(6/25) The Town Council voted to lower the upcoming planed water rate increase from 36% to 15%. The decision was the result of months of discussion, arguments and frustration by Commissioners and residents alike.

With a Water Fund that has been "in the red" for years, the hike in rates were initially started to "make up ground". After years of covering the Water Fund’s deficiencies with cash reserves, those now depleted funds are no longer available to cover the day-to-day operational costs, carry out necessary improvements, or fix failures in the water treatment & distribution systems. This practice is not recommended as the Fund should be covering its day-to-day needs with revenues from utility charges and other sources. Not having the cash reserves also prevents the Town from applying for and being awarded vital USDA loans that could fund improvements to the Town’s water system.

In 2023, the Town Council voted to increase rates by 36% every year for five years and then transfer to an annual increase of 3% thereafter. With 2024 being the first year for the rate hikes, Commissioners questioned the increase’s impact on residents that are already strapped for funds to cover their costs.

With the approval of the FY26 budget looming, Town Manager Cathy Willets gave the Council an overview of what could happen with a 0% increase and the already established 36%. The 0% increase would bring in roughly $840,000 in income from utility charges for the Water Fund. However, the Town's proposed expenses are $952,408, so the Town would begin the next Fiscal year $112,408 "in the hole", which it legally cannot do. If the Town continues with the 36% increase, then they should expect $1.1 million in revenue resulting in an excess of $434,000 in the black. Willets explained that these numbers would only cover the day-to-day operations and not any repairs such as line replacements, funding for other projects or provide an emergency fund.

With Mayor Frank Davis pushing for the Town to continue the 36% increase and other Commissioners worried about the burden on the residents, a compromise was needed.

In May, the Council discussed what the "magic number" would be. They needed one that kept the Water Fund in the black, allowed cash reserves to build back up for emergency situations and gave residents a break financially. Numbers ranged from 5% which was found not to generate a positive net income, 15% which allowed a 4.83% positive balance, 18% which increased the Fund into the black even more and the original 36% increase.

The Council eventually agreed that a 15% increase, instead of 36%, would give the Town’s Water Fund what it needed and give residents a break. After 2028 the rate will decrease (unless voted otherwise) again to either 3% or the Consumer Price Index, whichever is greater at the annual review. The CPI measures the day-to-day costs of goods and services purchased by households. The final vote was 4-1 with Commissioner Cliff Sweeney the dissenting vote. The rate decrease will take effect in July.