The Town of Cape Charles continues to work through scenarios of the potential water and wastewater utility sale to Virginia American Water (VAW). The town has recently worked with VAW to try to achieve a more granular analysis of possible rate scenarios and how they might look if put into practice here in Cape Charles.
The town’s consultant, NewGen Strategies and Solutions updated the proforma that highlights what retaining the utility systems might look like. The report used 2023 Proposed Utility Fund O&M Budget, which is escalated at 6.0% in FY 2024, 5.0% in FY 2025, and 4.0% thereafter, the most recently available Capital Plan, with assumed spending beyond FY 2028 being $250,000 per year ($200,000 debt, $50,000 PAYGO), additional debt of $1,800,000 spread over the ten-year forecast in five separate bond issues ( FY 2023, 2024, 2029, 2030, 2031 at 20-year term, 4.0% interest), customer growth averaging 32 customers per year, maintaining Unrestricted Reserves above 30% of “Core Expenses” (O&M + Debt Service + PAYGO Capital), 50% of Water and Wastewater plan expansions funded by Developer Contribution.
The proforma is published below: