Troutman residents may be facing a double-digit water and sewer rate increase this summer if town aldermen accept the findings of a report issued by the state's rural water association.
The report, presented to the town April 5, pegged a rate hike as the only way the town could generate enough revenue to cover expenses of its water/sewer operations.
Since the water/sewer function is separate from services supported by the town's general fund, any surplus money generated by property taxes cannot be used to pay for it.
Marty Wilson, utility manager and finance specialist for the rural water association, said, "This is a bare-bones rate study based on projected 2011 expenses that assumes no capital expenditures next year, really no fat at all."
The study suggests increasing rates by 11 percent annually for customers using just water and by 19 percent annually for customers using both water and sewer. The actual dollar amount of the increase would depend on the customer's location and how much the customer used.
The current water rate is $5.25 per 1,000 gallons for in-town residents. The association suggests an increase to $5.84 per 1,000 gallons. For a customer using 6,000 gallons per month, the increase would amount to about $43 more annually. For in-town water/sewer customers, the suggested increase is from $8.63 per 1,000 gallons to $10.27 per 1,000 gallons, about $120 annually. The rate hikes for customers outside town limits would be twice as much as under the current rate structure.
Town board members were quick to note that water and sewer rates had not been raised in 10 years.
"The problem is we're dealing with bad decisions that were made years ago, and you can't raise taxes to address this," Mayor Pro-Tem Mike Spath said.
Town Manager David Saleeby suggested doing rate studies every two years "so if necessary rates can be adjusted incrementally."
Wilson said the dilemma facing the board is not unique. "I have already done many rate studies this year, and I can tell you that a similar situation exists in many communities throughout the state."
That may be little comfort for town aldermen when they meet Friday to begin discussing the fiscal 2011 budget, which must include a decision on water and sewer rates. By law the town must adopt a budget by July 1.
The N.C. Rural Water Association provides a wide variety of services, including rate studies, to communities of fewer than 10,000 residents. It is funded by federal grants, membership fees and some state funding.