Water, sewer rates under review in Valdese as big projects loom

The water and sewer fees for the next fiscal year are now a Valdese Town Council homework assignment.

In the current 2024-25 fiscal year, the water and sewer customers outside town limits pay 1.5 times the amount the Valdese customer pays. The multiplier will be 2.0 in the upcoming year.

McGill Associates representative R.J. Mozeley presented a rate overview to the Valdese Town Council during Day 2 of the budget retreat. McGill is an engineering and consulting firm guiding the town with its utility fund budget process.

Fiscal year 2026 would require $1.4 million in additional revenue, which comes from the set rates for water/sewer customers. Raising the rates aligns with their 10-year capital improvement plan as well as combating inflation.

Council members did express concerns about raising the rates to a 2.0 multiplier since many have heard complaints about the previous increase.

In anticipation of objections, Interim Town Manager Bo Weichel built into the budget a 1.75 multiplier, which balances the budget. However, McGill’s recommendation would provide the town more revenue for needed capital improvement projects. High-ticket projects include replacing sewer lines on Rodoret North and South streets ($1.37 million) and purchasing electrical equipment for a water plant substation ($1.4 million). Funding those projects could involve taking out a loan, using fund balance, or using a combination of both. If the town used its fund balance, it would take its estimated balance of $5 million down to $3,058,132.

Council members asked whether they could raise their sewer rates, which are historically low.

Mozeley explained raising sewer rates is an option, but municipal sewer rates are typically low and balance out the higher water rates. Raising sewer rates would not result in a significant change unless the council decided on a more aggressive increase.

Valdese serves more than 5,400 retail and wholesale/contract customers — half of which are within city limits. Outside customers include Drexel, Rutherford College, and Burke County.

The proposed monthly rates would be the following:

• Inside Residential- $49.30 to $52.35
• Outside Residential- $58.60 to $78.50
• Inside Commercial- $53.05 to $56.30
• Outside Commercial- $105.65 to $112.60

The North Carolina average monthly rate is $68.78.

The self-supporting water and sewer fund — $9.67 million — is separate from the general fund and encompasses costs and fees of water and wastewater treatment, water distribution, and wastewater collection.

The council will revisit the discussion at the next pre-agenda meeting on Monday, April 28, at 6 p.m. at Town Hall.