Mount Airy engineering analysis warns reserves are declining; council tables water and sewer rate ordinance to December

Town staff and the town engineer presented a 34‑slide capital improvement plan and rate analysis for the town’s water and sewer systems, finding that long‑term capital needs and flat revenue have reduced reserves and will require revenue increases to maintain infrastructure.

"What the citizens have to realize and and what the council is probably already aware of or soon will be is, you know, those reserves are starting to dry up," Mayor Michelle said after the engineering overview. Town Engineer Barney Quinn walked the council through the major capital categories — water stations, distribution mains (about 58 miles of pipeline), elevated storage tanks, sewer pump stations and the wastewater treatment plant — and produced multi‑year cost scenarios.

Quinn presented several key findings and figures discussed at the meeting: the town should target roughly $700,000 per year for water capital and $590,000 per year for sewer capital to meet projected replacement and overhaul schedules; total water and sewer expenses for FY26 were estimated in the presentation at about $4.242 million; the council’s reserve policy recommendation was to maintain one year’s budget of reserves (about $4.242 million). The presentation showed total water and sewer revenue operating and capital together has declined over the last decade (excluding one‑time ARPA funds) and that, under a no‑change scenario, a projected five‑year shortfall would be roughly $10 million.

Quinn offered example scenarios for multi‑year rate changes: a 10% annual rate increase over five years would still leave a multi‑million dollar shortfall, 15% would reduce but not eliminate the gap, and a 20% annual increase over five years would come closest to covering the forecasted needs. He also recommended considering a smaller automatic annual increase (e.g., 3%) for long‑term stability while the council reviews rate structure.

Council members exchanged detailed questions about equity and conservation effects of tiered rates, the burden placed on large commercial users (for example, the council discussed the high usage of a business identified as Lorian), and how to protect lower‑income residents and seniors. Several council members urged that the town route the plan through the Water & Sewer Commission for technical feedback and recommended soliciting outside expertise to validate rate scenarios and to design a fair tier structure.

After extended discussion the council voted to table Ordinance 2025‑19 (water and sewer rate adoption) to the December meeting to allow more work by staff and the Water & Sewer Commission and to produce an emergency or interim option for calendar/fiscal timing if needed. The council also reintroduced the ordinance (procedural step) to keep options open; no final rate‑adoption vote was taken.

Council members and staff agreed on next steps: provide the capital/rate presentation and supporting documents online, present the analysis to the Water & Sewer Commission (the commission meets Wednesday), return with alternative ordinance language or a short‑term triage measure (Council members suggested an 8% short‑term increase was politically discussed but not settled), and consider whether to hire or assign professional rate‑study assistance.