Town OKs rate hike

Published 11:41 am Monday, May 14, 2018

By Toby Thorpe

for the SNAP


Norwood Town Council approved a 15 percent increase for water and sewer rates Monday night, along with a schedule for the rate to increase for the next few years.

Commissioners heard a presentation on water and sewer rates from Marty Wilson and Terry Greene of the North Carolina Rural Water Association.

The report opened with a somber assessment of the town’s current rate structure, showing that at current rates, the town is generating $1.3 million in revenues annually through water and sewer bill payments, but that total expenditures for water and sewer total $2.1 million. As a result, the remaining $800,000 shortfall must be covered from other areas of the town budget.

Wilson opined that the town’s water and sewer rate schedule has not been adjusted appropriately in previous years to allow for future repair and replacement of aging water lines, pumps and treatment equipment.

“Every year that you don’t adjust rates by at least the amount of the CPI (Consumer Price Index), you are losing needed revenue,” he said.

In order to eliminate the $800,000 shortfall in one year would require a 62 percent rate increase, Wilson said. “This can’t be done overnight,” he said.

“How do most other towns and cities handle adjusting rates?” asked Cohen.

“It’s all over the board,” said Wilson. “Every town is different, and there is no ‘one size fits all’ approach. Plus, we are seeing this type of problem in towns all over the state, because the price of providing water and sewer is rising everywhere as a result of aging infrastructure and a lot of towns have not planned in advance to allow for this.”

“How do our rates compare to other towns our size?” asked Hartsell.

Mullis reported that Norwood’s rates are in the 18th percentile for sewer, and the 50th percentile for water.

Discussion among commissioners also determined that the town’s current “declining block” rate structure has been cited as a reason a number of utilities grant applications the town has submitted have been rejected. Under the “declining block” structure, the per-unit price of water decreases as water consumption increases, and as such does not reward water conservation, a key component in scoring of such grants.

Following discussion a motion was made by Cohen, seconded by Commissioner James Lilly and passed unanimously to increase water and sewer rates incrementally over four years at 15 percent per year, and to discontinue the “declining block” rate structure, effective July 1.

Mullis noted that the increase translates into the following:

• July 1, 2018 — Base Rate moves from $16.44 per 1,000 gallons to $18.91, an increase of $2.47;

• July 1, 2019 — Base Rate moves from $18.91 per 1,000 gallons to $21.75, an increase of $2.84;

• July 1, 2020 — Base Rate moves from $21.75 per 1,000 gallons to $25.01, an increase of $3.26; and

• July 1, 2021 — Base Rate moves from $25.01 per 1,000 gallons to $28.76, an increase of $3.75.

“The long term stability of the town’s infrastructure is vital to our ability to provide dependable high quality water and sewer services for years into the future,” Mullis said. “This action will begin the process of insuring that the necessary resources are committed to providing those needed services to our water and sewer customers.”

Tim Morton, who resides on Doody Avenue in what is known as the Mill Hill community, expressed concerns over street conditions during the public comment portion of the meeting.

“Most of the streets on the Mill Hill are full of potholes,” said Morton, who expressed concern that the street conditions there are resulting in damage to vehicles.

“Lots of people use Doody Avenue to cut through from (U.S. Highway) 52, and it is really rough,” he said, “and Kelty Avenue is in bad shape across to Flynn Road.”

Morton asked commissioners to “drive through and see for yourself.”

Commissioner Robbie Cohen responded that the town had recently examined and prioritized the condition of streets within the city limits for repaving, and Town Administrator John Mullis noted the needs which were identified exceeded the town’s available budget for street repairs.

“After we did the list, we determined that funds were not sufficient to repave all the streets that need it, so we are having to prioritize which ones we will do first,” he said. “We will address this in the budget process.”

Mullis reported the town has applied for state funding for repairs at the town’s wastewater treatment plant, but also noted that in order to gain a permit to continue operating the plant, a backup action plan is required, and that the town has entered into an agreement with Rain for Rent, a Charlotte-based utility firm, to formulate this plan.

In response to a question by Commissioner Wes Hartsell regarding the cost of the agreement, Mullis replied that “it is quite reasonable,” and he expects the expense to the town to be “in the $1,500 range.”

Mullis noted that the town plans to apply for federal funds through the U.S. Department of Agriculture for the purpose of infrastructure development.

Mayor Pro-tem Linda Campbell later reported she had been approached by a number of Pine Street residents who are concerned with the speed of vehicles, and that some are requesting a speed bump be installed.

“Over half the residents of the street would have to sign approval to install this,” noted Mullis, who said the Norwood Police Department would further monitor the situation.

All commissioners expressed appreciation for the work of town staff and volunteers at the recent Arbor Day Festival, which Mullis described as “a great success.”

The next meeting of the board will take place at 6 p.m. May 16 at Norwood Town Hall on South Main Street.

Toby Thorpe is a freelance contributor for The Stanly News & Press.