Thursday, May 30, 2024

114 West Elm Street
Graham, NC 27253
Ph: 336.228.7851

Council adopts expedited water/sewer budget with May 1 rate increases


Graham’s city council held a special meeting Monday night, in order to expedite consideration of city manager Megan Garner’s water and sewer fund budget, including significant water and sewer rate hikes.

While the budget itself will take effect at the beginning of the next fiscal year, July 1, the water and sewer rate increases were made to be effective this Sunday, May 1.
Monthly rates will go up between roughly $5.00 to $10.00 per month, for households us

ing between 1,000 to 5,000 gallons per month, representing increases ranging from 5 percent to 38 percent, according to materials presented to city council members. [See accompanying chart, derived from figures presented at the council meeting with calculations of the percentage impact by the newspaper.]

At the urging of mayor Jennifer Talley, the planned rate increases that Garner had outlined in her April 12 budget submission to the council were scaled back somewhat by the time the revised proposal was presented on Monday night, April 25.

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And a new category, or tier, was implemented which was intended to soften the price hikes on senior citizens, Talley explained. A new category for 1,000 gallons was created, as a result.

Talley elaborated that, on the one hand, the city has little option but to raise rates because of mandatory improvements that state and federal regulations are imposing on the city’s wastewater treatment plant.

At the same time, Talley acknowledged that the original rates proposed by Garner were “too big a jump” to impose all at once on residents.

Talley said that the original cost estimates for the wastewater treatment plant upgrades, between $30 million to $32 million, already represented the “largest project we’ve ever done.” But subsequent estimates over the past two years – which went up to $40 million, then $54 million, and now possibly approaching $70 million – have left the city strapped for how to finance the improvements.

Another reason for the escalating price tag, Talley said, is that “specialized contractors” typically do the work for these kinds of projects. Right now, they all have a “lot of work” and “there is a lot of demand for their services,” she said.

In fact, she noted the city received only two bids for the work on the wastewater treatment plant. Because that did not meet the state’s required minimum number of three bids, the two received were not opened.

A rebidding process has been instituted, Talley explained, and the city will be eligible to open the second round of bids, regardless of how many, or how few, contractors submit bids.
“There is no possibility of delaying” the improvements, Talley said. “We have to do it. We’ve got to find the money to do it,” she added.

Debt service on the loans for the plant upgrade will be at least $1.4 million in the first year, and possibly $2.3 million in the second and subsequent years.

While Talley acknowledged that the rate hikes were not going to be popular with residents, “We don’t really have a choice,” she said. “Our backs are against the wall.”

During their special Monday night council meeting, called specifically to deal with the water and sewer fund budget, council members voted unanimously for the revised budget and the new rate schedule.


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