The Winston-Salem/Forsyth County Utility Commission approved today a 10 percent increase in water rates and an 11 percent increase in sewer rates, effective Oct. 1.
When the rate increase takes effect, the bimonthly water and sewer bill for the average household in Winston-Salem using 9,000 gallons of water will be $55.63 or 92.7 cents a day; last year the average household paid 84.6 cents a day.
Despite the increase, Utilities Director David Saunders noted that Winston-Salem continues to offer the lowest water and sewer rates among North Carolina’s largest cities. Currently the estimated average bimonthly water and sewer bill with a consumption of 9,000 gallons is $79.24 in Greensboro, $68.08 in Raleigh, $83.06 in Charlotte, and $95.59 in Durham. "Each year we try to balance our obligation to provide safe and reliable services while keeping our rate increases unsurprising and gradual for our customers," Saunders said.
Under the rate structure adopted by the Utility Commission last year, customers will continue to be rewarded for their efforts to reduce their water usage. Smaller usage is billed at a lower rate. As usage increases, so does the cost of water.
"Given this current economic environment, we have cut departmental expenses and reduced our costs so our customers receive the lowest possible rate increase," Saunders said, "and the increasing-tier rate structure that went into effect last year gives customers the ability to directly affect their bills by using conservation methods."
Saunders said that the rate increase was considered only after it was determined that the current rate structure would not generate sufficient revenue to meet operational and capital project financing needs and would not cover current and long-term liabilities and debt obligations. "The economy has had a two-fold impact on water and sewer usage demand" he said. "Growth has been less than anticipated and the overall demand is lagging behind previous years."
The rate increase will help pay for necessary updates and maintenance of the Utility Commission’s treatment and distribution systems and recover the revenue requirement associated with annual capital expenditures. Water mains, sewer lines, valves and pumps are reaching and or exceeding their life cycle and the commission is facing the need to replace them. "At the same time, we are facing the need to replace 50- to 100-year-old facilities to comply with current and future regulations, as well as maintain capacity for our customers," Saunders said.
The commission is rebuilding the R. A. Thomas Water Treatment Plant at a cost of $55 million and is in the midst of $52 million worth of improvements to the Archie Elledge Wastewater Treatment Plant. Aging portions of the Neilson Water Treatment Plant also must be replaced.
The rate increases and surcharges are contained in the $67.2 million operating budget the commission approved for fiscal year 2010-2011. The budget includes $40.4 million for operating costs and $26.8 million debt service for revenue bonds.
For the second straight year, the Utility Commission is not increasing charges for water and sewer assessments or connections for new customers. The water and sewer system operated by the Utility Commission continues to be one of the most economical systems in North Carolina, based on its bond ratings, operating record, rate structure, and supply of raw water.