Smithfield might hike the base fees water and sewer customers pay each month.
The topic came up May 19 as the Town Council took its first look at a draft budget for fiscal year 2015-16. The town has not raised the base rates in years, and they are significantly lower than those charged in most neighboring communities, said Pete Connet, interim director of public utilities director.
Smithfield currently charges water customers a base fee of $5.47 a month if they live inside the town limits and $10.94 per month if they live outside. Respectively, those fees are $5 and $9 in Selma; $10 and $19.85 in Clayton; and $10 and $12 in Benson. Johnston County charges $15 a month for residential water meters up to one inch in size.
Smithfield’s base fee for sewer service are somewhat less competitive, with in-town customers charged $6.98 a month and out-of-towners paying $13.98. Respectively, Selma charges customers $7.75 and $12.75; Clayton, $5.20 and $20.80; and Benson, $10 and $12. Johnston charges $20 a month for residential meters up to one inch in size.
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The council might also raise the rates it charges per 1,000 gallons used, Town Manager Paul Sabiston said, but raising the base rates has the advantage of providing a consistent stream of revenue.
“The base rate, that’s coming every month,” he said. “There’s no no ifs, ands or buts; that’s coming every month and is easy to budget.”
Sabiston recommended hiking the in-town base fees by $2 and the out-of-town fees by $4. Connet suggested the council consider raising the fees by as much as $5 and $10 each.
For each $1 that Smithfield raises its base fees, Sabiston said, the water department would generate another $68,000 a year, while sewer would gain $62,000. If the council went with the bigger hikes Connet proposed, that would bring in $340,000 a year in new revenue from water customers and $310,000 from sewer.
The extra money would help the town continue to tackle some large capital needs in the water and sewer systems without pulling as much money from savings, Sabiston said. The draft budget allocates $1.6 million for capital projects in the water and sewer fund, along with another $1 million for projects at the water plant.
Those needs, Sabiston said, include repairing and replacing old sewer lines, which have deteriorated to the point that storm water flows into the sewer system. That costs the town money because it has to treat the storm water as though it were sewage.
At the water plant, Sabiston said, the biggest needs include upgrading the water-intake system and dredging the reservoir.
“It’s kind of like putting shingles on your roof,” he said. “Some things just wear out, and that’s what we’re going through.”
The council also settled on a plan to curb the steeply rising cost of providing its employees’ health insurance.
To continue to offer the same health benefits next fiscal year, Smithfield would have needed to pay an extra $168,979. That’s a jump of more than 16 percent.
The council considered three methods of reining in the increase, and they debated the best way to mix and match those options into a fair but affordable plan. The three variables were: reducing the level of health benefits; requiring workers to pay for their own dental insurance; and pushing more of the cost to cover children and spouses onto workers who have dependents.
After an hour of discussion, the council decided to reduce health benefits and require employees to pay half of their dental care. Among other changes, the co-pay for a doctor’s appointment will jump to $35 from $25, and annual deductibles will increase 50 percent to $1,500 for individuals and $4,500 for families.
Assuming everyone chooses to keep dental coverage, that brings the town’s increased cost of providing benefits to $67,422 for fiscal year 2015-16.
The town currently pays about 40 percent of the cost to provide benefits to workers’ dependents, and many on the council said they would like to see that percentage go down.
However, a majority of councilmen felt it would be unfair to hit workers with a big increase with only a month’s notice. Employees who cover both children and a spouse would have paid about $3,000 more next year to keep their current benefits.
Councilman Perry Harris, who made the proposal that passed with unanimous support, said the council should begin working to update its dependent-coverage policy sooner than later.
“This is important,” he said. “We don’t need to be waiting until the last minute to be having these discussions next year,” he said.
Water, sewer base fees
The base fees Smithfield charges in-town water and sewer customers each month are lower than in most communities in Johnston County.
Smithfield might hike its fees July 1 to fund capital improvements.
Source: Town of Smithfield