Two Wilmington residents spoke out against a potential rate hike in water bills at a Cape Fear Public Utility Authority public hearing Wednesday, March 12.
The proposed increase would affect residential water and sewer rates, adding an additional $2.70 per month, or $5.40 for each bimonthly billing cycle.
In a presentation preceding public comments, chief financial officer Cheryl Spivey said despite a dip in water consumption, operational costs are expected to rise.
Spivey said in 2012, water consumption decreased by 4.2 percent and electricity usage increased by 6.7 percent. In 2013, water consumption declined by 7.3 percent with only a 1.7 percent decrease in electricity usage.
“That’s an illustration of how variable costs do not vary with flow,” Spivey said.
Three rate proposals were explained during the meeting. The proposal recommended by the authority’s staff and finance committee assumes water consumption will decline 4 percent in 2014, which would require a 4.4 percent increase in rates — 25 cents per 1,000 gallons for water and 55 cents per 1,000 gallons for wastewater.
Paul Czesak, a resident of Shell Road Village Drive, asked whether the increase was in line with basic business management principles like operational efficiency and cost control.
“As consumption goes down, the rate goes up. How does that match up with business 101?” Czesak said.
Hank Thomas, of Greenville Loop Road, offered an alternate explanation for declining water consumption.
“The reason consumption’s down is as simple as applying the math. We have high rates. We have nowhere else to get our water and sewer. What else are we going to do? Lower our consumption to keep the rate down,” Thomas said.
Chief communications officer Mike McGill said he understands the paradox in place.
“We don’t want people to waste water, but in the water and sewer industry, we do need you to use the resource because that’s our only revenue source,” he said during a March 17 phone interview.
McGill pointed to a study conducted by the University of North Carolina Environmental Finance Center that compared 372 utility companies across the state.
“They reviewed rates and put the results in an interactive dashboard that shows our rates are affordable, are in line with the state average, and that we accomplish responsible cost recovery,” McGill said. “People say we have high rates, but we don’t and the data shows that. It’s a third party point of view.”
McGill said a rate increase will help the authority fund system updates and accommodate the rising cost of fuel and energy. It will also counterbalance a drop in consumption, which was marked in July and August 2013 during peak irrigation season.
“I understand the reaction to asking for more money, but it’s an investment in our infrastructure and wastewater systems,” McGill said.
A vote on the rate proposals is slated to occur during the authority’s April board meeting. If approved, the increase would apply to bills prepared on or after May 1, 2014.
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