Staff proposes utility rate changes and internal fund‑balance targets for Central and Northern Nash districts

Public‑utility staff presented the FY26 Central Nash and Northern Nash water and sewer budgets and recommended a set of rate adjustments to cover a projected operating deficit and to help build internal reserves.

Mike Phillips said Central Nash faces a larger shortfall driven primarily by sewer costs and an increase in wholesale purchase rates from Rocky Mount and Nashville; his recommended package (staff option 2) would raise water base and usage rates and increase sewer base/usage rates so that a typical 5,000‑gallon household's water bill would rise about $4.20 and the sewer charge would rise about $14.50 under the proposal. Phillips said the Northern Nash water fund was in surplus but Northern Nash sewer showed a deficit; staff proposes a rate package that addresses both districts’ cash needs without cutting service.

Phillips also presented a proposed internal fund‑balance target for both utility districts modeled on peer practices: a target equal to six months of operating expenses plus one year of debt service. Using that model the target would be roughly $1.92 million for Central Nash and $635,000 for Northern Nash; current FY24 audit cash stands at about $1.28 million combined (about $240,000 of which is in Northern Nash). Staff recommended setting the target and working to reach it over a 3–5 year period while monitoring affordability and new capital obligations.

Commissioners asked about alternatives (holding base rates steady and raising usage rates) and effects on small water users and seniors; staff said they can run alternative scenarios and will return with detailed comparative models. No final rate ordinance was adopted at the work session; staff will return with final proposed rates for adoption during the formal May budget process.