02/22/09 — City expects water rate increase this year

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City expects water rate increase this year

By Anessa Myers
Published in News on February 22, 2009 2:00 AM

Water rates in Goldsboro might increase come July, as Goldsboro officials try to compensate for a possible $721,206 shortfall in the city's utility fund.

Goldsboro Finance Director Kaye Scott told City Council members during the last day of their annual retreat on Thursday that the city may see the drop at the end of this fiscal year ending in June.

The utility fund is the fund used to operate the city's water and sewer services, and most of the revenue in that fund comes from city residents paying their water and sewer bills.

But Ms. Scott said that in the weakened economy, families just don't have the money, even for the necessities.

"People can't pay their bills," she said. "They are losing their jobs. People are falling on hard times."

She said that about 100 people are being cut off from water and sewer service every week. If residents don't pay their bills two months in a row, the city will cut off the service.

But she said she has been trying to work with people who are struggling but still working to pay their bills.

"I will work with them for five days," she said. "But I let them know that after that, we will have to cut them off."

Revenue collections for water services were projected to hit $4.8 million this year, but Ms. Scott said she expects to see only $3.9 million of that to be collected. Last year, revenues didn't make the mark, either -- $4.3 million was expected and $3.7 million was collected.

The trend will likely get worse as the years go on if city officials don't make a change, Ms. Scott said.

In the fiscal year 2009-10, the difference in revenues and expected collections is projected to be $979,000. In fiscal year 2010-11, that difference rises to $1.06 million, and in 2011-12, it grows to $1.18 million.

Currently, the utility fund as a whole is around 92 percent self-sufficient, Ms. Scott said. Revenue collections in the fund are expected to be $14 million total for both water and sewer services, but $15.8 million will likely be spent. Even with more than $500,000 worth of financial help expected from the government and $555,788 that was already expected to be taken out of the fund's balance, Ms. Scott told officials that they should be ready to take out more than $720,000 more from the balance.

To reach 100 percent self-sufficiency, the council would need to increase water rates by 18.37 percent.

"That would be about $2.84 more a month on the average family's bill," Ms. Scott said.

But there are two items that draw the fund's self-sufficiency level down -- annexation loan payments of $400,000 a year so the city can provide water and sewer services to the recently annexed area on Buck Swamp and Salem Church roads and the money needed for future improvements on the 52-year-old water plant, which should be about $2 million a year, Ms. Scott said.

To accommodate for the added annual payments, a larger rate increase would need to be made, the finance director added.

Even if the rate went up, Goldsboro residents' water bills would likely be lower than those of residents of Wayne County, Fremont, Fork Township, Kinston and Mount Olive, she pointed out.

The Rev. Charles Williams told his fellow councilmen that he would hate to raise any utility rate when so many people are struggling to make ends meet. But Public Utilities Director Karen Brashear told the council that she believes the city is "undervaluing" water.

"You have to treat this like a business. It's not good to be the lowest price," she said.

The council asked Ms. Scott to bring back a rate increase, and the monthly equivalent for an average family, that would include the annexation payments and money for future water plant upgrades when they began looking at the budget process next month.