Robbins Rate Hikes Needed to End Losses
Robbins called a communitywide meeting Tuesday night to explain why water and sewer rates will have to rise sharply -- and right away.
Town Manager Brant Sikes was joined by Jean Crews-Klein, a former Rural Center vice president now in consulting practice, to show concerned residents why a drastic rate increase is unavoidable and hear what they had to say about it. Rates could increase by 50 percent.
Seats filled the church hall at Robbins First Baptist Church for the special session of the Town Board.
Unlike drought-stricken towns, Robbins' problem is too much water. The town water and sewer systems are way over capacity. They were expanded to support industries that use a lot of water.
Hoping to keep a Perdue processing plant open, Robbins borrowed money to upgrade its waste water system. In less than a year, despite earlier assurances, Perdue closed the plant. That cost Robbins its biggest water/sewer customer. In one day, revenues dropped 65 percent.
For years, Robbins made up heavy enterprise fund losses from tax revenue -- hoping to attract some other water-using industry. None came. Now Robbins must make its water and sewer fund self-sustaining.
Sikes started by cutting costs. He reduced staffing. Remaining employees doubled-up on tasks. Sikes cut chemical costs for wastewater treatment, cut power usage, replaced old meters, then temporarily closed the town water treatment plant.
"We can buy water cheaper from Montgomery County than we can make it," he said. "My goal is to get grants to upgrade our own plant so we can reopen it. It has old, dilapidated equipment that is expensive to run. But first, we have to stop losing money."
Expenses dropped steeply, but not enough.
"Current revenues are not sufficient," Sikes said. "Losses have been depleting cash for years. From 2001 to 2006, the total decrease in Enterprise Fund cash on hand exceeded $1.59 million. The problem is loss of our consumer base. Robbins water/ sewer systems were designed to support water-based industry: textile mills, poultry processing. Our capacity is much greater than needed. We can produce 1.5 million gallons per day, but our current demand is .2 million gallons. Our water reservoir holds 120 million gallons, and we only use 200,000."
The cost of operation does not go down. Robbins still must operate the same amount of equipment and still has the cost of maintaining its infrastructure.
"At the current rate, all cash will be depleted before the enterprise fund becomes self-sufficient," Sikes said.
Risk of State Takeover
With that fund running at a loss, Robbins is at risk of having the state's Local Government Commission take over its water/sewer business.
If that happens, the state would set higher rates and institute other changes to make the system self-sustaining within one year. A new tax could be imposed on every property to which the town could supply water, whether it does or not.
"They simply do not have enough revenue to go forward," Crews-Klein said. "You heard Brant say a 30 to 50 percent increase. That sounds like an awful lot, but when I look at the consumption level of most people in this town, you all don't consume a lot of water."
The remedy Sikes proposed is to bring water and sewer rates up enough to pay what it costs to run the system. He put that figure at up to 50 percent more.
In-town water users currently paying a base rate $13 and $2.98 per thousand gallons up to 3,000 gallons would pay $17 base and $3.73 instead. Robbins uses an increasing scale where heavier water use costs more per gallon. It works out to about $12 to $15 per month for an average in-town user. Out-of-town customers, as in most towns, pay double.
Robbins finds itself in a nearly unique situation. To keep water clean, the town has to dump thousands of gallons every month. The old pipes are in a "tree" system, so many dead-end lines have stale water by the time anybody uses it. Over time, the town plans to loop its lines to prevent that, but the town has to be in the black to qualify for essential grants needed to do it. Until the fund stops losing money, Robbins won't qualify even to apply.
If the town changed to a price structure that would encourage more use (thereby increasing revenue and, at the same time, keeping water fresh) that change would lock it out of any grants.
"It is a new policy," Crews-Klein said. "The policy came from the drought. It's meant to help environmentally."
Increase Only Recourse
Robbins, with more water than it needs, could benefit from encouraging use -- but the town needs whatever grants it can find to rebuild its infrastructure. In the future, there will be a big need from the other end of the county, Sikes said.
"Robbins is the only town in Moore County that has lots of water," he said. "Towns to the south will need it, and will come to get it -- some day."
For now, the only recourse is to raise rates.
"I'd like to ask those here what they'd want to do," said Commissioner Frank Marley. "How many would just say, heck with it, let the state come in and take over? How about a show of hands?"
No hands were raised. When he asked how many would chose a rate increase, nearly every hand went up -- but many went up slowly.
Some residents spoke up to say how hard this would hit them.
"I get $400 a month Social Security," one elderly woman said. "The water is so bad, I have to buy water to drink, or else I might have to go on dialysis. Where will I find 18 more dollars a month?"
Sikes recognized her as somebody living on a dead-end line where water goes stale from slow use. He said the town was looking for some way to help its elderly on fixed incomes. Others complained water quality was poor, yet higher rates were proposed.
Changes in rates could come at the next board meeting May 8.
Reaction to the community-wide session has been positive.
"Town commissioners and Brant and his team at city hall did a great job presenting the facts in the meeting," wrote Joey Boswell in an e-mail. "I learned a lot, and I truly believe that the town of Robbins has our best interest in mind, and they should receive our support."
Contact John Chappell at 783-5841 or by e-mail at firstname.lastname@example.org.
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