Water system may raise rates

Fee increase would impact regional partners who buy water from Kerr Lake
Apr. 16, 2014 @ 06:06 PM

Henderson, Oxford and Warren County might soon be paying more for water.

The Kerr Lake Regional Water System, which sets the water rate for the three regional partners, could increase their rate by 5 percent for the next fiscal year to make up for the system’s decreasing sales.

The current water rate is $1,931 per million gallons.

Henderson, Oxford and Warren County purchase water from the regional water system. The increase would not apply to individual residents purchasing water without the respective municipalities or counties raising rates.

Since the recession in 2008, the total water sold increased only in fiscal year 2012.

At Kerr Lake Regional Water System Advisory Board’s Monday meeting, Henderson City Manager Ray Griffin said water sales for the system likely will continue to decline for the foreseeable future.

“Next year, we are projecting even lower sales based on the trend line that we are seeing,” Griffin said.

In fiscal year 2012, the regional water system sold 2,290,939 gallons. In fiscal year 2013, that number fell to about 2,227,802 gallons.

Griffin said the water sales in fiscal year 2014 are projected at about 2,168,318 million gallons and 2,140,579 million gallons in fiscal year 2015.

“What this does translate into is, of course, reduced revenues for the system,” he said.

Funding from water sales decreased sharply from 2008 to 2009 and continued to fall until 2011.

In fiscal year 2012, annual revenues from water sales were $4.39 million and then declined in 2013 to $4.29 million.

The mid-year projection for revenues in fiscal year 2014 is $4.21 million, and there is about $4.31 million budgeted for 2015.

Griffin said the revenues budgeted for 2015 would be even less if the 5 percent rate increase were not included.

Vance County’s water system, which purchases water from KLRWS, will not help offset decreasing sales because it is still a new system, Griffin said.

“They are still very much in what I call the start-up phase,” he said.

The water district in Vance County is divided into three parts: phase 1A, 2A and 2B.

The first phase covers Sandy Creek Township, where some residents are already receiving county water. The second phase, which is under construction, will reach Dabney, Williamsboro and Townsville townships in the northern part of the county.

“In their phase 1A, they are still in the process of getting people connected,” Griffin said. “I’m not really counting too much on that as any kind of large increase for next year because I just don’t know how to measure it yet.”


Contact the writer at smansur@hendersondispatch.com.