Carroll County authority to advertise public hearing on staged water and sewer rate increases

Carroll County Public Service Authority members on May 19 voted to advertise a public hearing on proposed water and sewer rate increases after staff presented budget analyses showing significant shortfalls and rising operating costs.

The proposal would phase in increases over three years — beginning with a $4 increase to the minimum charge plus $1 per 1,000 gallons in year one, a similar second‑year adjustment and an additional minimum increase in year three — intended to generate roughly $715,000 in additional revenue over the three years, according to staff projections. "We're in a shortfall," Mike, a staff member who presented the budget, said as he walked members through revenue, expense and debt tables.

Why it matters: the authority is currently running deficits in both utility funds, and the gap affects required debt reserves and the ability to finance repairs. Staff told members the water fund is about $600,000 short and the sewer fund about $273,000 short on the proposed budget; restricted debt‑service reserves and recommended asset reserves also fall below required or recommended levels.

Staff presentation and findings Mike, a staff member, explained that the authority separated water and sewer accounting to show each system’s true costs and that recent bookkeeping changes moved some salaries between funds to reflect where employees work. He said the authority serves about 4,200 water customers and roughly 1,200 sewer customers and that the system added about 80 new customers recently. He flagged several cost pressures: electrical costs rose (examples cited include Pleasantview pump station, which runs heavily and can cost $8,000–$13,000 a month), material price increases (for example, an air‑release valve that cost about $2,000 several years ago now costs roughly $8,000) and increased pump‑and‑haul and maintenance needs.

Staff also described revenue hits: the loss of a large customer at Magnolia reduced processing revenue by about $400,000, and the town of Hillsville’s billing issue reduced revenue in the same area. A $250,000 state grant tied to lead‑and‑copper work paid professional services and was reflected in the accounts, staff said. Debt service totals shown to the authority included roughly $847,000 in near‑term payments and nearly $21 million in overall outstanding debt on the schedule shared with members.

Proposed rate structure and projected impact Staff presented a staged increase that would begin with a $4 increase to the minimum plus $1 per 1,000 gallons in year one, repeat in year two and add an additional per‑minimum increase in year three. Staff estimated those changes would generate about $310,000 in the first year from the initial adjustments and about $715,000 over three years under the current budget assumptions; staff also said the plan would still leave the authority with about $155,637 less cash than it holds today if no other budget changes occur. Mike estimated the typical residential customer would pay about $6 more per month in year one under the proposal, with cumulative monthly increases over three years discussed during the meeting.

Members asked about comparatives and customer mix. An attendee identified as a shop owner noted that the town of Hillsville bills bimonthly and that some municipal commercial rates are far higher; staff said residential and commercial rate parity had been set years earlier and could be revisited but that commercial counts are relatively small and changes would have limited budget impact. Staff said many meters on the system are low‑usage or nonusers who still count as customers and that the authority has previously used connection incentives to encourage taps.

Reserves and asset funding Staff walked members through required debt‑service reserves and recommended long‑lived asset reserves. They reported the authority was about $8,000 short of a roughly $771,000 required debt‑service reserve balance and that a reserve grouping tied to two projects (Cliff View and Fancy Gap) required about $441,000 while currently holding about $253,000 — approximately $188,000 short. Staff said recommended long‑lived asset funding would be near $1.2 million; current holdings are roughly $400,000, leaving about $767,000 to reach the recommendation.

Next steps and formal action After discussion, an authority member moved to advertise a public hearing on the proposed rate changes; another member seconded the motion. The authority called the roll and recorded affirmative votes from the members named during the roll call. The motion to advertise a public hearing passed. Following the vote members thanked staff for the work preparing the budget packet.

The authority did not adopt new rates at the meeting; the motion approved only advertising a public hearing so the public may comment before any final action.

Members and staff said they intend to monitor costs and repairs and reassess rates if conditions change before or after the public hearing.