{"id":10754,"date":"2012-03-22T08:54:28","date_gmt":"2012-03-22T12:54:28","guid":{"rendered":"http:\/\/www.raleighpublicrecord.org\/?p=10754"},"modified":"2012-03-21T21:24:07","modified_gmt":"2012-03-22T01:24:07","slug":"recession-and-water-conservation-costing-wake-municipalities","status":"publish","type":"post","link":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/news\/city-council\/2012\/03\/22\/recession-and-water-conservation-costing-wake-municipalities\/","title":{"rendered":"Recession and Water Conservation Costing Wake Municipalities"},"content":{"rendered":"

The recession coupled with the 2008 drought has Raleigh\u2019s water merger communities taking a hard look at the cost of serving some of the city\u2019s 485,000 water customers.<\/p>\n

Starting in 1999, six Wake County towns began joining Raleigh\u2019s water system through a merger agreement. Each of the six \u2013 Garner, Rolesville, Wake Forest, Wendell, Knightdale and Zebulon \u2013 were already on the Raleigh water system to some extent.<\/p>\n

This week the Raleigh City Council voted to extend the payback period for Zebulon by three years and take back some of the capacity the town originally bought in order to reduce the town\u2019s debt to the City of Raleigh.<\/p>\n

Raleigh\u2019s assistant Public Utilities Director Robert Massengill said the merger agreement \u201callowed the towns to purchase additional water and sewer treatment allocation, which was financed by the city and paid back over time through the rate differentials.\u201d<\/p>\n

Each town purchased different amounts depending on anticipated growth. But when the recession hit in 2008, growth slowed, leaving some towns lagging behind both in debt payment and in the use of extra water and sewer.<\/p>\n

As the six water merger towns go, the rates vary. Raleigh and Garner pay about $44 a month because Garner has already paid off its debt to the city of Raleigh.<\/p>\n

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area water rates<\/p><\/div>\n

Among eastern Wake County towns, Wake Forest pays $53; the average bill goes as high as $84 in Zebulon.<\/p>\n

A portion of the water and sewer allocation each town purchased was earmarked for future growth. Since that growth has slowed, towns like Rolesville and Wendell have given back some of their unused water and sewer, offsetting the remaining debt.<\/p>\n

But Zebulon Mayor Bob Matheny was reluctant to take this compromise. Growth has slowed now, \u201cbut we don\u2019t have a crystal ball,\u201d he said.<\/p>\n

Development will likely pick back up in the future and, when it does, Matheny said, \u201cif we give back our allocation, we\u2019ll have a higher buyback.\u201d<\/p>\n

Zebulon purchased its extra water and sewer, about 300,000 gallons per day, at $4 a gallon.<\/p>\n

\u201cThe price now is $7 a gallon and it is projected to go as high as $19 a gallon. If we can hold on to it, it\u2019s a truly valuable asset,\u201d Matheny said<\/p>\n

Raleigh city councilors, however, didn\u2019t agree.<\/p>\n

Matheny spoke to the council Tuesday, asking them to consider letting Zebulon keep its additional water and sewer while maintaining an already agreed upon three-year extension to pay off its debts for merging onto Raleigh\u2019s water system.<\/p>\n

The 300,000 gpd equates to a $1.33 million reduction in Zebulon\u2019s debt to Raleigh. But, as Matheny pointed out, \u201cIf we keep the amount, we can still pay it off in three years. If we give it back, we\u2019ll actually pay it off in two extra years.\u201d<\/p>\n

Though other towns have agreed to this, it isn\u2019t making up the difference completely.<\/p>\n

Last year, Rolesville water and sewer customers had a $5 surcharge added on to their bills to keep the town in line with its amended 2016 payoff date.<\/p>\n

Knightdale customers face steeper rate increases with a 9.25 percent rate increase set to go into effect this summer, which equates to an extra $5.82 a month on the average water bill.<\/p>\n

Wendell customers will see a 10 percent rate increase this summer, bringing average monthly rates for these customers to $73 a month.<\/p>\n

Wake Forest customers will see the highest percentage increase, with a 12 to 15 percent hike this summer \u2014 though those customers\u2019 rates remain relatively low among most merger communities at $59.60 a month. The high percentage increase for Wake Forest was due to recent improvements on the town\u2019s aging lines.<\/p>\n

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Although Zebulon\u2019s projected rate increase \u2013 5 percent in the new fiscal year that begins July 1 \u2013\u00a0 is much lower than Wake Forest or others in eastern Wake County, the town\u2019s current rate is already significantly higher than any other municipality and stands to go even higher at $88 this summer.<\/p>\n

The rate goes higher still for residents outside Zebulon town limits at more than $100 a month.<\/p>\n

\u201cWe all want the same goal,\u201d Matheny told the city council, \u201cto offer affordable utilities to our citizens.\u201d<\/p>\n

In the short term, giving back the unneeded water and sewer would be a debt relief for Zebulon, as Mayor Nancy McFarlane pointed out.<\/p>\n

\u201cWouldn\u2019t it be advantageous to take off the $1.3 million from your debt when you need it the most?\u201d she asked Matheny.<\/p>\n

\u201cIt\u2019s a bad time to be predicting what you need,\u201d he replied. \u201cIf I really feel we don\u2019t need it, I\u2019ll be the first one to stand up and give it back. We\u2019d appreciate the opportunity to get back in to a normal growth cycle and make decisions on firmer numbers.\u201d<\/p>\n

City Manager Russell Allen said the negotiations haven\u2019t been to Raleigh\u2019s benefit.<\/p>\n

\u201cAccommodations have been made \u2026 On our side, we feel like we did [work with them],\u201d he said. \u201cWe went through the options with them on our dime. Keeping capacity was important to all the municipalities. It\u2019s not fair to Raleigh customers to have them keep the capacity we don\u2019t project they need.\u201d<\/p>\n

Massengill said Zebulon and the other towns\u2019 capacity will increase periodically at a rate of about 3 percent every three years.<\/p>\n

\u201cThey wouldn\u2019t likely need [the 300,000 mgp] \u2013 maybe in 10,15 or 20 years,\u201d he said. \u201cI don\u2019t think they will likely need it in two years.\u201d<\/p>\n

Though 300,000 gpd is a small number compared to what customers in Raleigh, Garner and Wake Forest use, \u201cit will impact us today,\u201d Massengill said.<\/p>\n

\u201cThe future water capacity is going to cost more,\u201d he said. \u201cThe burden on the city is, when we have to provide the extra capacity in 10 to 20 years, it will be $10 to $20 million at the Little River Reservoir rate.\u201d<\/p>\n

But the prospect of paying more for water and sewer that Zebulon once had at a cheaper rate led Matheny to appeal to the Raleigh council, \u201cplease don\u2019t take advantage of your partners.\u201d<\/p>\n

The council ultimately sided with Raleigh staff\u2019s advice, voting 7-1 to have Zebulon\u2019s payback period extended three years to 2024 and have the town return the 300,000 gpd of unused water and sewer capacity.<\/p>\n

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<\/p>\n","protected":false},"excerpt":{"rendered":"

Zebulon tried and failed this week to strike a deal with Raleigh over the growing burden of its water merger debt costs.<\/p>\n","protected":false},"author":24046,"featured_media":10756,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4,15,23],"tags":[431,547,6,432],"_links":{"self":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/posts\/10754"}],"collection":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/users\/24046"}],"replies":[{"embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/comments?post=10754"}],"version-history":[{"count":0,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/posts\/10754\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/media\/10756"}],"wp:attachment":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/media?parent=10754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/categories?post=10754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/tags?post=10754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}