Water and sewer rates on the rise

by Brian Freskos
Thursday, April 29, 2010

Water and sewer rates are on the verge of increasing 14 percent for all customers of the Cape Fear Public Utility Authority (CFPUA) in Wilmington and New Hanover County, officials confirmed this week.

Originally scheduled two years ago, when the CFPUA assumed water and sewer operations from the county and city, the increase—which becomes effective on
May 1—is two months early, a company spokeswoman said.

The acceleration is due in part to the fact that the CFPUA—acknowledging economic hardships—delayed a $4 increase in fixed charges by seven months in 2009. It now has to account for lost revenue to pay off bonded debt, much of which it inherited from New Hanover County and Wilmington when it took over in 2008, said Carey Ricks, the authority’s public relations officer.

"We opened our doors with $189 million in bonded projects," she said. "Payments are due."

But customer criticisms have not been completely restrained by that justification.

Backlash has continued over revelations that authority CEO, Matt Jordan’s salary is $162,500—up from $140,000 when he began two years ago, according to Burrows Smith, the board of directors’ treasurer.

Company officials have contended that the jump in salary was a contractually obligated performance incentive contingent upon Jordan meeting certain benchmarks.

Affirming the complexity of the incentive contract, Smith said he believes the increase contributed to the perception that Jordan’s jump in salary was a raise or a bonus given during tough economic times.

The board of directors entered the incentive agreement so it could vet Jordan after his first year on the job, Smith said. This year, Jordan turned down a warranted cost of living increase of 2.8 percent.

Still, it is unlikely the CFPUA will garner sympathy even though, like other industries in recent years, the authority eliminated 22 employees in its 2010 budget by slashing and freezing positions. The CFPUA is currently seeking more cost-cutting measures and more new customers, Smith said.

The CFPUA board of directors approved the implementation of the upcoming May increase two months in advance based on low revenue and agreements it struck with bonding agencies, Ricks said.

In 2008, the CFPUA took over and established a set of rate increases to ensure that bonded projects—like the $74 million Sweeney Water Treatment Plant expansion and more than $34 million in repairs and upgrades to the Northeast Interceptor—were paid for, officials said.

Ricks said 60 percent of CFPUA’s customers used less than 9,000 gallons every two months in 2009. Customers who use 5,000 gallons bi-monthly will see their bill rise from $63.20 to $72.05.

The increase does not affect the beach communities of Carolina, Kure and Wrightsville, towns which provide water and sewer services independently to their residents.

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