Rhodhiss water costs drowning town budget

Mar. 21, 2014 @ 08:37 AM

Rhodhiss town leaders already have voted to increase water and sewer rates by 30 percent, but rates might need to go up a lot more than that.

A 30 percent increase only places a Band-Aid on a gaping wound, Town Clerk Diane Eckard said, because an increase totalling about 60 percent is needed for the revenue to break even with water and sewer expenses. That size increase would bring the average bill, for 4,000 gallons a month, from the current $62 to more than $100.

Town officials decided to hold off any further decisions about rates until after the town applies to the N.C. Department of Environment and Natural Resources for a Community Development Block Grant to cover about $3 million in needed repairs of water and sewer infrastructure.

But there is just $10 million in grant money available, and it is unlikely that any town is going to get $3 million of it, said Sherry Long, community development director for the Western Piedmont Council of Governments. Long assists local goverments in moving through the CDBG application process.

Currently, the rates and fees paid by town residents come to about $230,000 a year, but expenses for the current year are projected to be more than $100,000 over that amount, according to the 2013-14 budget. To make up the difference, the town will have to draw $90,000 from its dwindling reserve fund and get the rest from a small, one-time planning grant, interest from the water and sewer fund, and reconnect charges.

Eckard told the board on Tuesday, “You can’t keep doing that. The only way to increase that revenue is to increase the utility bills. And you don’t want to do it any worse than I do. But I don’t know that you have an alternative.”

The reserve fund, which currently has about $130,000, is supposed to be used for town emergencies, not water and sewer maintenance. The preliminary draft of the fiscal 2014-15, written before the decision to raise rates, originally called for using $120,000 of it.

Rhodhiss' grant application will compete against other applications, which are due by April 1. There also will be another round of grants, totalling $15 million, with applications due May 1.

The town's water and sewer needs include replacing several sewer lines, repairing 35 manholes, meter upgrades, and water line improvements, according to the collection system assessment repair estimate. The needed sewer repairs are estimated to cost about $1.6 million, and the water repairs about $1.5 million.

When evaluating grant applications, state officials are “looking for documentation of need, and documentation that the area being served is predominantly low-income families,” Long said. Each application gets a score in a number of categories, including economic need, poverty level, severity of need and water loss. The total scores determine the priority of the applications.

The state also takes into consideration how much a municipality has done on its own -- using its own finances -- to fix its problems, and Eckard worries the town has not done enough.

“They want to see that you are making an effort to improve things. One thing that concerns me is most of what has been done here, though, has been done with grants,” Eckard said. “On our own, putting our big-boy britches on and doing it on our own, we’ve done nothing.”

One of the problems needing to be addressed is that storm water and ground water make their way into the sewer lines, which means more sewer water is being sent to a treatment plant run by Burke County than town residents are producing. The town is charged by Burke for how much is sent, and it is charged an extra fee every day that the volume exceeds a certain limit.

As public works employee Dale Hawkins described it, the extra water flowing into the sewer pipes is equivalent to leaving a faucet running all day. With the new infrastructure, only residents’ sewage will flow through to the treatment plant.

A public hearing about the CDBG application and the water and sewer problems is scheduled for Tuesday at 5 p.m. in Rhodhiss Town Hall.

Town Manager Barbara Harmon said, “We want them to understand it and come out and ask questions, so we can explain why it has to be like this.”