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Black Mountain faces roughly $900,000 water-fund shortfall; council considers rate hikes and staffing cuts
Summary
Councilors and staff told the town’s budget hearing that water sales are running roughly $300,000–$400,000 below the current budget and wholesale increases from Asheville are amplifying the gap, leaving a projected ~$900,000 shortfall that will likely require some combination of rate increases, use of fund balance, or staffing reductions.
Councilors and town staff told a budget hearing that the water fund is facing a large shortfall driven by weaker-than-expected water sales and rising wholesale costs.
At the hearing, staff said the current fiscal year budgeted water sales at $2.4 million but now expect about $2.1 million, a shortfall of roughly $300,000–$400,000. In addition, the town budgeted a $265,000 draw from fund balance this year that is proposed at zero for next year; when combined with other adjustments staff estimated the town could be roughly $900,000 short of balancing the water fund for the coming budget year.
The council noted Asheville’s wholesale charges have been increasing—cited as about a 32–33% rise over two years—which feeds directly into the town’s cost of purchased water. One member said the combination of lower local sales and higher wholesale prices means the town will likely need to raise local rates or find additional cuts.
Staff recommended several near-term follow-ups: locate and share the town’s contract with Asheville to check renewal timing and fees; analyze per-gallon production cost versus wholesale purchase cost; and re-check system-development-fee collections (staff reported $134,652 collected so far this year) that are normally moved to a capital reserve at year-end.
The mayor and councilors discussed options to reduce payroll costs and to bring forward a menu of proposed cuts and revenue changes at an upcoming agenda workshop. One councilor emphasized the structural nature of the shortfall, calling it more than a one-time event and urging the group to consider enduring changes.
The council left the hearing with a request to staff to compile the requested financial details and to return with rate and fee scenarios and potential personnel-savings proposals at the follow-up meeting.
