Hillsborough charging water, sewer customers more this year, but cutting its tax rate
Update: The story was updated at 3:23 pm July 1, 2021, to reflect the board’s final vote on this year’s budget.
Hillsborough water and sewer customers will pay more to fund over $25 million in repairs and upgrades in this year’s adopted town budget.
The $25.6 million, 2021-22 operating budget restructures town positions, eliminating the human resources director/town clerk, public works director and fire marshal, and adding a facilities coordinator and two analysts.
It unfreezes a planning technician job that Town Manager Eric Peterson called “essential” for the restructuring to work and to prepare for planning director and Assistant Town Manager Margaret Hauth’s retirement in 2023.
Town employees will get a 3.25% raise.
The Town Board also made changes to in- and out-of-town water and sewer bills this year, reducing the monthly minimum usage by 125 gallons to 2,375 gallons of water.
The board increased the water rates by 4.5% — the first of three annual increases planned to pay for ongoing and pending projects. Sewer rates increased by 2% this year, with a 3% increase planned in 2022 and a 4% increase in 2023.
The Hillsborough town budget is available for review at tinyurl.com/2ns9ecce. The adopted budget took effect July 1.
Water and sewer projects
Hillsborough water and sewer rates are already some of the highest in the Triangle, with the typical in-town customer paying $57.37 a month and an out-of-town customer paying $111.87.
The rate increases have been planned for some time to pay for water and sewer system projects, including new fire hydrants and valves, water lines and water plant filters, and to complete the $14.5 million West Fork Eno Reservoir expansion.
The second-biggest project includes $10 million worth of maintenance, repairs and upgrades to the town’s wastewater collection system. The town also could pay $7 million to update the Eno River Pump Station, the largest of two sewer pump stations feeding the wastewater plant.
The town has decades-old facilities and equipment, including the Eno River station, which exceeds capacity during high flow, Peterson said. The station is “in such a state that an entirely new station must be constructed soon,” he said.
The Adron Thompson water and sewer facility on Dimmocks Mill Road also has “serious deficiencies” and could cost about $2 million to repair and upgrade, he said.
While the town could have $800,000 in American Recovery Plan Act money for the work, that’s not enough, Peterson noted, and there are over $5 million in critical repairs not yet funded, including for the U.S. 70 Business water main that carries emergency water from Durham.
Peterson recommended hiring a financial planner to examine how to best meet water and sewer needs. The town also is analyzing its water and sewer capacity, which will help determine where the town grows and provides services in the future.
“Those needs on top of the already large debt expenses for the wastewater treatment plant upgrade and the soon to be completed West Fork Reservoir expansion project put further pressure on Hillsborough’s already high water and sewer rates,” Peterson said.
Property taxes
The Town Board set a property tax rate of 58.7 cents per $100 in assessed value, a two-cent increase over the “revenue neutral” tax rate of 56.7 cents that Town Manager Eric Peterson had recommended.
The revenue neutral, which is determined following a countywide revaluation, ensures the town will bring in the same amount of money under new property tax values as it received based on the old values last year.
The town tax bill this year for the owner of a $300,000 home would be $1,761 — roughly $60 more than the bill would have been if Peterson’s recommendation were accepted.
Hillsborough property owners also pay a county tax, which was set this year at 81.87 cents per $100 in property value. That will generate an additional county tax bill of $2,456.10 for a $300,000 home.
The additional money will help the town implement and set aside money for its climate change and environmental sustainability initiatives, board members said.
A penny on Hillsborough’s tax rate brings in $150,000 for the town.
This story was originally published June 15, 2021 at 2:58 PM.
