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UNC study finds Mayodan faces roughly $840,000 gap; recommends increasing-block water and sewer rates
Summary
A rate study presented to the Mayodan Town Council estimated about $840,000 in funding gaps for planned CIP work and recommended consolidating customer classes and an increasing‑block rate model; average residential bills would rise modestly (about $5 combined) with likely annual increases of 3–7%.
The UNC School of Government Environmental Finance Center presented a water and sewer rate study to the Mayodan Town Council on April 13 that identified a projected funding gap of roughly $840,000 if planned capital improvements proceed.
Hope Thomson, representing the Center, told council members that while Mayodan’s financial position is relatively strong, current rates are insufficient to cover future capital needs. The analysis noted that bulk water sales to Madison and Stoneville bring in approximately $650,000 annually but do not eliminate the projected gap. The study recommended simplifying the town’s rate structure by consolidating customer classes and adopting an increasing‑block rate model that would preserve existing base rates for typical usage while charging higher tiers for larger users to encourage conservation and generate revenue.
Under the proposed approach, the average residential customer would see a modest increase—about $5 combined for water and sewer at typical usage levels. The study also indicated that modest annual increases of 3–7% may still be required to keep pace with costs, and that current rate levels could affect eligibility for some state grant or principal‑forgiveness programs.
Next steps presented to Council include refining the financial model, examining scenarios with and without the CIP, and returning final recommendations to the council to support full‑cost recovery and long‑term utility sustainability.
