Smithfield’s aging water and sewer systems are wasting nearly $2 million each year, and now the town council is ready to raise rates to pay for repairs.
At a recent budget meeting, councilmen talked about raising revenue substantially, perhaps immediately or maybe over the course of a few years.
In Smithfield, water and sewer customers pay flat monthly fees, called the base charge, regardless of how much water and sewer they use. Customers then pay for the water and sewer they consume, essentially a few dollars for every 1,000 gallons.
If the town council opts to increase the base water charge, it could jump from $6 a month to $10 or $11. Alternately, the usage rate, now $4.08 to $4.74 per 1,000 gallons depending on the customer category, could climb to $4.16 to $5.67.
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Sewer would cost even more. The base charge, now $7.98 a month, could soar to $12 to $14. Sewer usage rates, meanwhile, could jump from $6.18 per 1,000 gallons to $7.79 to $8.59.
At the budget meeting on May 16, Gary Hartong of the Wooten Co. presented rate options to the town council. He said raising the base charges would generate additional revenue more reliably than higher usage rates.
On the other hand, government agencies that award grants and loans for water and sewer work prefer higher usage rates because they encourage conservation, Hartong said.
The biggest problem in Smithfield’s sewer system is that cracks in lines are allowing storm water to seep in, driving up treatment costs. The town pegs that additional cost at $1.64 million annually. Put another way, 64 percent of all water in Smithfield’s sewer lines shouldn’t be there. A consultant says the town needs to reduce that seepage by more than half.
On the water side, the town is losing about 7 percent of the water it pumps into its lines. While that adds up to $270,000 a year, the percentage isn’t all that high for a town the size of Smithfield, Hartong said.
To correct the problems, Smithfield is facing about $5 million in capital needs for its water and sewer systems. But current revenue won’t generate that money, and the water and sewer departments can’t easily take on more debt; together, their loan payments are already $875,000 annually.
All of that means the water and sewer department needs cash from their customers. Together, water and sewer charges bring in about $5.27 million every year. Harton said annual revenue needs to reach $7.89 million in the next few years if the department hopes to meet its capital needs.
Abbie Bennett: 919-553-7234, Ext. 101; @AbbieRBennett