Bimonthly water and sewer bills will see a $5.40 bump beginning May 1.
The Cape Fear Public Utility Authority Board unanimously approved the 4.4 percent rate increase during an April 9 meeting at the New Hanover County Government Center.
The increase applies to water and sewer volumetric rates. New Hanover County and City of Wilmington water rates will increase from $3.42 per 1,000 gallons to $3.67 per 1,000 gallons. Sewer rates will increase from $4.21 per 1,000 gallons to $4.56 per 1,000 gallons. Fixed charges will remain static.
Nonresidential customers will see a $36 addition to bimonthly bills.
The increase is intended to offset losses expected in the 2014 fiscal year as a result of declining water consumption, a continuity of losses incurred during the 2013 fiscal year when water consumption dropped by 8 percent.
During a March 12 board meeting, three rate options to offset anticipated losses were presented to the board. Option B, recommended by the authority’s staff and finance committee, assumed water consumption would decline by an additional 4 percent in 2014 and called for a 4.4 percent rate increase.
CFPUA spokesperson Mike McGill said he understood why people are confused that rates need to go up if water usage is down.
“We’re not the typical industry when it comes to something like that. We are revenue neutral, so when our revenue goes down, it doesn’t change the services we have to provide. That’s where we have to turn to a rate increase like the one that was just approved,” McGill said.
Prior to approving the rate increase, CFPUA chief financial officer Cheryl Spivey explained to the board how the authority has operated the consolidated system for $7 million less than the county and city operated it.
At the end of the 2008 fiscal year, the city and county’s combined operational costs were $38.7 million. The authority’s operational costs at the end of the 2013 fiscal year were $31.3 million.
Board Chairman Jim Quinn saw the efficiency savings as an indication the authority was surpassing its intended duty to plan for and meet the needs of the community.
“It’s very rewarding to know that in addition to what I see as very good progress in the process of planning…we’re also doing a more efficient job. It’s a good result of all the hard work and progress we’ve made at this point,” Quinn said.
McGill agreed, adding that the authority has managed to make improvements while operating at a lower cost. He noted that investment in the sewer system’s infrastructure has reduced the volume of sewer spilled into the environment by more than 70 percent.
“We are operating at a budget significantly lower than the combined city and county budgets five years ago, yet we’re getting more done and we’re doing so while balancing the affordability of our rates,” McGill said.
This increase is the second time customers have seen a hike in bills in the last year. On May 1, 2013, the authority approved a 10 percent increase in bimonthly bills when a uniform rate structure was adopted.