The Smithfield Town Council has raised its base water and sewer charges and ordered an outside study of usage rates, suggesting that even higher utility bills could be on the horizon.
At a meeting on Jan. 14, the council voted 4-2 to raise the base charges for water and sewer to the levels recommended by the town’s finance and public-utilities departments. Town staff also recommended 5-percent increases in the usage rates for water and sewer; instead, the council ordered a rate study to help decide what those rates should be.
Aging infrastructure is driving up Smithfield sewage-treatment costs, with rainwater seeping into cracked sewer lines and making its way to the county’s sewage-treatment plant. Because of those treatment costs, the town had a $1.6 million shortfall in its water and sewer budget this past year. It’s a shortfall the council hopes to offset with the higher base charges.
In-town customers will now pay base charges of $9 monthly for water and $10 monthly for sewer. Those charges are up from $6.02 for water and $7.98 for sewer. On a percentage basis, the increases are 49 percent for water and 25 percent for sewer. Out-of-town customers will pay base charges of $15 monthly for both services.
The new charges will be effective with the March billing cycle. Councilmen Marlon Lee and Travis Scott voted against the increases.
Had the council done nothing, it risked losing a $1.4 million loan needed for improvements to the town’s sewer-collection system. Interim town manager manager Jim Freeman said he had notified the state’s Local Government Commission of Smithfield’s intention to raise the base charges. The LGC had threatened to withhold approval of the loan unless the council took action on water and sewer charges.
“The LGC staff presented you in a very good light,” Freeman told the council, referring to a recent meeting about the town’s loan request. “Your $1.4 million is approved.”
Interim public utilities director Pete Connet said the increases in the base charges would net the town $324,073.68 in the year ahead. That money will go toward paying off debt.
Last month, Connet recommended raising water and sewer usage rates by 5 percent, but the council has yet to act on that recommendation. If it did pass that rate increase, a household using 5,000 gallons of water and sewer a month would see its bill climb $7.60. That would net the town another $175,000.
At its meeting last week, the council set it would decide on usage rates after a rate study. The Wooten Company will complete the study by the end of May at a cost of $22,000. Though the vote unanimous, not everyone thought a rate study was necessary.
“I don’t like the idea of a rate study in this case, because we know what the water costs,” Councilman Emery Ashley said.
Drew Jackson: 919-553-7234, Ext. 104; @jdjackson