Raleigh Water outlines $391M FY27 budget, $2.4B CIP and modest rate increases

Whit Wheeler, director for Raleigh Water, presented the department—Y27 budget at the pre-budget session, describing recent operational successes, a large capital program and a modest across-the-board rate proposal.

Wheeler highlighted accomplishments including continuous awards for the EM Johnson and Dempsey Benton treatment plants; a bioenergy and solids-reduction project now producing renewable natural gas used by more than 70 GoRaleigh buses; and a reduction in biosolids truckloads from about 75 per week to 25 per week. He said the department also sold $1.27 million in renewable-energy credits from an online auction.

Budget and CIP: Wheeler proposed a $391 million FY27 budget (48% operations, 21% debt service, 31% PAYGO) and outlined a 10-year capital improvement program near $2.4 billion focused on pipe replacement (38%), water treatment plant improvements (30%), wastewater/pumping station work (20%) and other upgrades (12%). Major near-term projects include a multi-year expansion at the M. Johnson Water Treatment Plant (from 86 million gallons per day to 120 MGD) and upgrades at smaller resource-recovery facilities.

Rate proposal: the proposed rate model increases the typical residential base charge by about $0.28 and adjusts consumption tiers by modest cents, producing roughly a 3.5% overall increase and about a 3.1% increase for the median residential customer. Wheeler said the model assumes modest account growth and continued compliance with financial covenants.

Customer assistance and capacity: Wheeler said the department ssisted over 3,300 customers last year through the customer assistance program (about $659,531 spent). Council members asked whether regional wastewater capacity constraints threaten growth; Wheeler said master planning, targeted capital projects and developer partnerships are the tools to manage capacity and that the system is currently in good shape. He noted the city sells water to neighboring jurisdictions under short-term contracts (bringing in roughly $4 million last year).

Long-term projects and drought planning: Wheeler said the Little River Reserve project is under study, with preliminary estimates in the order of $1 billion and more refined analysis expected in about six months. He described the city's water-shortage response plan and said Falls Lake storage is above about 80%, adding that drought triggers are being reviewed to reflect increased storage capacity.

Next steps: staff asked council to authorize programming of the rate change in billing systems and to notify large customers; final rate approval will occur as part of the FY27 budget adoption process.