Rocky Mount staff outline proposed utility rate increases for environmental services, water, sewer and stormwater

City staff told the Rocky Mount City Council Committee of the Whole on March 30 that rising costs across utilities — disposal contracts, fuel surcharges, treatment chemicals and higher interest on financed projects — are driving proposed rate increases they expect to include in the fiscal year 2026 budget.

The presentation, led by Ken Varney and Peter Vaughn, forecasted adjustments across environmental services, water, sewer and stormwater to maintain operations and fund capital improvements. Varney said the city is proposing to raise the residential solid-waste rate by $1.25 a month and the recycling rate by $0.50 a month, a combined increase of $1.75 for most residential customers. He attributed part of the recycling cost rise to the national decline in exports of recyclable plastics.

“The recycling industry is not the way it was 10, 20 years ago,” Varney said, noting the city is paying to dispose of recyclables and, in some cases, paying a higher per-ton rate for recyclables than for solid waste.

On stormwater, staff noted the last rate change was in 2014. The city is proposing to move the stormwater fee from $5 per equivalent residential unit (ERU) to $6, which staff said would raise most residential customers’ bills by $1 per month starting July 1 if adopted. Varney said stormwater work is planned in phases by drainage basin and that larger projects could rely on grant funding or revenue bonds.

Water and sewer adjustments are proceeding from a cost-of-service study the city presented in 2022, Varney said. The four-year model includes annual adjustments; staff said the model calls for roughly a 77.5% increase over the model period for water rates. Varney said, under the model, the typical residential customer using four units (about 3,000 gallons) would see an increase of about $1.35 a month for water. On sewer, staff said the study recommended an approximately 8% increase; staff are still evaluating the numbers and said a sewer change “could be up to maybe even a 10% rate adjustment.” Staff estimated the average residential sewer customer would pay about $2.75 more per month under the current recommendation.

Council members asked about commercial-rate structure and equity between single-family and multi‑family customers. One council member raised concerns that commercial accounts may be underpriced relative to actual tonnage and that residential customers could be subsidizing commercial service; Varney said the city’s cost-of-service analysis will examine that allocation and commercial rates would be revised to reflect actual costs if warranted.

Staff said they will bring refined cost-of-service analysis and budget recommendations during FY2026 preparation. The presentation noted the city will continue reviewing front-loader operations, transfer-station tonnage tiers and options to better align rates with service costs.

For neighborhoods reporting frequent flooding, including Battleboro, staff said the capital improvement plan (CIP) includes basin-by-basin planning and phased work; larger basin projects will be higher-cost and staff said they will pursue grant funding and revenue models to address them. Varney cited an approved and funded project at Parker’s Canal and said some work completed as a phase 1 last fall will continue into spring.

The committee did not take a final retail-rate vote in the session; staff emphasized wholesale power and other wholesale charges drive much of the pressure and that only the council can authorize retail rate changes.