Vote due May 6 on Durham water, sewer rates

Apr. 19, 2013 @ 07:08 PM

City Council members have scheduled a May 6 vote on a Water Management Department request that they raise water and sewer rates by an average of 2.5 percent.

The request will help fund department operations and construction programs and is in line both with the fiscal 2013-14 budget guidelines that the council has established and a longer-term policy that favors small annual rate increases.

“The strategy hasn’t changed,” Water Management Director Don Greeley said.

The base charge for an in-town single-family home just for having water and sewer will rise to $13.17, up 67 cents from the current $12.50.

Greeley said the city’s charges for a customer’s actual monthly use of water will rise by a penny per 100 cubic feet, across all five of the tiers it uses to encourage conservation.

The parallel sewer-use rate is set to go up 8 cents for every 100 cubic feet.

Thanks to the tiered rates and the use of a volume charge, the percentage impact of the increases on any given home could vary sharply from the overall 2.5 percent average. The increase will generate about $1.6 million more in revenue than the current rates.

Water Management also is asking for City Council endorsement next month of increases in its capital-facility fees, which apply to initial hookups of new development.

For new single-family, the cost for water and sewer connections to the city system will become $2,578, versus the current $2,439.

That’s a 6 percent increase, but the department last raised capital-facility fees in 2010.

Annual inflation at last check was running at about 1.5 percent, based on March figures from the U.S. Bureau of Labor Statistics.

Greeley said Durham’s water rates are now under the average for similar North Carolina cities. Its capital-facility fees are also low compared to other communities in the Triangle.

The department’s and council’s preference for small increases in water and sewer rates each year is longstanding and stems from capital and maintenance planning.

Council members say they don’t want big, single-year swings in rates as major treatment-plant or line-repair projects come up on the schedule.

But a bill that surfaced in the N.C. House earlier this spring could have threatened that policy, administrators said.

Sponsored by state Rep. Tim Moffitt, R-Buncombe, it would have barred “enterprises funds” like the one that bankrolls Water Management from transferring money into other city accounts, and would have limited their ability to accumulate surpluses.

It counseled that any money beyond that needed for any single year’s operations and debt payments should be used to “lower rates” on services.

Finance Director David Boyd on April 10 advised Greeley, City Manager Tom Bonfield and Mayor Bill Bell that the bill’s provisions “would severely hamstring our ability to manage our utility.”

Boyd noted that there are “numerous reasons” to want flexibility in the handling of surpluses, including “the need to build up cash for large projects” to mix and match with borrowing.

The proposal drew attention from the N.C. League of Municipalities, which dispatched lobbyist Paul Meyer to talk to Moffitt. It reported Friday that the legislator agreed to convert the measure into a study bill that would have no immediate effect on the law.