final briefing #1 rates and rate changes fy 2007-2010

7/30/2019 Final Briefing #1 Rates and Rate Changes FY 2007-2010

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The Lumber River Council of Governments (LRCOG)has been working in the region since the fall of 2008 onseveral projects specifically aimed at providing strategic

technical assistance to communities in a seven countyregion. The region includes the LRCOG counties ofBladen, Hoke, Robeson, Richmond and Scotland. It alsoincludes the neighboring counties of Columbus andSampson which were identified in earlier water resourcework as counties that share common water resources.

Through the technical assistance provided, thecommunities in this seven county region, including thecounty governments themselves, have been able toconduct reviews of rates and rate structures, water loss,water efficiency programs, and have received support forexamining and pursuing regional collaborations This

Lumber River Council ofGovernments

Briefing #1:Water and Wastewater Rates and RateChanges in the Region FY 2007- FY2010


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of operating the systems and to reduce the gap betweensystem revenues and expenses. 1 As of the FY 2008

audit, 24 of the 63 systems -over a third - in this studyoperated in the red with expenses greater than revenuefor FY 2008. 2

Below is a summary of information on the changes inrates which were made by the systems in this sevencounty region from FY 2007 through FY 2010. Ratedata is taken from the information submitted by each ofthese utilities to the Environmental Finance Center (EFC)

located at the University of North Carolina. Each year,in collaboration with the North Carolina League ofMunicipalities (NCLM), the center collects rate datafrom systems across the State and makes that availableon their website. 3

This summary is offered separately for systems thatprovide water service only and those that provide bothdrinking water and wastewater (sewer) service. Given

the loss of manufacturing/industrial customers that onceaccounted for the majority water user in almost everysystem included in this study, the data presented is forresidential customers only as these customers likely carrythe system operations today.

Twenty six of the systems provide drinking wateronly This represents less than half (41 percent) of

The six Columbus County Water Districts make upthe majority of the systems that did not change rates

within the last year; in fact, rates in these systemsappear not to have been changed in the study period.The lowest water bill for 5,000 gallons per month toa residential customer in FY 2010 is $15.30 in theTar Heel Water Corporation in Bladen County; thehighest bill is $48.50 in the Sampson County watersystem.

0%

5%

10%

15%

20%

Percent Change in Charge for 5,000 GPMWater

Water-Only SystemsFY 2009 - FY 2010

FY 2010 Residential Charge for5,000 Gallons Water Per Month

Water-Only Systems


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system and connection to East Arcadia for drinkingwater and therefore had no comparative information.

In the four year period from FY 2007 to FY 2010rate changes ranged from 10 percent to an increaseof 88 percent for water service. The averageincrease over this period was 22 percent or $6.58.The largest increase, 88 percent, occurred in theTown of Turkey in Sampson County. The dollarvalue of that change was $11.84 over the four yearperiod.

Thirty seven (37) of the systems provide bothdrinking water and wastewater service. This is themajority (59 percent) of systems in the seven county

region.

The summary below examines the drinking waterand wastewater (sewer) sides of the operationsseparately and then in combination.

All but one system (97 percent) raised water rates

The lowest water charge of $12.25 for 5,000 GPM ismade by the City of Raeford located in HokeCounty. The highest water charge of $46.24 is madeby the Town of Chadbourn located in ColumbusCounty. The only system with a reduction in water

charges, Rowland, has the third highest watercharge among the 37 systems.

-10%

0%

10%

20%

30%

Percent Change in Water ChargeFY 2009 - FY 2010

Water and Sewer Systems

$30.00

$40.00

$50.00

FY 2010 Residential Water Charge at5,000 GPM



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The average increase over this period was 21percent or $3.87. The largest increase, 83 percent,

occurred in the Town of Chadbourn in ColumbusCounty. The dollar value of that change was $21.00over the four year period.

Thirty six of the 37 sewer systems (97 percent)changed rates last fiscal year. Rate changes from FY2009 to FY 2010 ranged from a decrease of 2percent in Rowland to an increase of 26 percent inParkton. For those that made a change, theminimum was 6 percent; the average was 12

percent. In dollar value, this 12 percent increaseequated to $3.12.

The average sewer bill across these 36 systems is$31.39 per month for 5,000 GPM.

In the four year period of the study, all of thesystems but Proctorville had a rate increase. In thefour year period from FY 2007 to FY 2010 ratechanges ranged from 0 percent (no change) to anincrease of 143 percent.

The average increase over this period was 35

percent or $6.22. The largest increase, 143 percent,occurred in the Town of Fair Bluff in ColumbusCounty. The dollar value of that change was $30.00over the four year period10%

20%

30%

Percent Change in Cost of 5,000 GPMSewer

FY 2009-FY 2010Water and Sewer Systems

$-$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

FY 2010 Residential Sewer Charge at5,000 GPM



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of Parkton in Robeson County at 26 percent. Theaverage increase between the two fiscal years was

12 percent. This translated to a $ 5.70 increase inthe actual amount of the average combined bill.

The system with the lowest combined bill in FY2010 is Rockingham at $26.05; the highest is theTown of Chadbourn in Columbus County at $95.74.The average combined bill for the 35 systems withincreased rates in FY 2010 was $55.27.

A chart following the progression of increase in thecombined bills over the four year period is shownbelow. The percent increase between FY 2007 andFY 2009 was 7 percent for each year. The increase

So what difference do these rate increases make for thecommunities that operate the systems?

First, we believe the operating positions of the water andsewer funds in systems where rate increases were madewill improve. All but two of the 24 systems operating at aloss raised rates between FY 2009 and FY 2010. Eightof those also raised rates the previous year FY 2008 and

FY 2009. The results of their FY 2009 and FY 2010audits will reveal how much of a difference the rateincreases instituted narrowed that gap between revenuesand expenses. We should caution that for several ofthese systems the increases did not keep pace withinflation or with the construction cost index. This can beverified on a system-by-system basis using the RatesDashboards on the website of the EnvironmentalFinance Center at UNC. Even with rate increases two

years running some systems are still playing catch-upfrom many prior years of no increases.

Many of the communities in this seven county regionhave kept rates, until very recently, artificially low. Partof this stems from a desire to not adversely affect thelower income segment of their populations. Part stemsfrom a carryover of rates from years gone by whereindustry was treated preferentially by a reduced cost forlarger volumes of consumption. With most water usingindustry gone from this region, this rate structure doesnot serve communities well when relying on theresidential consumer to carry the system financially In

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

Combined Charge for Water andSewer

FY 2010 ChargeSystems With Both Services


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have rates set at least at .75% of the adjusted medianhousehold income of their community. 4 For systems

with both water and sewer, the threshold is 1.5% ofadjusted median household income. Notable in theinformation gathered is that there is still a group ofsystems for which these rate increases are not sufficientto bring them to the State-established thresholds foreligibility for State grant funding for water projects.

All four of the water-only systems that still do not meetthe threshold have made rate increases in the past two

years. Nine of the systems providing both water andsewer service have rates that fall short of the 1.5%threshold. Eight of these have increased their rates atleast once in the last two fiscal year periods.

Finally, on a subject related to the rates themselves- therate structure adopted by the system- one systemchanged their rate structure from declining block to astructure that now qualifies them for State grant funding

per the conditions in the Drought Bill. The Town ofRed Springs both raised its rates and changed the ratestructure to an increasing block structure which willimprove the sustainability of their systems over time andaddress the deficit in the enterprise fund.

Fifteen (15) systems in the region still have decliningblock rate (DBR) structures. This rate structure preventsthe unit of local government from qualifying for Stategrant funding for water projects in accordance with the

provision of the Drought Bill, SL 2008-143.

capital or maintenance improvements, the system is thatone step ahead.

Systems that have made and continue to make theseadjustments will also find it easier to comply with thenew round of legislation adopted in the current sessionaffecting the operation of enterprise funds for water andwastewater.

Resources for addressing rate questions are availablefrom the LRCOG, the UNC Environmental Finance

Center, the Rural Water Association and from funders.

Please refer to the Table attached to select information onyour system and others in this region.

1 Enterprise Fund Statistics from the Office of StateTreasurer, website:http://www.nctreasurer.com/lgc/units/unitlistjs.htm.

2 Interviews with regional water/wastewater providers aspart of a report for the Rural Economic DevelopmentCenter to be completed September 2010.

3 The Environmental Finance Center at the University ofNorth Carolina at Chapel Hill, website:http://www.efc.unc.edu.

4 SL 2008-143- The Drought Bill NC General Assembly

[Date]
http://www.nctreasurer.com/lgc/units/unitlistjs.htmhttp://www.nctreasurer.com/lgc/units/unitlistjs.htmhttp://www.efc.unc.edu/http://www.efc.unc.edu/http://www.efc.unc.edu/http://www.nctreasurer.com/lgc/units/unitlistjs.htm


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FY 2007

Res WaterCharge at

5,000 GPM

FY 2008

Res WaterCharge for

5,000 GPM

FY 2009

Res WaterCharge at

5,000 GPM

FY 2010

Res WaterCharge at

5,000 GPM

Percent

Change FY2009 - FY

2010

Percent

Change FY2007 - FY

2010

FY 2007 Res

SewerCharge at

5,000 GPM

FY 2008 Res

SewerCharge at

5,000 GPM

FY 2009 Res

SewerCharge at

5,000 GPM

FY 2010 Res

SewerCharge at

5,000 GPM

Percent

Change

FY 2009 -

FY 2010

Percent

Change

FY 2007 -

FY 2010

FY 2011

Rate

Meets

.75% of

MHI forState

Grant

Rate

Structure

Prevents

Qualificatio

n for StateWater

Funding

FY 2008

Audit:

Operating

Expenses

Greater

thanOperating

Revenues

WATER ONLY UTILITIES

1 BLADEN COUNTY Water $ 27.40 $ 27.40 $ 29.40 $ 32.75 11% 20% Yes DBR

2 East Arcadia $ 25.50 $ 25.50 $ 25.50 $ 28.25 11% 11% Yes Yes

3Tar Heel (County Water)

$ 13.70 13.70 $ 13.70 $ 15.30 12% 12% No DBR

4 ROBESON COUNTY Water $ 20.25 $ 20.25 $ 24.05 $ 27.85 16% 38% Yes DBR

5Lumber Bridge (County

Water$ 20.25 20.25 $ 24.05 $ 27.85 16% 38% No DBR

6

Marietta (County Water)

$ 20.25 20.25 $ 24.05 $ 27.85 16% 38% Yes DBR

7McDonald (County Water)

$ 20.25 20.25 $ 24.05 $ 27.85 16% 38% No DBR

8Orrum (County Water)

$ 20.25 20.25 $ 24.05 $ 27.85 16% 38% Yes DBR

9Raynham (County Water)

$ 20.25 20.25 $ 24.05 $ 27.85 16% 38% No DBR

10Rennert (County Water)

$ 20.25 $ 20.25 $ 24.05 $ 27.85 16% 38% Yes DBR

11 RICHMOND COUNTY $ 30.25 $ 32.81 $ 32.82 $ 37.44 14% 24% Yes DBR

12Hoffman (County Water)

$ 30.25 $ 32.81 $ 32.82 $ 37.44 14% 24% Yes DBR

13Norman (County Water)

$ 30.25 $ 32.81 $ 32.82 $ 37.44 14% 24% Yes DBR

14SCOTLAND COUNTY

$ 24.00 $ 25.20 $ 24.00 $ 28.00 17% 17% Yes

15SCOTLAND COUNTY

$ 26.00 $ 28.60 $ 28.60 $ 28.60 0% 10% Yes

16COLUMBUS COUNTY-

$ 33.00 $ 33.00 $ 33.00 $ 33.00 0% 0% Yes

17COLUMBUS COUNTY

$ 33.00 $ 33.00 $ 33.00 $ 33.00 0% 0% Yes

18COLUMBUS COUNTY

$ 37.00 $ 37.00 $ 37.00 $ 37.00 0% 0% Yes

19COLUMBUS COUNTY

District #3$ 37.00 $ 37.00 $ 37.00 $ 37.00 0% 0% Yes

20COLUMBUS COUNTY

$ 33.00 $ 33.00 $ 33.00 $ 33.00 0% 0% Yes

21COLUMBUS COUNTY

$ 33.00 $ 33.00 $ 33.00 $ 33.00 0% 0% Yes

22 Sandyfield ** n/a n/a n/a $ 28.25 n/a Yes

23

SAMPSON COUNTY Water

S stem $ 43.65 $ 43.65 $ 43.65 $ 48.50 11% 11% Yes

24Autryville (County Water)

$ 37.00 37.00 $ 42.00 $ 47.75 14% 29% Yes

25Harrells (Harrells Water

unknown 26.00 $ 26.25 $ 30.00 14% Yes

Water and Sewer Rates Summary Seven County Study Area

Source: UNC Environmental Finance Center Website


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26Turkey (County Water)

$ 13.47 22.45 $ 22.45 $ 25.31 13% 88% Yes Yes

PROVIDE BOTH WATER

ANDSEWER SERVICE

Bladen County

1 Bladenboro $ 14.40 $ 15.04 $ 15.04 $ 17.02 13% 18% $ 21.49 $ 22.44 $ 22.44 $ 25.37 13% 18% Yes DBR Yes

2 Clarkton $ 18.63 $ 18.63 $ 18.63 $ 21.38 15% 15% $ 24.25 $ 24.25 $ 24.25 $ 27.75 14% 14% Yes

3 Dublin $ 23.00 23.00 $ 23.00 $ 26.40 15% 15% $ 51.20 $ 51.20 $ 51.20 $ 52.60 3% 3% Yes4 Elizabethtown $ 15.90 $ 16.37 $ 16.37 $ 18.49 13% 16% $ 22.35 $ 23.03 $ 23.03 $ 27.19 18% 22% Yes

5 White Lake $ 14.68 $ 16.68 $ 17.92 $ 20.67 15% 41% $ 21.56 $ 24.02 $ 26.06 $ 29.42 13% 36% NoRobeson County

6 Fairmont $ 25.58 25.58 $ 25.58 $ 27.66 8% 8% $ 27.98 $ 27.98 $ 27.98 $ 30.27 8% 8% Yes Yes7 Lumberton $ 15.22 16.71 $ 17.87 $ 20.52 15% 35% $ 25.13 $ 27.62 $ 29.56 $ 33.37 13% 33% Yes

8 Maxton $ 19.50 $ 19.81 $ 20.42 $ 22.31 9% 14% $ 21.45 $ 21.78 $ 22.45 $ 24.53 9% 14% Yes9 Parkton unknown 26.42 $ 27.22 $ 34.43 26% unknown $ 26.42 $ 27.22 $ 34.43 26% Yes Yes

10 Pembroke $ 14.11 14.80 $ 14.80 $ 17.79 20% 26% $ 22.82 $ 23.90 $ 23.90 $ 28.68 20% 26% Yes

11 Proctorville unknown 20.25 $ 20.25 $ 20.25 0% unsewered $ 25.00 $ 25.00 $ 25.00 0% No

12 Red Springs $ 18.54 $ 18.54 $ 19.46 $ 22.04 13% 19% $ 25.54 $ 25.54 $ 31.93 $ 35.88 12% 40% Yes Yes

13 Rowland $ 37.44 $ 23.93 $ 38.44 $ 37.63 -2% 1% $ 39.44 $ 33.43 $ 41.44 $ 40.63 -2% 3% Yes Yes

14 St. Pauls $ 15.25 $ 15.25 $ 18.25 $ 21.24 16% 39% $ 24.85 $ 24.85 $ 24.85 $ 27.05 9% 9% Yes Yes

Hoke County

15 Hoke County $ 26.50 $ 26.50 $ 26.50 $ 30.00 13% 13% $ 37.10 $ 37.10 $ 37.10 $ 42.00 13% 13% Yes16 Raeford $ 10.00 $ 10.00 $10.90 $ 12.25 12% 23% $ 14.00 $ 14.00 $ 15.26 $ 17.15 12% 23% No

Richmond County

17 Dobbins Heights unknown $ 32.81 $ 38.00 $ 40.80 7% unknown $ 22.25 $ 33.50 $ 38.50 15% Yes18 Ellerbe $ 11.35 $ 11.91 $ 11.92 $ 14.45 21% 27% $ 15.28 $ 15.28 $ 20.02 $ 23.21 16% 52% Yes Yes

19 Hamlet unknown 24.50 $ 24.50 $ 25.90 6% unknown $ 22.25 $ 22.25 $ 24.75 11% Yes Yes

20 Rockingham $ 12.35 13.05 $ 13.05 $ 14.85 14% 20% $ 8.90 $ 9.40 $ 9.40 $ 11.20 19% 26% No DBR YesScotland County

21 Gibson $ 25.63 25.63 $ 25.63 $ 27.52 7% 7% $ 19.85 $ 19.85 $ 19.85 $ 21.95 11% 11% Yes Yes22 Laurinburg $ 12.78 14.83 $ 14.83 $ 16.52 11% 29% $ 19.52 $ 21.60 $ 21.60 $ 24.19 12% 24% No

23 Wagram $ 23.10 23.10 $ 22.50 $ 25.00 11% 8% $ 25.00 $ 27.00 $ 27.50 $ 30.00 9% 20% No YesColumbus County

24 Boardman unknown 33.00 $ 33.00 $ 37.00 12% unsewered $ 27.98 $ 27.98 $ 30.27 8% Yes Yes25 Bolton unknown $ 17.50 $ 17.50 $ 20.00 14% unsewered unsewered unsewered unsewered n/a n/a Unknown Yes

26 Brunswick unknown 19.50 $ 19.50 $ 21.25 9% unsewered $ 45.70 $ 45.70 $ 48.45 6% Yes Yes

27 Cerro Gordo unknown 33.00 $ 33.00 $ 37.00 12% unsewered $ 27.98 $ 27.98 $ 30.27 8% Yes Yes

28 Chadbourn $ 25.24 28.24 $ 38.25 $ 46.24 21% 83% $ 28.50 $ 31.50 $ 41.50 $ 49.50 19% 74% Yes Yes

29 Fair Bluff $ 16.50 16.50 $ 16.50 $ 18.00 9% 9% $ 21.00 $ 24.00 $ 44.50 $ 51.00 15% 143% Yes

30 Lake Waccamaw $ 18.00 18.00 $ 18.00 $ 20.00 11% 11% $ 22.24 $ 22.24 $ 27.24 $ 29.48 8% 33% No Yes

31 Tabor City $ 13.50 $ 15.00 $ 15.00 $ 16.60 11% 23% $ 22.00 $ 32.50 $ 32.50 $ 35.50 9% 61% Yes

32 Whiteville unknown 9.00 $ 12.25 $ 13.75 12% unknown $ 22.10 $ 22.10 $ 23.30 5% No YesSampson County

33 Clinton $ 17.58 18.09 $ 18.30 $ 20.64 13% 17% $ 22.83 $ 23.75 $ 23.91 $ 26.23 10% 15% Yes34 Garland $ 14.00 15.00 $ 16.00 $ 17.50 9% 25% $ 26.50 $ 28.50 $ 30.50 $ 32.50 7% 23% Yes Yes

35 Newton Grove $ 22.00 22.00 $ 24.00 $ 26.75 11% 22% $ 28.00 $ 28.50 $ 30.00 $ 33.25 11% 19% Yes Yes

36 Roseboro $ 22.00 25.00 $ 24.00 $ 30.00 25% 36% $ 24.00 $ 27.00 $ 27.00 $ 32.00 19% 33% Yes Yes

37 Salemburg $ 18.00 18.00 $ 18.00 $ 20.00 11% 11% $ 23.50 $ 26.50 $ 29.00 $ 33.00 14% 40% No Yes


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final briefing #1 rates and rate changes fy 2007-2010

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