After years of staff shortages and flat operating budgets and millions worth of needed upgrades, Charlotte-Mecklenburg Utilities Director Barry Gullet said the system must have more money next year, which likely means a rate increase for its 250,000 customers later this year.
In a March 23 presentation to Charlotte City Council, Gullet did not suggest what size rate increase he will ask for, but he might provide more specifics at a City Council budget retreat May 9 at 4 p.m. at the Charlotte Mecklenburg Government Center, East 3rd St. and South Davidson St. The retreat is open to the public.
During his March presentation, Gullet drove home two major points:
• Operating a flat budget since 2008, the utility has frozen 87 positions and cut the number of repair crews from 31 to 13. The result is a delay in service to customers, so the current response time to repair water leaks is now more than two months.
The backlog of water leak cases reached 500 at one point and remains at 350, Gullet said.
“Crews are weary and frustrated,” he noted.
At the same time, chemical and power costs have increased and standard maintenance has been delayed. Gullet called the current spending level “unsustainable,” and he’s asking for $7.6 million more for operating next year.
• 85 percent of the utility’s water and sewer system was built in the past 30 years. Though the system is making the transition from “high growth” to a “stable environment,” the utility is still paying on the loans for all that growth and needs to make improvements to many of the facilities built in the past three decades.
With the recession, growth has slowed significantly, and utility officials delayed a bond sale scheduled for August to November 2012 and cut the size of it from $200 million to $80 million. But in the five years from 2012 to 2016, officials project the utility will have to spend a combined $483 million on 57 water system projects and 64 sewer projects.
The utility needs an addition $18 million for capital projects next year, Gullet said.
Without selling bonds for capital projects, the utility risks exceeding the capacity of its treatment plants, which could bring fines or growth moratoriums. At the same time, the utility might run into “reliability issues,” which could mean violating operating permits, “environmental impacts” and more fines or moratoriums.