Local News

Raleigh council delays vote on water rate hike

Posted April 21, 2009 11:58 a.m. EDT
Updated April 21, 2009 8:01 p.m. EDT

— The Raleigh City Council on Tuesday decided to delay a vote on a proposal to raise water rates by as much as 17 percent.

The proposed increase is a result of the city selling less water and making less money during last year's record-breaking drought when it urged customers to conserve water.

The council will discuss the matter further at a work session scheduled for Monday after Mayor Charles Meeker asked for only an 8.5 percent hike until December.

City Manager Russell Allen said delaying the full rate would be risky.

"This will introduce a lot of unknowns and a lot of current-year and future-year unknowns to our AAA (bond) credit (rating), and I have to be able to say that very pointedly to you," Allen said.

Members could also vote on the measure next week. The city staff wants to have a new rate in place by May 1.

If approved, the original proposal, which also includes raising connection fees paid by developers, would mean an increase of about $5 a month to the average residential water bill.

This drought, along with a slowdown in local development and an internal accounting error, created a $13 million deficit in the city's Public Utilities Department budget.

Supporters of the proposed increase have said an increase will help close the gap until a new system can be put in place.

The rate increase is separate from Raleigh's plan to implement tiered water rates that would charge a higher rate to customers who use more water.

The tiered rates are scheduled to go into effect in December, but Public Utilities Director Dale Crisp has said that they might have to be delayed until July 2010 if the department continues to run at a deficit.

Conservation would eliminate the added revenue from the higher rates, and the city would end up spending more sending out monthly bills instead of billing every other month, Crisp said.