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Fuquay Varina proposes 15% water and sewer hike to fund major utility projects
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Summary
Town Manager Adam Mitchell said utility rates would rise 15% in FY27 (with further scheduled increases) to support generational water and wastewater projects — including Terrible Creek expansion and the Sanford conveyance — and to meet bond-covenant metrics; the plan would raise the typical in-town household bill by about $21.10 per month at 5,000 gallons consumption.
Fuquay Varina’s utility enterprise fund is set for major investment: Town Manager Adam Mitchell told the town board the utility operating fund budget and rate model call for a 15% increase in water and sewer base and volumetric rates in fiscal year 2027 to fund capital projects, debt service and regulatory compliance.
Mitchell said enterprise operating revenues for FY27 are projected at about $40.6 million and that the rate-model recommendation (developed with consultant Stantec) includes higher increases in the early years and smaller ‘‘industry-norm’’ increases in outer years to smooth costs over time. “The combined monthly bill for an in town resident using 5,000 gallons per month, which is average, will increase $21.10 per month,” Mitchell said.
What the increases pay for: Mitchell tied the rate plan to a series of major utility projects under way or planned: the Terrible Creek wastewater treatment plant expansion (from 3 MGD to 6 MGD), Fuquay Varina’s share of the Sanford Water Treatment Plant expansion, the Sanford conveyance line (pending state permitting), and the Sunset Regional Pump Station project. He described these as generational investments required to secure long-term water supply, meet permit conditions and support growth.
Staffing and operations: The manager outlined several utility staffing additions driven by permit and operational needs — including operators for 24/7 Terrible Creek operations once expansion passes 5 MGD, in-house lab staff to handle increased sampling volume, and collection/distribution crew additions tied to network growth. Mitchell said the town’s utility asset base is substantial and must be maintained to avoid larger future costs.
Board reaction and explanation: Commissioners asked for simpler language to explain the increases to ratepayers; Mitchell said the primary drivers are committed capital projects, rising construction and operating costs, and the need to maintain bond-covenant metrics such as cash-on-hand and debt-service coverage. He noted that earlier supplemental agreements with suppliers have delayed some investments but those arrangements will expire and the town must invest to secure supply long-term.
Next steps: The manager said the rate model is updated annually and that rate and system-development-fee changes will be on the board’s upcoming agenda, with a system-development-fee public hearing scheduled for May 19. Adoption of the FY27 budget and associated fees is slated for the June 1 meeting.
(Attribution: Town Manager Adam Mitchell; presentation and Q&A excerpted from the FY27 utility fund presentation.)
