When Charlotte officials decided to change the water rate method last week, some Lake Norman residents let out a sigh of relief, but only a small one.
Many residents feel the change is a step in the right direction but that more should be done to make water charges fair for all.
Charlotte city council members approved water and sewer rate methodology changes at their Feb. 28 meeting that will have most residents paying more, and the heaviest users getting a slight reduction from what they had been paying. The council oversees the budget for Charlotte Mecklenburg Utilities, which serves Huntersville, Cornelius and Davidson as well as Charlotte and unincorporated areas of Mecklenburg County.
The rate structure divides users into four pricing tiers, with the highest-price tier designated for those who use more than 16 CCF a month.
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A CCF, which is equal to 100 cubic feet, is a standard measure of water volume.
"We got the message from our customers that they did not believe our rate methodology was fair and equitable," said Charlotte-Mecklenburg Utility director Barry Gullet. "The purpose of the study was to look at rates and to determine if they were properly allocating costs."
CMU won't know the water rates based on the new methodology until it calculates FY 2012's budget. Using the current fiscal year's budget and the new rate structure, water and sewer rates will increase between $1.60 and $6 each month for about 95 percent of CMU's customers.
"It's roughly proportional," said Gullet of using this year's budget numbers to calculate next year's rates under the new methodology. "But to try to calculate what your bill's going to be would be wrong."
Many Lake Norman residents said the improvements were minimal and failed to address the core problems within CMU.
Cornelius resident Jim Duke said the department should get rid of the "punitive" fourth tier and address the department's growing debt.
"Developers are paying a very nominal fee for expanding the system. So the current residents have to pay for it," he said. "It's a political thing. You have a perfect storm of the developers getting free water and sewer and passing the charges on to residential customers."
CMU's rate methodology is revenue neutral, with all money collected going toward operating costs, overhead and debt service.
The department is more than $1 billion in debt, and about 60 percent of revenue goes toward debt services, said Charlotte councilmember Warren Cooksey.
Resident Sally Gordon questioned why the rate methodology changes only applied to CMU's residential customers and not to its commercial or irrigation-only customers.
"If conservation is the goal, if we're trying to get people to use less water, of those three groups, who would you make the water most expensive for? It's the irrigation-only customers," said Gordon.
But Gullet said while water and sewer rates for commercial customers will continue to be uniform, those customers also will have higher availability charges and no sewer cap. For residential customers, the new price structure includes two new monthly availability charges: $3.73 for sewer and $2.19 for water, under the current budget.
Officials also reduced the sewer charge cap from 24 to 16 CCFs.
As for irrigation-only customers, Gullet said their rate system begins at Tier 3 levels, with most ending up in Tier 4.
"They're paying their fair share," said Vic Simpson, spokesman for CMU.
Gullet said those residents who enter the fourth tier are often those who irrigate their lawns. He suggested those residents can eliminate the fourth tier on their own by using the department's new incentive program.
If residents install a separate meter for just irrigation and use smart irrigation controllers, CMU will only charge that water at Tier 3 levels, starting July 1. Residents will also not be charged for sewer on that acount.
Conservation controllers like the ones the department is encouraging through an incentive program helps reduce water use by 15 to 30 percent, said Gullet.
Duke, who led a resident water task force in the Lake Norman area last year, said he expects more people than ever to be upset with CMU's rates.
Still, some residents disagree about pricing strategy.
While residents such as Duke say they feel large property owners in the fourth tier are still being charged disproportionately, other residents like Turner think customers in the fourth tier are getting too much of a break.
"For us to give relief to the bigger user and put the burden on the little man - that's unacceptable," said Turner. "We're putting the burden on the very least of people, the citizen who's on the fixed income. They don't have an extra dollar to pay you."
Turner said he doesn't believe the city gave the current tier system enough time to prove itself.
Cooksey believes the change is more fair to all residents, especially since the department lowered the sewer rate cap to 16 CCFs and added availability charges.
"We increased the amount of fixed-fee revenue from 6 percent to 16 percent," he said. "That way if we have another severe weather situation or if water consumption goes down dramatically, we'll still have to raise rates, but we won't have to raise them as much."
Most residents agreed with Cooksey that the availability charges will give the department more financial cushioning in the event of unforeseen drops in user revenue.
But some also said more could have been done, and they said they're doubtful the changes will be what ultimately fix CMU's budget issues.
"The systemic problem is this huge amount of debt and misallocation. The only way to bring CMUD under control is to put it under state control," said Duke.
Said Turner: "They will be back. We'll fall short again, and next year they'll be asking for a slight increase over all on water bills. Even the tier and methodology will not capture all of their costs."