Utility: Cover debt, restore repair crews


by Frank DeLoache


As they restructure rates to make Charlotte-Mecklenburg Utilities less vulnerable to the whims of drought and water use, utility officials and City Manager Curt Walton are asking for a rate increase that will increase most customers’ bills by more than 8 percent beginning July 1.



Of the utility’s customers, 75 percent use 8 cubic feet of water – 1 cubic foot equals 748 gallons – or less a month, and the customer who uses exactly 8 cubic feet will see his or her water-sewer bill increase by $4.59 a month – from $51.64 to $56.23. That’s an 8.88 percent increase.



High-volume residential customers, including many in south Charlotte and north Mecklenburg who water their lawns, might expect to use 16 cubic feet of water monthly. That kind of bill will see an increase of $8.99 – from $107.64 currently to $116.63. That’s an 8.35 percent jump.



As part of Walton’s budget presentation to the Charlotte City Council this week, utility Executive Director Barry Gullet said this year’s budget reflects the position of the utility caught “in transition from a high-growth community to a low-growth community.” Though Gullet’s staff has trimmed back plans for big-budget capital projects, some projects that the utility approved or started before the recession are just showing up as debt payments the utility – and its customers – must make.



The utility’s debt load – which includes payments on loans as well as the cost of projects paid with cash – represents 62 percent of its entire budget. That percentage should come down in time, but not yet, Gullet said.



At the same time, Gullet is asking the City Council to give him enough money to add about eight more repair crews.



To manage revenues, losses and cutbacks during the recession, the utility cut its staff. The utility has fewer employees now than in 2001-02, although its customer accounts have grown from slightly more than 350,000 to about 475,000 in that same time period, Gullet showed in graphs to City Council members.



The utility has cut its repair crews from 31 to 13, and that’s translated to much longer delays on “minor leak repairs.” The average response time has increased from less than 5 days in 2008-09 to about 23 days in the current fiscal year.



One recent national report said that water/sewer rates are going up 9.4 percent nationwide. According to information utility officials have gathered from comparable cities in North Carolina and other states, Charlotte-Mecklenburg Utilities, even with the proposed rate increase, would charge less than most for 10 cubic feet of water. Those comparisons show Atlanta charging by far the most, then Chapel Hill; Birmingham, Ala.; Concord; Cary; and Austin, Texas. In the comparison offered, only Tampa, Fla., and San Antonio, Texas, customers pay less than Charlotte residents, and rates for the other cities don’t reflect if officials there are seeking rate increases also.



In changing the utility’s rate structure, officials have kept the four-tier rate system. Only customers using the least amount of water – no more than 4 cubic feet of water monthly – will see a rate reduction – from $1.45 to 98 cents per cubic foot.



At the same time, all customers would pay new “availability fees” for water and sewer service. Based on meter size, the typical residential customer will pay $2.25 for water, and $4.30 for sewer. The fees are designed to cover 20 percent of the utility’s debt service and reduce the agency’s dependence on people using more water.



The other proposed rate changes are:



• Tier 2, customers using 5 to 8 cubic feet of water monthly: Rate increases from $1.64 to $1.96 per cubic foot.



• Tier 3: customers using 9 to 16 cubic feet: Rate increases from $2.69 to $3.41.



• Tier 4: customers using more than 16 cubic feet: Rate stays the same at $5.32 per cubic foot.



At the same time, the new structure reduces the maximum that high-volume customers pay for sewer service, Gullet said. Currently, those customers are paying sewer charges for water they use irrigating lawns or washing cars, which doesn’t go into the sewer system. The maximum sewer charge is dropping from $4.31 to $4.14 per cubic foot of water.



Even if the city council rejected the utility’s rate increase request, utility customers would see changes in their bills in July. The utility has revamped the entire presentation of the bills, so customers can see in detail what they are charged for. The new bill also asks customers to make sure the utility has up-to-date contact information for them.



And utility officials have eliminated one item that irritated many customers who disputed “spike” or one-time-high-use bills. Currently, even though the utility has suspended payment on the disputed portion of the bill, the paper notice sent to the customer says he or she is “delinquent.”



That has been eliminated, Gullet said.