Trying to cope with a $2.3 million loss in revenues because of recent plant closings,
Salisbury city officials are proposing a water-sewer rate increase for residential
customers of at least 8.84 percent. If approved, the average monthly bill for a residential water customer
will increase more than $3, from $34.85 to $37.93.
The news is worse for commercial
and industrial users. Commercial users will see an average water-sewer rate increase of
9.75 percent; industrial customers will pay 10.5 percent more.
The new residential rates could
increase by as much as 11.84 percent, if Salisbury City Council would approve a $3-million
project to replace raw water lines from the Yadkin River pump station to the city
reservoir off Ridge Road.
That’s one of the crucial
budget decisions council will have to make by June 30. The 1999-2000 fiscal year budget
begins July 1.
Meanwhile, under the category of
better news, City Manager David Treme said Tuesday that his tentative budget calls for
reducing the city’s property tax rate by 5 cents.
The reduction is possible because
of the city’s growth and the county’s recent revaluation of property, and many
property owners would still pay higher bills.
For example, a 5-cent reduction
would make Salisbury’s tax rate 57 cents per $100 valuation. The owner of a $100,000
home, who saw his property valuation increase to $120,000, would see his city tax bill go
from $620 to $684 despite the proposed tax-rate reduction.
If the same property owner’s
valuation increased by only $5,000, however, his city tax bill would decrease from the
current $620 a year to $598.50.
Treme said he would call the
upcoming general fund budget – separate from the self-supporting utility budget
– a neutral, no-tax-increase budget. Council will receive Treme’s budget
presentation June 1 and follow that up with a budget work session at 4 p.m. June 14.
Treme predicted that the general
fund budget will be fairly straightforward. Last year, the city had a 4-cent increase on
the tax rate, per $100 valuation.
‘‘There’s not going
to be the multitude of issues that we had the last time,’’ Treme said.
The water-sewer budget won’t
be as easy.
‘‘Things change, and we
have to react,’’ Treme said.
With the closings of Cone Mills,
Frito-Lay and American and Efird, Salisbury’s water-sewer utility faces a 15.5
percent loss in revenues, or $2,324,000. The closings meant a 19.8 percent loss of water
consumption and 16.5 percent loss of sewer consumption.
Before the losses, the utility
already expected to ask for at least a 6 percent rate increase effective next January.
With the revenue losses, the utility faced a 21 percent rate increase until it identified
some savings and delays to capital projects for 1999-2000, according to Financial Director
John Sofley.
Utilities Director John Vest said
the decrease in demand will allow the city to push back and reconfigure about $29.1
million in water-sewer capital projects during the next five years.
The city originally planned to
expand the water plant’s treatment capacity to 18 million gallons a day by 2003. That
goal, because of the decreased demand, will be pushed back to 2005, Vest said.
Overall, the utility arrived at
the suggested rate hike by finding operational and maintenance savings, changing the
timing of capital projects, changing the timing of rate increases, using some cash
reserves, scaling back water-sewer extensions and reducing debt service.
Utility rate increases usually
take effect in January, but this one would be effective July 1.
The water customer losses will
have the effect of reducing the utility department’s budget from $14,880,000 to
$13,486,000.
High-volume water users will bear
the biggest burden of the rate increase, and Mayor Pro Tem Paul Woodson said that
concerned him. The average industrial customer’s bill will increase from $383.79 a
month to $424.09. A commercial customer will see its average bill increase from $131.24 a
month to $144.04.
‘‘I think it’s
going to catch up with this country some day,’’ Woodson said of the increasing
utility burden on private sector employers.
Of all the projects that have been
pushed back, Vest and other members of the utility department made their pitch for keeping
the $3 million waterline replacement project in the coming year’s budget.
But doing so would increase rates
even more.
Two existing lines transport raw
river water from the pump station to the reservoir. One line is a 16-inch cast iron pipe
that was installed in 1917. The other line is a 20-inch pre-stressed concrete pipe
installed in 1954.
The utility department wants to
replace those two lines with one new, bigger pipe. If the existing pipes ever fail –
and they require repairs on occasion – it severely threatens the water supply. The
Ridge Road reservoir has about a three- to four-day supply of water for the city.
‘‘We do see this as the
weak link in our water supply,’’ Assistant Utilities Director Barrett Lasater
said. ‘‘That’s the way we get water into town.’’
Treme asked council Tuesday to
consider the project as it prepares for the budget.
‘‘This is a judgment
call,’’ Treme said. |
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