East Spencer delays decision on rate increases
EAST SPENCER — After much discussion and debate, the East Spencer Board of Aldermen decided to wait before agreeing to increase the rate for water and sewer and landfill charges.
The board held a public hearing Monday to discuss the proposed changes, which would see an 8 percent increase. Only one resident, Ethel Evans, spoke about the potential changes.
Evans was opposed to an 8 percent increase, but said if there had to be an increase then she’d rather it be somewhere around 4 percent.
The increase would see the water rates go up to $7.29 from $6.75. The sewer rate would increase from $6.75 to $7.29 and the solid waste collection fee would increase from $16.33 to $17.50.
The board made no final decisions but decided to have a special meeting Aug. 19 at 6:30 p.m. at town hall to further discuss the matter. The board would then take a vote at its September meeting.
Town Administrator Macon Sammons said there has not been a change in the billing cost since 2009. In previous years the town absorbed the cost of some rate increases from Salisbury for water and wastewater treatment. The town used money from the general fund to offset the insufficient funds from water and sewer.
Alderwoman Tammy Corpening emphatically made it known she could not vote in support of a rate increase. Alderman John Noble also said he could not in good conscience vote for an increase.
Sammons said if there were money available somewhere in the budget then he would not have recommended a rate increase.
Alderwoman Phronice Johnson was opposed to delaying the decision. She was in favor of the increase.
Johnson asked what other solution the board had.
“Y’all know we don’t have any other finances coming in,” Johnson said. She said there was no other choice.
“As of now, until we can think of a solution, we’ll have to go into the general fund. We don’t want to get into the red again,” Johnson said.
A number of factors are pushing costs higher, town officials said. Those factors include rate increases imposed by the city of Salisbury for water and wastewater treatment, loss in volume of water sold, increases in lost water due to leaks and continuing issues with collection on active water and sewer accounts.
The water and sewer fund was supposed to repay the general fund $64,400 in fiscal year 2014 but was unable to do so because of insufficient revenue. The general fund had to loan water and sewer another $50,000 in order to make the June 2014 debt payment.
This means the general fund is out $114,400 that had been anticipated from water and sewer, had the funds been available.
The rate increase is needed to sustain the general fund and the water and sewer fund. It is expected to produce $61,700. However, the recommended increase would still only recoup about half the water and sewer fund shortfall to the general fund.
Town Attorney Jeff Morris said legally there’s a requirement for the water system to be self-sustaining. He said at the current rate, the water system is not projected to be self-sustaining.
Morris said a vote against a rate increase means 2015 would be the third year the town would have to use the general fund to pay for water.
“You can’t keep borrowing from one fund to satisfy another,” Mayor Barbara Mallet said.
Mallet said some money should be coming in once the public works and representatives from North Carolina Rural Water Association continue to work with the town to determine its losses from leaks in the water system.
Contact reporter Shavonne Potts at 704-797-4253.