Faced with rising capital costs, the city of Charlotte said Monday that water and sewer bills could rise by about $51 a year on average for the next seven years.
To pay for current projects, as well as future expansions and upgrades, the Charlotte Mecklenburg Utilities Department presented an estimate of how much users might have to pay.
A person who consumes 8 CCFs (or 800 cubic feet) of water might have to pay an extra $3.57 a month starting next fiscal year, which starts in July. The amount would rise each year under the projections, to $3.73 a month in fiscal year 2017; $3.99 in 2018; $4.26 in 2019; $4.50 a month in 2020; $4.81 a month in 2021 and $5.15 a month in 2022.
Speaking at a City Council meeting Monday, CMUD director Barry Gullet stressed the projections are preliminary and could change.
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Another option presented would be to have increases every other year or every three years. But the hikes would be steeper. Council members will consider any rate hike for the upcoming year in early 2015.
CMUD also said it’s considering increasing how much it charges for basic service as it looks for more predictability in how much revenue it receives from customers.
CMUD today has four tiers of water rates, with the amount users pay increasing as they use more water. The city has in the past tried to keep what it calls its “lifeline” service inexpensive. But the city has said the amount paid by someone who uses very little water doesn’t capture the expense of providing the service.
“We may need to increase the fixed portion of our bill,” Gullet said.
CMUD has said that relying on so-called “Tier 4” revenue can make it hard to budget. In dry, hot weather, people use more water and the utility department’s budget can be flush. But in a rainy season, people don’t water their lawns, and they buy less water. Revenues can plummet.
Gullet told council members that it’s difficult for the utility to find the right balance between its budget and promoting conservation.
“We need to drive down water usage,” he said. “But we need to do it in a way that is (financially) sustainable.”
Gullet outlined CMUD’s challenges, which include replacing aging infrastructure. He said over the next five years, projects include an upgrade to the Irwin Creek Wastewater Treatment plant ($33 million); rehabbing water and sewer lines ($114.5 million); upgrading the Sugar Creek plant ($18 million); and making other improvements to wastewater and water plants ($43 million).
One current project is a $97 million replacement of pipes on the McAlpine Creek sewer line through south Charlotte.