COMMONWEALTH OF VIRGINIA
VIRGINIA RESOURCES AUTHORITY
$16,675,000 Water System Revenue Refunding Bonds,
(County of Gloucester, Virginia)
Continuing Disclosure Statement
Fiscal Year Ending June 30, 2005
County of Gloucester, Virginia
The County of Gloucester, Virginia (the “County”) is located in Hampton Roads, Virginia’s
coastal plain area. It is bordered on three sides by water, and major highway access is
provided by U.S. primary highway Route 17. The County is 225 square miles in land area.
Gloucester, the County seat, is 59 miles east of Richmond, 45 miles north of Norfolk and the
Port of Hampton Roads and 153 miles south of Washington D.C.
The County has a traditional form of government. The governing body of the County is the
Board of Supervisors of the County (the “County Board”), which establishes policies for the
administration of the County. The County Board is composed of seven members, five of
whom are elected from single-member districts and two of who are elected from the County
at-large. Members are elected for four-year terms on a staggered basis. The County Board
appoints a County Administrator who serves at the pleasure of the County Board and carries
out the policies established by the County Board.
Governmental Services Supported by the County
The County provides a full range of services including police protection, social services,
planning and inspections, public works and utilities, libraries, and general government
administration. The Commonwealth of Virginia provides the construction and maintenance
of highways, streets, and infrastructure located within the County. Local volunteer fire and
rescue companies provide fire and rescue protection for the citizens, and the County
provides support through cash contributions for operation and capital expenditures.
County Water System
The County water System is the integrated public water system for the County. It includes
three former water systems, which were merged into one in 1988; those three were the
Gloucester Point Sanitary District (“GPSD”), a County-owned central water system, and the
Gloucester Sanitary District No. 1 (“Courthouse Sanitary District”). Pursuant to two leases,
each dated August 2, 1988 (the “Leases”), effective July 1, 1989, the County merged the
three water systems into a single unified system with the County responsible for all repairs,
maintenance, billing and collection functions. The Leases provided that the County pay the
sanitary district rent sufficient to enable them to pay their existing indebtedness.
Since 1988, the debt of the GPSD has been retired and the County has exercised its option
under the Lease to acquire GPSD’s water system. The County continues to pay rent to the
Courthouse Sanitary District for the leasing of its water supply, storage, and distribution
facilities. The Lease payments are paid as part of the system’s operating expenses and this
payment constitutes the payment of the Courthouse Sanitary District debt described below.
When the existing indebtedness of the Courthouse Sanitary District is retired, under the
Lease the County has the option to acquire the district’s water facilities for a nominal
amount, and it is anticipated that ownership of such facilities will be transferred to the
The County Board serves as the governing body of the two sanitary districts. The County
Water System (and now, the former GPSD water system) is owned by the County.
In 1990, the County placed into operation certain facilities, which completed the integration
of the County Water System. The facilities include a dam, reservoir, treatment plant,
storage tanks and distribution pipelines.
The dam is an earth dam approximately 39 feet high and 2,034 feet long; a 639-acre
reservoir with a total storage volume of 6,420 acre-feet of water; a raw water intake and
pumping station; two million gallon per day water treatment plant; wastewater storage
lagoons; a one million gallon elevated water storage tank; approximately nine miles of 10-
inch, 12-inch and 16-inch water transmission mains; and over 30 miles of 6-inch, 8-inch and
12-inch distribution pipe lines.
The reservoir has a total water storage volume of 6,420 acre-feet and a safe yield in excess
of three million gallons per day. In addition to providing raw water storage for the County,
the reservoir also provides supplemental benefits for the County residents in the form of a
variety of recreational facilities. Those benefits include two boat docks, picnic area, hiking
trails and bank fishing areas.
The water transmission pipeline connected the Courthouse Sanitary District facilities with the
County Water System. This provides a single water supply distribution system serving the
more heavily populated area in the central and southern portions of the County.
When the treatment plant is in operation, a booster pumping station pumps water to the
water storage tank located between Gloucester Point and the Gloucester Courthouse area.
The County Water System has a storage capacity of 4 million gallons. Average daily
consumption of water is 833 thousand gallons. There are currently 4,099 customers in the
County Water System.
The County recently completed a project that brings 2 million gallons per day (MGD) of
additional water treatment capacity to the County Water System and is projected to meet
the County’s needs through the year 2030. The project consisted of 2 MGD of deep
well/membrane treated water in 1 MGD increments; this is to complement our existing 2.0
MGD surface water treatment plant, giving the County 4.0 MGD of usable capacity. The new
RO plant was constructed for the expansion of an additional 2.0 MGD when necessary with
the drilling of two additional wells. This expansion has already been designed and approved.
Prior and Subordinate County Water System Indebtedness
The County Water System was financed in part by the issuance in 1980 to the United States
Farmers Homes Administration of the County’s $421,600 revenue bonds (the “County
System Debt”). The County System Debt had an outstanding principal balance as of June
30, 2005, of $262,012 and matures in 2020. Scheduled monthly payments of principal and
interest are $2,054.
The Courthouse Sanitary District issued $670,000 of 5% general obligation water and sewer
bonds (“Courthouse System Debt,” collectively with the County System Debt, the “Senior
County Indebtedness”) to the United Farmers Home Administration in 1976. As of June 30,
2005, $191,707 of the Courthouse System Debt is outstanding, and the district makes
monthly payments of combined principal and interest of $3,464. These have a final maturity
of 2011. Pursuant to its Lease, the County will pay rent for lease of the Courthouse Sanitary
District’s water facilities in the amount of 25% of the annual debt service on the Courthouse
System Debt, the County also leases the district’s sewage facilities at a rent equal to the
remaining 75% of such annual debt service.
The Senior Debt constitutes a lien on the revenues of the County Water System, prior to
those of the 1992 and 2002 County Bonds and any future County Bonds.
On November 22, 2000, the County issued and sold to VRA the County’s $8,910,000 Water
Revenue Bonds, Subordinate Series 2000 (the “2000 Subordinate County Indebtedness”), to
finance an expansion of the water system. The 2000 Subordinate County Indebtedness is
secured by a lien on the County Water Revenues that is junior to the liens securing the
Senior County Indebtedness and the 1992 and 2002 County Bonds and any future County
Bonds. The outstanding principal balance as of June 30, 2005, is $8,910,000.
The service area for the System begins just north of the Gloucester Courthouse proceeding
south down Route 17 corridor to Gloucester Point serving the major population centers along
the way. Also, service is proceeding along Route 216, terminating at an area know as
“Bena,” again serving major population centers along Route 17. A population of
approximately 10,000 is served by the System.
Management and Personnel
Day to day management of the System is provided primarily by the County Administrator,
the Director of Public Works and the Director of Public Utilities.
William H. Whitley was appointed County Administrator in 1984. Prior to that appointment,
he served as the County Administrator for Buckingham County and in Mathews County. He
received both Bachelor and Master of Arts degrees in government from the College of
William and Mary. During his administration in Buckingham County, Buckingham County
completed its reservoir and water distribution system.
Garrey W. Curry, Jr., P.E. has been the Director of Public Works in the county since March
2004. Prior to joining the County, he was a senior project engineer with a national
environmental engineering consulting company. He holds an Associates of Science degree in
engineering science and Bachelor of Science degree in civil and environmental engineering.
Mr. Curry has been licensed as a professional engineer in the Commonwealth since 2001.
Lawrence A. Dame has been with the County Public Works Department as the Director of
Public Utilities since 1982. Prior to 1982, he was with a private consulting firm and the
Hampton Roads Sanitation District. He has associate degrees in applied science in drafting
and design and civil engineering technology. Mr. Dame is licensed as a Water Works
Operator II and Waste Water Operator II by the Commonwealth.
Rates, Fees and Charges and General Fund Subsidy
The County’s current rates, fees and charges are shown below. The rates shown became
effective July 1, 2004. It had been four years since the last rate increase
Minimum Monthly Charge Charge per 1,000 Gallons for 3,000 Charge per 1,000 Gallons for over
(2,000 Gallons) to 8,000 Gallons 8,000 Gallons
Water $13.36 $6.63 $6.88
The County charges a $3,500 connection fee. The new rate for this became effective July 1,
Effective July 1, 2002, the County instituted a development fee, which is to be used for the
expansion and improvement of the public water and sewer system. The fee is based on
meter sizes (for example an apartment unit or house would pay a $1,200 sewer
development fee and a $500 water development fee).
The County Indenture requires the County to establish, fix, charge and collect such rates,
fees and other charges for the use of and for the services furnished by the County Water
System so as to produce new County Water Revenues in each fiscal year sufficient to pay
debt service on the County Bonds and all other indebtedness of the County payable from
County Water Revenues, and to provide a margin of at least 20% over such payments. For
purposes of satisfying this rate covenant, the County Water Revenues may be increased by,
among other money, money legally appropriated from the general funds of the County to
pay the operating expenses of the County Water System or to pay debt service on the
County Bonds or such other indebtedness.
As indicated in the annual Comprehensive Annual Financial Report, the County has had a
long-standing policy of subsidizing the operating expenses of the County Water System and
County Bond and other County Water System indebtedness through general fund
appropriations. The County expects to continue to make these appropriations throughout
the term of the 2002 County Bonds.
Hampton Roads Sanitation District
By court order dated March 8, 1988, the entire County was made a part of the Hampton
Roads Sanitation District (“HRSD”). The County has executed an Interest Participation
Agreement (“IPA”) pursuant to which the HRSD will build sewer interceptor mains to areas
of the County at the County’s request. The IPA provides that HRSD borrows the capital for
projects and the County guarantees the interest payment on the debt. HRSD will credit
against the interest payment 70% of the sewage treatment payments rendered by sewer
connections in the County. Ultimately the interest payment guaranteed by the County will
reduce to zero when the credits have reached a sufficient level.
Currently, the County has an IPA with HRSD for the construction of a force main along U.S.
Route 17 connecting the HRSD York River Sewage Treatment Plant with the Courthouse
Sanitary District Sewage Treatment Plant, which was taken off line when the force main was
complete. Additional mains to serve two County schools and seafood industries also were
constructed. This construction was completed in the fall of 1992.
The current HRSD project provides for interceptor sewer only. Construction of collector
sewers remains for private interests to accomplish in response to development pressure. At
the County’s option, the HRSD will build interceptors to within one mile of any population
center the County wishes to serve.
HRSD provides essentially all of the sewer needs of the County. The County’s Utility Funds
does not account for any significant sewer revenues or expenses.
The County’s financial statement for the fiscal year ended June 30, 2005, have been audited
and reported on by Robinson, Farmer, Cox Associates, Certified Public Accountants,
Richmond, Virginia. This report, as well as the reports for the previous two fiscal years is
available on our Internet site www.gloucesterva.info.