NEW MARKET – After three work sessions, the Town Council is ready to advertise its budget for the coming year that will include at 68 percent increase in the minimum water bill.
Town Manager Todd Walters said that for years New Market has failed to adequately raise its water rate to allow for rates to cover the town’s costs on water. It has relied, he said, on large-volume water users such as the New Market Poultry LLC and have let smaller users fly under the radar.
Because rates have remained so low, water rates have not paid for themselves and this year, Walters said, the town will have a deficit of about $381,000.
“Right now, our rate for a minimum bill is $10.39,” Walters said. “To get us where we need to be in the upcoming year, just so that we’re paying for our system, we’re talking about our minimum bill jumping to $17.50.”
New Market’s minimum rate establishes the amount residents pay for their water use up to 1,700 gallons Walters said. With the current rate, water costs $4.58 for every thousand gallons over the minimum. The new rate would establish a cost of $7.20 per thousand gallons over the minimum.
Right now, a home using 3,000 gallons of water a month — roughly two to three people —is paying $68.49, Walters said; with the new rate, their bill is going to increase to $80.57.
Walters said he didn’t realize how bleak the water situation was until he started digging into past rates as he prepared to apply for funding for a new water tower. This rate increase, he said, is not to pay for that tower. Before the town can apply for any funding, it has to show it is capable of raising enough revenue to pay back its loans out of its enterprise fund.
“This rate [increase] does not take into account the water tower,” Walters said. “Right now, we aren’t showing us making any sort of payment toward the water tower in the next fiscal year.”
Council members blanched at the figures Walters shared during Tuesday’s meeting.
Councilman Daryl Watkins said the deficit was “outrageous.”
The large deficit was left by more than just slowly increasing water rates, Walters said. For years, the town relied on large bills from the poultry plant. When the plant put new practices in place to help preserve water, the town’s bottom line was affected, Walters said.
The last time rates went up significantly was when the town increased sewer rates to accommodate servicing the Town of Broadway. Since then, water and sewer rates have increased at about 2 percent per year to keep up with inflation.
Councilman Peter Hughes said this large increase is forcing the town to dive into its water usage figures to determine some baseline facts such as the average usage for different sized households.
“It seems what we have is a period of time where we didn’t realize how much we had fallen behind in keeping up with this stuff,” Hughes said. “We’re going to have to catch up to speed.”
Councilman Tim Palmer said increasing the town’s rates is going to bring New Market in line with the rest of the county.
Walters said comparing rates from town to town is tricky. There aren’t any real standard rates for what the minimum bill should be or how many gallons the minimum should be, he said. Despite complaints that New Market’s rates are high, Walters said he doesn’t think that’s the case.
Wrapped up in the “water bill,” Walters said, are sewer and garbage costs.
“It’s a utility bill,” Walters said. “Everybody calls it a water bill, including me, but there’s other costs on that bill.”
Council members recognized their resolution to raise rates at such a sharp rate are bound to invite blowback from citizens.
In order to soften the blow for out-of-town water users, council members are proposing to reduce the out-of-town multiplier from 1.75 to 1.5.
Hughes said he was uncomfortable putting such a heavy burden on out-of-town customers and reducing the multiplier would show the town was acting in good faith and keeping them in mind.
In addition to an increased water rate, the town has proposed increasing the meals tax from 5 percent to 6 percent and the cigarette tax from 20 cents a pack to 25 cents a pack.
Council members approved the proposed budget with a unanimous vote and will hold a public hearing on May 13.