The Gloucester County Board of Supervisors met for four hours in a work session Tuesday night in the colonial courthouse to discuss public utilities, proposed transportation projects and the budget for fiscal years 2026 and 2027.
Since FY26 has now reached its midpoint, Director of Utilities Katey Legg provided the board with a projected revenue and expense outlook, as well as how the fund balance will be impacted in the near future.
In the categories of billed usage, application fees, development fees, and operating, the utilities department is expected to exceed those originally budgeted amounts at the conclusion of FY26. In interest and fees, total operating revenue, loan proceeds, personnel and fund balance and capital costs, the department is expected to be under budget.
“I feel like this is realistic for now,” said Legg about these projections.
Necessary repairs, aging equipment and the need to hire contractors have all contributed to these overages. By the current projected numbers, the utilities department is looking at an FY26 shortfall of $788,777.
To balance the budget, Legg has recommended to slow compliance projects ($115,000 in savings), use application fees ($282,450), hold Virginia Pollutant Discharge Elimination System (VPDES) funds ($249,000) and use a portion of the additional unassigned fund balance ($142,327). If the unassigned fund balance is used to balance the budget, that would leave public utilities fund with $49,898.
Legg also reviewed the FY27 Capital Improvement Plan recommendations for public utilities. These projects include pump station upgrades ($1,500,000), million gallon storage ($200,000), raw water pump upgrade ($500,000), force main extension Route 17 North Bypass ($300,000), Independence Road waterline improvements ($160,000), Gloucester Street and Clements Avenue waterline improvements ($600,000), Chiskiake Village waterline improvements ($480,000), Tillage Heights waterline improvements ($515,000) and Greate Road waterline improvements ($500,000) for a total of $4,755,000.
The rate increase plan for water and sewer customers was also reviewed. For FY26, customers experienced a rate increase of 14 percent which took effect on May 1, 2025. The plan for future rate increases was 13 percent for FY27, 11 percent for FY28, 10 percent for FY29 and 8 percent for FY30.
“A 13 percent increase will likely not be enough,” said Legg. She stated that another 14 percent increase would more than likely allow public utilities to break even and might allow them to put some of the funds away.
Compared to other nearby localities, Gloucester’s water and sewer costs appear to be at the higher end. “Our customer base is lower, so we are going to cost more,” she explained.
Legg also suggested for the board to create a new “Utility Reserve Policy,” which would state that the utility fund “will maintain an operating reserve fund equal to 180 days of operating expenses including depreciation. Any amount above the 180-day floor may be used to fund capital expenditures.”
“This would help in times of unexpected repairs,” said Legg.
During board discussion, supervisors lamented the state of public utilities and the rate increases.
“We have to invest in public utilities,” said vice chair Tony Nicosia.
“We have to look at every available option,” agreed chair Ashley Chriscoe.
Nicosia and Chriscoe both remarked that everyone uses public utilities in some capacity, regardless of whether they receive water and/or sewer services at home. Restaurants, stores, government buildings and others all use public utilities.
“Everybody uses public utilities,” said Nicosia. “We have to find some fairness in that.”
Transportation projects
Assistant Director of Planning, Zoning & Environmental Programs Carol Rizzio presented several proposed transportation projects that the county can submit for the Virginia Department of Transportation’s SMART Scale program.
The only project the board did not want to endorse was a proposed RCUT (or Restricted Crossing U-Turn) at the intersection of Route 14 and Crab Thicket Road, located near Peace Frogs and 7-Eleven.
“I’m not a fan of RCUTs,” said Chriscoe, stating that a better solution would be to lower the speed limit at the intersection. RCUTs require drivers to make right turns at intersections. VDOT recently completed a similar project at Woods Cross Road in the Ark area.
“This just reduces conflict points,” said Rizzio.
“I think this is going to cause more crashes and more fatalities,” said board member Joe Leming.
“That is the future of where transportation is going,” said supervisor Chris Hutson who mentioned seeing a lot of RCUTs recently in North Carolina.
SMART Scale projects the board did express interest in include extending the turn lane and pedestrian crossings at the intersection of Route 17 and Hospital Drive by Riverside Walter Reed Hospital; improving the intersection at Route 17 and Belroi Road; improving Roaring Springs Road bicycle and pedestrian accommodations; improving Route 17 intersections at Short Lane, Hickory Fork Road, Featherbed Lane, Providence Road, Woodsville Road, Fields Landing Road and Hayes Road; and widening Route 17 from Tide-mill Road to Guinea Road.
Budget next steps
The board is scheduled to take its capital improvement plan tour on Feb. 27 where it will view most of the recommended project locations for FY27. Steele will present her recommended budget to the board on March 9 with board adoption of the budget scheduled for April 30.