replacement rate.