Rates likely headed higher

pseligson@newsobserver.comJune 23, 2014 

Amid financial troubles that have drawn a warning letter from the state, the Micro Board of Commissioners might raise water and sewer rates substantially this year.

In a May letter, the N.C. Local Government Commission expressed concern that Micro’s water and sewer department was spending more money than it was taking in. In 2012-13, the deficit was about $50,000; a figure for this year is not yet available.

The Local Government Commission called on town leaders to raise rates to make the water and sewer fund solvent. The agency noted that Micro cannot apply for state dollars to replace its aging infrastructure until the department stops losing money.

Commissioner Donnie Holland said the board had no choice but to raise rates. “We’ve cut everything to the bare minimum that we can cut, and we were still looking at shortages,” he said.

In Micro, residential, commercial and industrial customers pay $23.35 for the first 2,000 gallons of water, $3 for each additional 1,000 gallons up to 5,000 and $2 per 1,000 gallons after 5,000. Under a proposal, residential customers would continue to pay those rates, while commercial and industrial customers would pay 25 percent more.

Micro’s sewer customers pay a base fee of $14.35 and then $7.61 per 1,000 gallons. Under the proposal, residential customers would pay 15 percent more, while commercial and industrial would see their rate rise 25 percent.

“We have been told for years our rates are too cheap,” said Commissioner Johnny Dixon, who is also the town’s public utilities director.

At a public hearing earlier this month, Micro resident Russell Creech said the increases would be bad for consumers – and for the town’s efforts to attract jobs. “I ain’t saying not raise the rates,” he said. “I’m saying not so drastic.”

Commissioners said their proposed rate increases would generate an additional $35,000 in the water and sewer fund. But the board would likely need to raise rates again next year to end the deficits and open Micro to state dollars needed to replace infrastructure that has been in the ground since the 1960s.

About 15 residents attended the public hearing. They came mostly to oppose the rate increases, but they had other concerns, wondering, for example, why a town with just two employees pays $2,500 a month for health insurance.

Micro pays 100 percent of the cost of insuring two employees and two dependents, a total of four people. Residents at the public hearing asked whether that was standard practice among North Carolina towns.

Scott Mooneyham of the N.C. League of Municipalities said it was common for towns to pay 100 percent of the cost of insuring employees. It is rare, he said, for towns to pick up the full cost of insuring spouses and dependents.

“Historically, government at all levels has provided good benefits,” Mooneyham said. “Often that’s to make up for the fact that they have not always been able to match salary levels in the private sector.”

Townspeople also questioned how Dixon could be both a town commissioner and an employee. Commissioners said Dixon recuses himself from any votes that could affect his pay. Mooneyham said state law allows this practice in towns with fewer than 5,000 people.

The next budget meeting is at 7 p.m. Thursday at town hall.

Seligson: 919-836-5768

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