A study of Elizabeth City’s water rates proposes a combined 32% increase in water and sewer rates for city customers.
Alicia Melton, a technical assistance manager for the nonprofit N.C. Rural Water Association, presented the findings of her study at last week’s City Council work session. Council took no action on Melton’s presentation.
Rural Water’s study proposes a 22.06% increase in the city’s water rate and a 10.37% increase in the sewer rate. A family living in a single-family residential home could see a nearly $20 monthly increase in their utility bill.
“That would increase their combined water and wastewater bill by $17.07 if they used 5,000 gallons,” Melton said.
For residents living in smaller residential units that consume about 2,000 to 3,000 gallons a month, the increase in their utility bills would amount to as much as $12 a month, Melton said.
According to Melton, she compiled the study using some data from the city’s 2022 financial audit, which was submitted to the Local Government Commission on April 14, and information from the city’s billing and utility departments to determine the amount of revenue the city will need in order to accommodate infrastructure growth over the next five years.
“This rate study is pretty much an accurate snapshot of now,” she said. “Given the fact that you all have a lot of development that’s permitted, under construction, other permits waiting to be approved and future growth over the next several years, what we did is try to incorporate a conservative number to show what the projection looks like with growth incorporated into the study.”
The study also factored the capital reserve amount that’s equivalent to the depreciation that was noted in the 2022 audit, which amounts to around $2.3 million between water and wastewater services, Melton said.
“So, this is again if you were putting money back to reserve and you were investing in capital at the same time, what would that take to cover that cost?” she said.
Based on that scenario and accounting only for inflation over for the fiscal years 2025 through 2029, the city’s expected water expenditures will grow from $7.4 million to $8.9 million, Melton said.
“That’s conservative inflation I would say,” she said.
Melton also suggested ways the city could increase revenue from water and sewer without increasing customers’ rates.
“In Elizabeth City, there is a lot of low-hanging fruit to where if you tightened up on some policies and implemented a few changes you can increase you revenue without increasing your rates,” she said.
For example, the city could conduct a water meter replacement or calibration program to update aging meters.
“If you think about your meters being a cash register for your town, for water and wastewater, if they’re not registering accurately, you’re losing money,” Melton told council.
Another of Melton’s suggestions had to do with the city’s base rate of $48.21 for water and sewer services. The base rate includes the first 1,000 gallons consumed by the customer.
If a single-family residence uses 5,000 gallons in a month, the city only bills the customer the base rate, plus the cost of 4,000 gallons of water. According to Melton, the city bills customers $7.42 per 1,000 gallons of water consumed but only for the water used after the first 1,000 gallons.
“There’s a real cost to that 1,000 gallons,” she said. “In one year for water, based off of the numbers for 2023, in one year you gave away 77.07 million gallons.”
According to current rates and data from 2023, that would have generated about $571,908 in additional revenue in the 2024-25 fiscal year, according to Melton.
“Based on the policy of giving away the first 1,000 gallons, incrementally over the next five years, you’re looking at a potential loss of revenue of $3.1 million,” she said.
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