Fredericksburg approves budget, tiered utility rates

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1–2 minutes

Summary

Fredericksburg approved its fiscal 2027 budget with about 8% utility rate increases and a new tiered system for high-volume water, sewer users.

Why this matters

The decision will affect city utility bills starting July 1 and helps pay for major water and wastewater upgrades tied to future growth. Residents can also use the city’s new tracking app to monitor usage and manage costs.

Fredericksburg City Council approved the fiscal 2027 budget on May 12, 2026, including about 8% increases in water and sewer rates effective July 1 and a new two-tier consumption structure for higher-volume users.

City officials said the changes support more than $110 million in projects. The budget also included a $1 million transfer from Fredericksburg City Public Schools’ operating fund balance to the city’s operating fund. Council addressed the real estate tax rate and other fees during second readings.

Under the new rate structure, Tier 1 reflects the base 8% increase for standard usage volumes. Tier 2 applies higher rates to consumption above a threshold of about 25,000 gallons in the scenarios presented to council.

The city is also rolling out the Eye on Water app for daily and projected weekly usage tracking and leak alerts.

The rate changes will help fund upgrades including the Motts Run Water Treatment Plant expansion and the wastewater treatment plant project. Construction is underway on the joint city-Spotsylvania Motts Run facility, Fredericksburg’s only drinking water source. The project is expected to nearly double capacity from 12 million gallons a day to 24 million by 2027 and add 2 million gallons a day of potable water to the city’s supply, for a total of 7 million. The wastewater project, advanced in 2025, will increase treatment capacity from 4.5 million gallons a day to 6 million.

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