Water and sewer service may get more expensive in Raleigh this year, the next year, the year after, and so on, perhaps through 2019.
The Raleigh City Council now is considering the first of those hikes, which also will affect Garner and Rolesville. Scheduled for July, the initial increase would add about 7 percent to a typical Raleigh residential bill, or about $3 on the average $49 monthly charge.
The reason Raleigh needs the money is a bit counterintuitive. Basically, Raleigh convinced its residents to use less water during the catastrophic drought of 2007 to 2009. Lower water usage means lower revenues for the system.
“The reality is that if ... you ask your customers to buy less of your product, and you want to stay whole, you’re going to have to raise rates,” said John Carman, public utilities director for Raleigh.
While Raleigh has added thousands of water customers in the last five years, the city as a whole consumed less water in 2014 than in 2010. That’s probably because appliances are getting more efficient, and because the city raised rates during and after the drought.
The effect is in one way beneficial, allowing more time before the city has to find more water sources. In fact, the city intentionally introduced “tiered” prices after the drought to punish high water usage. Lower usage is rewarded with lower prices per gallon.
Some costs fixed
But the cycle’s vicious too, because the water system’s not getting cheaper to run, no matter how much water is saved.
“We have to run the plants 24/7, 365, regardless of whether customers are using a lot of water or a little water,” said Robert Massengill, assistant utilities director. Only 10 percent of the city’s costs – power and treatment chemicals, mostly – can change with demand.
Raleigh also needs to pay for upgrades and repairs. The city’s oldest pipelines date to at least the 1880s, and they’re straining to serve a booming downtown.
“We’re seeing redevelopment in areas where our pipes are oldest and in the worst condition,” Massengill said.
The net result is that Raleigh residents already are paying more money for less water. The average consumer uses 37 percent less water now than in 2007, and pays twice as much for each gallon.
Details of hikes
The Raleigh City Council would have to approve the new hikes as part of its yearly budget, which goes into effect this July.
The increases would add 6 percent to each of three billing rates, which are assigned based on how much water a consumer uses.
The city also will consider increasing associated monthly fees from $3.25 in total to $4.50 for all accounts, and a relatively small increase on a surcharge that pays for watershed protection.
The council gave the idea a mixed reception, voting 6-2 to endorse – but not enact – the idea of a rate hike.
“We’ve come up with a very complete model that looks at this over a number of years,” Mayor Nancy McFarlane said at a meeting this week.
Council members John Odom and Eugene Weeks dissented. The council also delayed consideration of the watershed surcharge.
“We have reduced the usage on individuals, but I do think it comes back hard on our lesser economic people,” Odom said.
City staff are drafting a program that would help people who fall behind on their bills.
Down the road, the utility expects to ask for a series of further annual rate and fee hikes through 2019. If approved, the projected increases would raise average bills by a total of about $17, or 26 percent.