Beyond the Tap, Part 2: The Cost
As the Floyd-Floyd County Public Service Authority stands today, it is able to fund regular operations through its rates and customer base of about 500, but it is not able to invest in projects for improvement.
“Beyond the Tap” is a multi-part series by Floyd Times that breaks down the challenges facing the Floyd-Floyd County Public Service Authority. Part 2, “The Cost,” examines the costs associated with the future of a strong PSA.
As the Floyd-Floyd County Public Service Authority stands today, it is able to fund regular operations through its rates and customer base of about 500, but it is not able to invest in projects for improvement. According to the Environmental Protection Agency, it takes a customer base of about 10,000 to generate revenue for investment — and that figure is still considered a “small system.”
Floyd’s “very small” system and “narrow rate base” simply don’t allow for accumulating the fund fast enough to address issues without exponentially increasing rates for town residents each year for the foreseeable future.
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The Floyd-Floyd County PSA, which was installed in the ‘50s and ‘60s, “is showing its age,” said Mike Maslaney, a member of the PSA’s Board of Directors since 2015. “...We have about 29,000 feet of concrete sewer pipe that is 10-20 years past its rated life expectancy. Replacement of this pipe could cost $100 to $200 per foot.”
The Town has included the PSA as a line item in its budget for the past four budget cycles, banking about $135,000 in total (about $50,000 has not been expensed) for capital projects, and the County forgave a PSA loan in the amount of $307,390.68 in 2024 to alleviate fiscal stress. The County also waived payment from the PSA for two years prior to the loan forgiveness, which County Administrator Kim Chiddo said totaled about $44,150, and allocated $75,000 to the PSA for 2025.
Both the Town and the County allocated American Rescue Plan Act (ARPA) funding, which stemmed from the COVID-19 pandemic, to PSA upgrades/improvements. The Town allocated $310,000 of the $450,000 received (about 69%), and the County allocated about $878,540 of its received $3,050,000 (about 29%). In April 2023, the Virginia Department of Health offered the PSA about $1.5 million (about $1 million in grants and about $500,000 in loans). Combined, these outside sources resulted in about $4.5 million in funding for the PSA in recent years.
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The biggest question regarding the state of the PSA revolves around regular funding and how the Town and County should divide the fiscal responsibility.
Mayor Will Griffin, who is a member of the PSA Board, said the financing model in a new Charter “would be an acknowledgement of what each body of government is expected to do.” He noted that the Town does not want to “overcommit” to PSA funding and then not be able to meet its set obligations of $2.335 million over the next 10 years.
(Note: The $2.335 million consists of the following projects: Construction of Public Works Building ($400,000), Street Paving ($350,000), Harris Street Walkway ($150,000), Penn Road Sidewalks ($150,000), Donkenny Demolition ($400,000), W.G. Lineberry Renovations ($135,000), Public Works Truck ($50,000), and Acquisition of Profitt House ($700,000).
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At the December 2025 joint meeting of the PSA Board, Board of Supervisors, and Town Council, the town team presented a packet of information that estimates total potential cash needs of the PSA to be $4.275 million, a conservative estimate, over the next four to five years. The packet breaks down costs into “Current Projects,” “Future Projects,” and “Capital Equipment Future Needs.”
Click to enlarge lists.
ARPA funds and grants/loans from the Virginia Department of Health played a role in these conversations being put off until now. Because of ARPA and VDH grants/loans, all of the “Current Projects” were “paid for from sources outside of the PSA,” according to the meeting packet.
The Town’s budget reached $1 million for the first time in history for fiscal year 2025-2026, and while 45% of the PSA’s customer base lives within Town limits, this is not a problem that the Town can address on its own, officials state. The meeting packet acknowledges the Town’s dependence on the PSA system and notes the Town team “would also like to stress that 100% of the Town residents are also residents of Floyd County…”
The County budget totals about $52.8 million for FY25-26, however, more than half of that is ear-marked for costs set at the state level, including the operation of Floyd County Public Schools and funding for essential expenses, such as utilities, taxes, and insurance.
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When there’s a break in the PSA system, our neighbors are impacted in significant ways. One of the biggest recent main water line breaks, caused by freezing temperatures in December 2024, poured 60,000 gallons of water into the garage of the Farmers Supply building (now Phoenix Hardwoods) on Main Street and 70,000 gallons into Carilion Clinic. Maslaney said there was minimal damage at Phoenix Hardwoods because the garage drains into the street, and Carilion had to replace some sheetrock throughout the building.
Maslaney said the PSA "dodged a bullet” in this situation because they were able to turn off the water to the businesses before the tank at the high school “got below the minor limit mandated by the state,” which would have required water to be turned off for the whole town on Christmas Day. Maslaney noted that “the two main breaks were so large that our wells could not keep up...”
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Additionally, the more fragile infrastructure becomes, the more likely it is to have a break in the system that requires PSA customers to take additional steps to be able to use their water safely. Maslaney said that while boil water notices are not common in Floyd County, they are inconvenient for customers and require a lot of work from PSA staff. They are required by the Virginia Department of Health when there is a break in the system where “outside contamination,” such as waste, could be introduced.
“Beyond the Tap” is a multi-part series by Floyd Times that breaks down the challenges facing the Floyd-Floyd County Public Service Authority. Read Part 1 here.