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Lexington City Council voted to approve a memorandum of understanding (MOU) with Virginia Military Institute to begin billing the institute’s water use through a master meter at its regular business meeting last Thursday.
The change is the conclusion of a nearly decade-long effort to bring both colleges in the city onto a master meter system in an effort to mitigate unaccounted for water loss.
VMI is the city’s biggest water customer, using around 20 percent of the water billed by the city. Washington and Lee University is the second largest, using around 16 percent of the water. The initial effort to switch to a master meter for the colleges began in 2015 as part of an effort to reduce the unaccounted for water lost in the city’s system. At the time, the city was losing between 20 and 25 percent of its water. Water loss has since been reduced to less than 10 percent. An MOU for a master meter with W&L was signed last year.
Currently, most buildings on the VMI post have their own water meters. With the master meter, the city will use one meter to account for the water flow onto the post and bill for that usage. VMI plans to keep the individual meters on the buildings to help figure out where some of the water loss might be, and the Institute will be responsible for any new meters that need to be installed on post.
The MOU that Council approved last week is largely similar to the one that was signed with W&L, with a handful of added agreements. The first is that the city will update its water rate study by July 1, 2028, with transparency for and engagement with VMI. W&L will also be included in that process. The update to the study will be included in the FY26 Capital Investment Plan that will be presented to council later this year, with $25,000 requested.
Secondly, the city will agree to provide up to $15,000 per year in assistance with utility breaks on the VMI post through the end of FY30. Any costs that the city accumulates above that baseline will be charged on a time and materials basis and any unused services will not be carried over or accumulate. The same commitment will be extended to W&L, even though it wasn’t part of its MOU.
The third agreement is for the city to lower its water rate for tier three customers to be equal to the tier two rate. VMI and W&L are two of four tier three customers in the city (the hospital and Hampton Inn are the other two) and are currently billed at a rate of $0.1495 per cubic foot. Under the change, the rate would be $0.1176 per cubic foot. The rate change was not approved at last week’s meeting, but will come before Council at its Feb. 20 meeting, provided the VMI Board of Visitors approves the MOU at its meeting in early February.
The master meter billing arrangement will result in increased revenue in utility fees from both universities. An estimated $400,000 is expected from VMI and an additional $330,000 is anticipated from W&L.
Chuck Smith made the motion to approve the MOU, with Leslie Straughan providing the second. The motion passed on a 5-0 vote. Prior to the discussion and vote, David Sigler recused himself, citing his employment by VMI as creating a conflict of interest, as the MOU solely impacts the Institute.
