PILOT MOUNTAIN — With a public hearing on the town’s proposed 2014-15 budget looming Monday, commissioners again rejected proposed water and sewer rates for Pilot Mountain and questioned a proposed solid waste collection fee Wednesday during a budget workshop.
After meeting for 90 minutes in open session Wednesday with no answer as to what the board wants to do about the water and sewer rates, Mayor Earl Sheppard took the blame for the budget not being ready for Monday night’s meeting because he had been out of town for three weeks. The board typically approves the budget in its late-June meeting.
If commissioners choose not to do so Monday, they must adopt an interim budget to operate under when the new fiscal year starts on July 1 until they can agree on final budgets for the general fund and enterprise (utility) fund, according to Town Manager Amanda Reid.
After discussing last week the proposed rates for water and sewer which Reid proposed, and deciding they would not raise the combined rates as high as suggested, the commissioners asked Reid to bring back to them a new rate structure that would still cover the town’s expenditures but not raise rates as much.
An in-town resident now pays $21.82 per month for water and sewer combined at a usage of 0 to 2,000 gallons, and $46.60 a month for 2,001 to 7,000 gallons.
Commissioners, even before Reid came on board as town manager, were researching changing the rate structure to a per-thousand-gallon tier rate system.
Reid’s proposed budget included that tier system at $5.85 per-thousand for water and $5.95 per-thousand for sewer, in addition to a $7.50 base fee for each utility.
At that rate, the bill for someone using 5,000 gallons of water would increase from $46.60 per month to $74.
On Wednesday, a new chart was provided showing a breakdown of how many customers used water at different levels, in 500-gallon increments from 500 and less up to 50,000 and more. And Reid proposed two new tier structures.
The first rate system would charge a $15 combined base fee for water and sewer and then add $5.65 per-thousand. This would mean a person using 500 gallons a month would actually see the bill decrease by $1.17, while someone using 5,000 gallons would see the bill go to $71.50, a $24.90 increase.
The second rate system would charge a $20 combined base fee that includes usage from 0 to 1,500 gallons and then everything more than 1,500 gallons would be assessed a $5.65 per-thousand gallon rate in addition to the base fee. This means the person using 500 gallons would be charged $20, a $1.82 decrease from the present rate. The 5,000-gallon customer would be charged $63.60, a $17 increase.
Sheppard’s concern was “even if you look at $15 or $20, you are looking at double-digit increases.”
He said if the board adopted the original proposed utility rates, his monthly bill would rise from $92 every two months to $160. “That’s over 50 percent,” he said. “While it would put warm and fuzzy in our budget, we know that’s why we can’t do that.”
“We have three (sewer) pump stations we are having issues with, the HVAC is out (at the wastewater plant) and the truck has broken down, so we don’t know our costs for that yet,” said Reid. She explained that the town will start the new fiscal year $9,000 in the negative due to the HVAC repair.
She also presented projections for the end of the 2013-14 fiscal year, which showed an enterprise fund balance of $117,000, but noted that the town will end the year with expenses higher than revenues. So an estimated $40,000 to $45,000 will be taken from that fund to balance the budget.
“Our goal is to provide safe, affordable drinking water. The problem is we haven’t been carrying our costs and we have debt service,” Reid said, noting that interest payments are as high as the principal payments with one of the debt service bills.
Sheppard pointed out the board has increased the rates the past three years — last year 4.5 percent, and 10 percent each of the two years prior.
“We should be covering our operating and debt service expenses, setting aside for capital expenditures and setting rates to qualify for grants,” Reid said. The town’s rates as they are do not meet grant funding requirements. “We need to be proactive instead of reactive.”
One possibility Reid has examined is installing an alarm system for wastewater pump stations. If there was an overflow or other issue at a station, it would set an alarm off in the office. Personnel would only need to check the stations once a week instead of daily, which would save a lot of man-hours.
“So will these rates cover everything you talked about?” asked Commissioner Cordie Armstrong.
“We would have to re-evaluate six months into the year,” said Reid. “There are some changes I hope will impact in a positive way.”
She said she will be looking into refinancing the debt service to get lower interest rates without prolonging the payments too much. Also, she wants to build an email contact list of customers so reminders can be sent when payment deadlines are nearing and for cut-offs in hopes of curtailing the delinquent accounts the town has been seeing.
“If you look at our water and sewer rates compared to areas around us, we are right in the middle, and that’s where we want to be,” Sheppard said.
“I know where you want to get us to,” the mayor said of Reid’s mission to have the system making money.
“Is there any end to these increases to get where we need to be?” asked Commissioner Dwight Atkins.
Reid said the two new proposed rate structures only cover operations, maintenance and debt service, and do not account for any future capital projects.
“We have five days, I need more guidance,” Reid advised the board. “It would be challenging to reduce that budget anymore.”
Garbage fee questioned
While the solid waste collection fee was not addressed at last week’s budget work session, it was brought up Wednesday by the mayor.
Sheppard questioned a proposed $6 per month solid waste collection fee in the general fund, which Reid explained is to offset the $10.79 charged by Waste Management to the town per customer each month.
“If we start paying for trash pickup, what is our taxes paying for?” the mayor asked.
“Police, streets, bulk item pickup, brush pickup, town hall administration, the library, economic development, downtown development,” Reid listed.
“We are not having a tax increase, but we’ve got to balance the budget,” she said. “If you don’t want me to do that, then tell me where to get the money from.”
Atkins said, “We are for solid waste not costing that much, I’d rather just leave that alone.”
“Then where do we get that money?” asked Reid.
“We are wrestling with the enterprise fund, I guess we have to wrestle with the general fund, too,” Atkins said.
“I have to look back at this,” Sheppard said of the budgets.
The mayor said the discussion will continue Monday at the board’s regular monthly meeting at 7 p.m.
Wendy Byerly Wood may be reached at 336-835-1513 or on Twitter @wendywoodeditor.