The Ocracoke Sanitary District, which runs the water plant, has voted to increase water rates by 8 percent in January.
“We’re looking to the future and having to replace the water tower within five to eight years,” said Scott Bradley, president of the sanitary district board.
In addition to an eventual new water tower, the rate boost will cover increased operating expenses “to continue providing safe dependable drinking water on Ocracoke.”
Bradley said the district is announcing the new rates now so that people with rental cottages will have a longer lead time to adjust their rental rates for next year.
Effective with the January meter reading and billing, rates will increase as follows:
- The minimum rate for users under 5,000 gallons per month [Step A] will increase from $16 to $17. There are currently 883 meters in this category.
- The minimum rate for users over 5,000 but less than 10,000 gallons per month [Step B] will increase from $42.87 to $46.04. There are currently 293 meters in this category.
- The minimum rate for the highest usage of more than 10,000 gallons per month [Step C] will increase from $94.37 to $101.64. There are currently 70 meters in this category.
A copy of the rate schedule is available in the water plant office.
The last rate increase was 10 percent in January 2013. Rates are periodically adjusted by the board to reflect increasing operating costs, which include staff of six, electricity, insurance, and USDA bond payments for the $3.1 million plant expansion in 2010.
The other major consideration is planning for future capital improvements. The current 250,000-gallon water tower, built in 1976 when the water system was initiated, will need to be replaced at a projected cost of over $1.2M.
The district’s rate structures are designed using guidelines from the UNC School of Government Environmental Finance Center for “full cost recovery” to provide revenue stability to maintain, repair and operate the water system, pay principal and interest on USDA loans and build reserves for future capital improvements. Other key factors are maintaining affordability and encouraging conservation.
The district’s audits and finances are reviewed annually by the State and Local Government Finance Division and Local Government Commission within the North Carolina Department of State Treasurer.
Bradley said there are about 1,100 to 1,200 meters in use.
“When we expanded (several years ago), that added 500 impact units,” he said, and have only sold about 100 new ones.
To buy into the system at the entry-level starts at $5,000, he said.