CONYERS -- Rockdale Water Resources will need to increase water and sewer rates -- sooner rather than later -- in order to keep up with operating costs and maintain the system.
That was the message delivered to the Board of Commissioners at a work session Tuesday night by Lex Warmath, a vice president with Raftelis Financial Consultants Inc. of Charlotte, N.C.
The Raftelis water and sewer rate study, which was begun in 2011, showed that RWR's current rates will not generate enough revenue in 2013 to reinvest in the system to maintain current service levels, avoid depleting reserves, and meet 2014 debt service requirements. In addition, the current rate structure does not encourage water conservation, and sewer rate increases are needed.
"We ... want to recognize that right now water rates are subsidizing the sewer side a little bit, and we need to correct that," said Warmath.
Moreover, Warmath said the county needs to demonstrate to lenders that it is willing to increase rates to cover debt service and maintain reserves in order to preserve a good bond rating.
Raftelis recommended RWR adjust water rates by increasing the number of rate tiers from three to four and reducing the usage cut-offs between tiers. These changes would increase revenues while encouraging water conservation, according to the study. In addition, the study recommended increasing water rates for non-residential customers and increasing sewer rates by 15 percent per year for three years as an initial step toward making the sewer system self-supporting.
Without changes to the rate structure, "Starting in fiscal 2013, revenues are not keeping up with revenue requirements," said Warmath. "It becomes even more of a problem starting in 2014 because not only are we not covering all of our capital needs, but we are not covering our debt service."
For the purposes of the study, Warmath said Raftelis assumed usage would remain flat.
"Some (revenues) will come from growth," he said, "but growth is way down and many utilities are finding usage declining."
Warmath said that under the recommended changes, an average residential water customer using 6,000 gallons per month would see a rate increase of 5.8 percent in 2013, or $1.95 on a $33.65 bill. An average monthly sewer charge would increase 9.5 percent, from $39.23 per month to $42.95.
Warmath noted that RWR customers have not had a rate increase in several years.
"Given your history of not having raised rates, this is not too bad of a picture," he said.
Commission Chairman Richard Oden stressed that Tuesday's presentation was for informational purposes only. He said representatives from the Rockdale Water and Sewerage Authority would be conducting a series of community information sessions after the new year to discuss possible rate changes with water system customers.
Oden acknowledged that there is never a good time for a rate increase.
"You've got to put the facts on the table ... " Oden said. "If we are going to have economic growth, we have to meet these issues head on."